The Basic Law governing the use of trusts in the British Virgin Islands is declaration of 1705, as well as a number of other laws and rules that lead a law on trusts to modern understanding.
Classic trust in the British Virgin Islands has the following characteristics:
Assets transferred to the trustee are not the property of the trustee;
Trustee has rights to the assets;
Manager has rights and obligations, which allows him to manage the assets according to the trust agreement and the law on trusts.
The manager is required to make such trust management policy to achieve maximum benefit for beneficiaries up to the sale of assets.
In contrast to the trustee, the beneficial owner is entitled to the income and, if a trust is opened for a certain period of time, beneficiaries get the right to the assets after closing of the trust. Beneficiaries are not entitled to intervene in the asset management process.
To avoid the wrong, the immediate actions of the trustee (for example, sales of assets), founder may appoint a protector, or expand his rights. It may include:
Appoint and change the operational jurisdiction of the trust;
Dismiss and appoint new officers;
Cancel and add beneficiaries;
Disagree with actions of the manager.
When you are confirming the rights it is important to strike a balance, in accordance with certain conditions, in some cases if the rights of the protector prevail, a trust may be found to be false.
Since 2007, the BVI hava the option to create a private trust company (PTC), which have received the right to manage the trust (or trusts belonging to the same family) without the need to license their activities. To do this, the company must comply with certain conditions, the implementation of which examines the local licensed agent.
Such companies allow family member to control trust (as the Director of the PTC). Also, often in order to maintain the shares of the PTC, the shares are transferred to a specially created trust, such as VISTA (with limited capabilities of manager).
Thus BVI trust law is very flexible and provides an excellent opportunity to maintain and protect the property of founders.