BVI TRUSTS IN 2026: NEW REPORTING RULES FOR TRUSTEES

For years, setting up BVI trusts worked like this: You’d sign a deed, and a trustee would hold your shares. The British Virgins Islands had no general public trust register. On paper, BVI still has no trust register. In practice, however, that does not mean there is nothing to report. Other reporting obligations may still apply.

On 10 December 2024, a new rule took effect. Now, every trustee of a BVI trust must collect, verify and keep information about the people behind the trust. This includes the person who set up the trust, anyone who can benefit from it, and anyone who controls it. However, the trustee does not file this information with a registry. Instead, they must keep it up to date and provide it to the relevant authority when asked. A trustee who ignores this faces a fine of up to $75,000.

Three weeks later, on 2 January 2025, a second rule started. Any BVI company sitting under that trust must file its own beneficial ownership details with the Registry, although exemptions may still apply. Who has to file, and how much they file, depends on who holds its shares as trustee and whether the legal conditions are met. That choice matters because it affects the company’s reporting duties. This shall be explained in Chapter VIII.

This guide explains how BVI trusts work, who is responsible for what, and how VISTA trusts work in practice. It also covers what creditors can reach, what your home country may still tax, and the fines the BVI regulator has imposed on trustees.

I. WHAT A BVI TRUST IS AND HOW IT WORKS

A company and a trust serve different purposes. One one hand, a company owns assets in its own name and has shares. If you hold those shares, you own the company, and your name appears in its ownership records.

On the other hand, a trust works differently. It is not a legal person and does not own assets in its own name. When you create a BVI trust, you transfer legal title to the assets to a trustee. The trustee’s name then appears on the share register, bank mandate or title deed. As such, you no longer hold legal title to those assets. Instead, the beneficiaries receive rights under the trust, such as the right to benefit from the trust or, depending on its terms, to receive distributions.

That split is the whole point. One person holds legal title, while another has the benefit of the assets. Because you no longer hold legal title, the assets do not normally pass through your estate when you die. Additionally, a personal claim against you also does not automatically give the claimant a right to the trust assets.

The Trade-Off: You Keep Some Powers, Not Full Control

You give up direct control over the trust assets. However, BVI law does allow the trust deed to reserve certain powers to the settlor or another person. Chapter IV explains which powers can be retained. But the fact remains: the trustee decides, and you do not. Nevertheless, the trustee must still act within the powers and duties set by the trust deed and applicable law.

Registration, Duty and Privacy

The BVI keeps no public register of trusts. In fact, your trust deed remains a private document. According to Harneys, trust duty of US$200 is payable on the deed that establishes a BVI trust, paid by affixing a stamp.

However, privacy at the trust level does not mean privacy everywhere. The trustee holds a record of who you are, and since December 2024 the law requires it. The company underneath files its own details. Your bank may also report information under the Common Reporting Standard, depending on your account and tax status. Chapters VIII and IX deal with each of these.

II. WHO DOES WHAT INSIDE A BVI TRUST

Three roles are central to an ordinary trust: the settlor, trustee and beneficiary. Depending on the structure, you may also have a protector or an enforcer. Each role carries different powers, duties and reporting implications.

Who Holds the Trustee Accountable?

Imagine you set up a trust to hold shares in a private trust company. The trust has a specific purpose, but no beneficiaries who can hold the trustee to account in the usual way. So who steps in if the trustee fails to follow that purpose?

The enforcer. Under BVI law, a non-charitable purpose trust must have an enforcer whose role is to enforce its purpose. The enforcer is not just a name in the trust deed: the role carries legal duties and powers. The trustee and enforcer must also be different people.

But here’s the detail worth thinking about when drafting the deed: what happens if your enforcer resigns or can no longer act? Without a workable replacement process, a role designed to keep the trust on track can become a source of delay and uncertainty.

BVI Purpose Trusts: Designated Trustees and Enforcers

The BVI lets you create a trust with no beneficiaries at all. In fact, sections 84 and 84A of the Trustee Act allow a non-charitable purpose trust, which exists to carry out a stated purpose rather than to benefit a person. Section 84 covers trusts made before 1 March 2004. Section 84A covers everything after.

These trusts carry two requirements that a normal BVI trust does not.

First, at least one trustee must be a designated person. This can be a BVI lawyer, a qualifying BVI accountant, a licensed trust company, or a BVI private trust company. The trust must always have at least one designated person acting as trustee. If that person stops acting, a replacement must be appointed. If no replacement is appointed, the court can step in.

Second, there must be an enforcer, who holds both the power and the duty to enforce the trust. Their job is to make sure the trustee follows the trust’s purpose. The same person cannot be both the trustee and the enforcer at the same time. If the position becomes vacant, the law sets out a process for appointing a replacement, which can involve the Attorney General and the court.

III. VISTA TRUSTS: THE REASON FOUNDERS PICK BVI

Here is the problem VISTA solves. You built a business, you put the shares into a trust, and your trustee holds those shares. Now, a trustee has a duty to look after the value of what it holds. So the trustee starts asking questions: Why is the company carrying that much debt? Why has it not paid a dividend in four years? Should those directors still be in post?

Under ordinary trust law the trustee is right to ask. If the company loses value and the trustee did nothing, the beneficiaries could sue the trustee. So professional trustees interfere, because not interfering is how they get sued.

The Virgin Islands Special Trusts Act 2003, known as VISTA, switches that duty off. It is a separate statute from the Trustee Act, and it applies only when you direct that it should.

What the Act Actually Says

The wording matters here, so it is worth reading the operative parts of the Act itself, published by the BVI Financial Services Commission.

Section 5(1) says the designated shares are held “on trust to retain them”. Section 5(2) then says that duty to retain “shall have precedence over any duty to preserve or enhance the value of the trust fund.

Here’s the part worth paying attention to: even if the shares lose value, the trustee’s duty to keep holding them takes priority over the duty to protect the trust fund’s value.

Section 6(2) says trustee powers must not be exercised “so as to interfere in the management or conduct of any business of the company”. Then, section 6(3) goes further: the trustee must take no steps to instigate or support action against the directors, and no steps to procure their appointment or removal.

In addition, section 7 lets you write office of director rules into the trust deed. In other words, it lets you decide who gets a seat at the table when it comes to running the company. Through the trust deed, you can require a named person to serve as a director, set when directors must be appointed or removed, and decide how many directors the company must have. You can also give a named person or committee a say in these decisions by requiring the trustee to follow their directions.

Case Study: What Happens if a BVI Company’s Sole Director Dies?

You own a BVI company. You are its sole director, and your children are meant to benefit from the shares held in trust. Then you die unexpectedly. The trustee still holds the shares, but who appoints the next director? And what happens if the family cannot agree on who should take over?

VISTA lets you address that problem before it happens. Under section 7 of the Virgin Islands Special Trusts Act 2003, the trust deed can set rules for appointing and removing directors. For example, it can require a named person to take office or give a named person or committee a role in those decisions.

That way, you can plan who takes the reins instead of leaving the question unanswered until a crisis hits. The rules must still work with the company’s articles and applicable BVI company law. A VISTA trust does not, by itself, guarantee that a replacement director can be appointed without difficulty.

When Does a VISTA Trust Make Sense?

What happens to your business and your family if you die or can no longer make decisions for yourself? It is not an easy question, but it is one worth planning for.

Conyers describes a case involving a parent with a disabled child. The parent wanted to make sure the child would be cared for if the parent died or lost the ability to make decisions. The VISTA trust was designed to keep control in the parent’s hands during their lifetime, while allowing the arrangements to change if either event occurred. The trustee could then take a more active role in managing the investments to provide for the child.

The lesson is simple: plan for what happens when you can no longer take care of things yourself. A VISTA trust can help you set out in advance how the shares should be held and how the arrangements should work if your circumstances change.

Why Your VISTA Trust Deed Matters: The Limits on Trustee Power

However, VISTA does not give the trustee unlimited power to act. The trust deed must set out how the arrangement should work, including who can serve as a director and when the trustee may be asked to intervene.

For example, if the company runs into serious trouble, the trustee cannot simply step in and replace the directors because it believes they are making poor decisions. Any intervention must follow the rules set by the Act and the trust deed.

That is why the wording of the trust deed matters. You need to decide in advance who should run the company, what should happen if you die or lose capacity, and when someone should be able to ask the trustee to act. Otherwise, the structure may not work as you intended when your family needs it most.

IV. RESERVED POWERS: HOW MUCH YOU CAN KEEP

When you set up a BVI trust, you transfer assets, such as company shares or investments, to a trustee to hold for your beneficiaries. However, transferring your assets does not always mean giving up every decision-making power. Under section 86 of the BVI Trustee Act, you can reserve certain powers for yourself or give them to another person without invalidating the trust for that reason alone.

For example, you may want to keep the power to appoint or remove a trustee, change the beneficiaries, or direct how certain trust assets are handled. To make this work, the trust deed must clearly state which powers you keep, who can exercise them, and what each power allows. That way, everyone knows where your authority begins and ends, rather than assuming that keeping one power gives you control over the entire trust.

Section 86 of the Trustee Act, as amended by the Trustee (Amendment) Act 2021 (No. 12 of 2021), says that reserving or granting these powers “shall not (a) invalidate the trust; (b) prevent the trust taking effect according to its terms; or (c) cause any of the trust property to be part of the estate of the settlor.”

Clearly, this gives the BVI considerable flexibility when drafting a trust deed. However, it does not mean that every exercise of a reserved power is valid. The power must still be exercised within the limits of the trust deed and the law that applies.

The 2021 changes also matter if you already have a BVI trust. Harneys notes that the 2021 expansion applies to existing BVI trusts as well as new ones. If your trust was set up before 2021, ask your trustee or adviser to review the deed and check whether its reserved powers still reflect your intentions

A Broad Power Still Has Limits

In Grand View Private Trust Co Ltd v Wong [2022] UKPC 47, the trustee of a Bermudian family trust used its powers to remove the settlors’ descendants as beneficiaries and make the trustee of a separate purpose trust the sole object of the original trust. The Privy Council held that the decisions had been made for an improper purpose

The case shows why broad wording in a trust deed does not give a trustee unlimited freedom. A court may ask two questions:

1. Did the deed allow the trustee to make that decision?

2. Did the trustee use the power for a proper purpose?

Both questions are separated because a power may be broad enough to cover a decision on its wording; yet its exercise may still be improper.

Although the appeal came from Bermuda, the decision remains highly relevant to BVI trusts: it’s an important Privy Council decision on common-law trust principles. For a BVI trust, it is a useful warning when drafting powers to add or exclude beneficiaries, amend the trust, or redirect its assets. Thus, the deed should make the intended purpose and limits of those powers clear. Mourant reads the case as a warning to seek the court’s blessing before any momentous decision.

V. CREDITORS AND TRANSFERS TO TRUST

Offshore trusts are often promoted as a way to protect wealth from creditors. However, a BVI trust does not make assets untouchable.

Under section 81(1) of the Conveyancing and Law of Property Act 1961, a person prejudiced by a transfer made with intent to defraud creditors can ask the court to set it aside. As a result, moving assets into a trust does not prevent a creditor from challenging the transfer. What matters is the purpose behind the transfer, the evidence available and the circumstances of the case.

What a Creditor Must Prove

According to Conyers, the creditor must show an intent to defraud and the prejudice caused by it. There is no need to prove actual deceit, but there must be “some element of dishonesty” or sharp practice.

The claim does not succeed simply because the settlor transferred assets into a trust. However, if the court finds that the legal test is met, the transfer may be set aside. The consequences depend on the transaction and the relief the court grants. Additionally, section 81 protects certain later transfers made for valuable consideration and in good faith, where the recipient had no notice of the intent to defraud.

The Six-Year Period Is Not the Shield It Looks Like

An action cannot be brought more than six years after the cause of action accrued. Under section 25 of the Limitation Ordinance, though, that period does not start until the claimant discovered the fraud, or could have discovered it with reasonable diligence.

So the clock does not necessarily start when you sign the deed; it starts when the claimant discovers the fraud, or could have discovered it with reasonable diligence. If a creditor only discovers the fraud in year nine and could not reasonably have found it earlier, the six-year period can run from then.

The BVI case Bigler v Blettner, Civil Suit No 197 of 1993, is also relevant to how section 81 claims can apply to a transaction that prejudices creditors. In this instance, the BVI High Court considered a transaction involving a company’s principal asset while creditors remained unpaid. However, whether a transfer can be challenged depends on the evidence and the facts of the particular case.

VI. FORCED HEIRSHIP AND THE BVI FIREWALL

Some countries protect the inheritance rights of close family members. For example, forced-heirship rules may reserve part of an estate for children or a spouse, even if a will says otherwise. The exact rules depend on the country.

This can create a problem for a founder who wants to pass wealth to chosen beneficiaries through a trust. As a matter of fact, a family member may argue that the transfer conflicts with their inheritance rights under local law.

As it happens, the BVI has a legal safeguard for this situation: its trust firewall. Section 83A of the Trustee Act limits when foreign inheritance rules can affect a BVI-law trust. Then, the 2021 amendments strengthened that protection. However, the firewall does not bind every foreign court, so where the family lives and where the trust assets are held still matter.

What Section 83A Protects

Section 83A of the BVI Trustee Act is designed to stop certain foreign laws from undermining a BVI-law trust. It covers more than forced heirship.

• First, the firewall addresses foreign laws that do not recognise trusts. A trust governed by BVI law is not invalid simply because another country does not recognize the trust concept.
• Second, it protects against certain claims based on family relationships. For example, a person may claim rights over trust property because they are related to the settlor or a beneficiary. Section 83A limits the effect of those foreign-law claims in the BVI.
• Third, the firewall affects how the BVI treats foreign court judgments. Under section 83A, a foreign judgment cannot be recognized or enforced in the BVI to the extent that it conflicts with the protections set out in the section. The Act specifically addresses foreign judgments that vary a BVI trust without the consent of the adult beneficiaries who have legal capacity.

A Recent Example: Iraqi Law and BVI Shares

Additionally, section 83A deals with cases where foreign law does not recognise trusts at all. To be precise, the BVI High Court confirmed this point in 2026 in NMH & ATG v PWP & NKT. The dispute involved shares in a BVI company and an argument that Iraqi law should govern the alleged trust. Because Iraqi law does not recognize trusts in the same way as BVI law, the defendant argued that no enforceable trust interest could arise.

The court rejected that argument at this stage of the proceedings. It held that BVI law governed the essential validity of the alleged trust of the BVI company shares under section 83A. However, the court did not decide that the trust existed. That question remained separate.

The practical lesson is narrow but important: where the alleged trust property consists of shares in a BVI company, a party cannot defeat the claim simply by arguing that the law of another country does not recognise trusts.

Beyond that, the 2021 amendment also widened the firewall’s reach. It now addresses certain foreign-law claims based on a personal relationship with either the settlor or a beneficiary. This matters because a challenge may come from someone connected to a beneficiary, not just from someone related to the person who created the trust.

Where the Firewall Stops

Two limits matter in practice. 

The first limit is geographic.

The BVI firewall governs how BVI law treats foreign laws and judgments. It does not require a French, Spanish or other foreign court to reach the same result.

For example, a family member may bring a réserve héréditaire (forced-heirship) claim in France. The French court would decide whether it has jurisdiction, which law applies and what relief is available. If the claimant obtains a judgment, the next question is whether and where that judgment can be enforced. Assets held outside the BVI may face different risks from assets held within it.

Therefore, if you live abroad or hold assets in several countries, do not rely on the BVI firewall alone. Get advice on the law of the countries where you live, where your family members may bring claims, and where the trust assets are held.

The second is contractual.

Section 83A allows for an express provision in the trust or disposition that changes how the firewall applies. As a result, the deed’s wording matters.

If you already have a BVI trust, ask your trustee or lawyer to check whether the deed contains any provision that limits or excludes the firewall’s protection. If you are setting up a new trust, make sure the deed reflects the protection you expect it to provide.

VII. HOW LONG A BVI TRUST LASTS, AND HOW TO CHANGE IT

How Long Can a BVI Trust Last?

A BVI trust can last for generations, but the law sets limits on how long certain interests can remain unvested. This is known as the rule against perpetuities.

For trusts created under instruments taking effect after 15 May 2013, the trust deed can set a perpetuity period of up to 360 years. Earlier trusts are generally subject to the former 100-year limit. However, the trust deed may set a shorter period, so check its terms rather than assuming the trust can last for the full 360 years.

The BVI also follows a “wait and see” rule. This means a trust interest is not invalid just because it might pass to someone too late. Instead, the law waits to see whether it becomes clear that the interest will vest after the permitted period.

There is also an important exception. In reality, the rule against perpetuities does not apply to charitable or non-charitable purpose trusts. As a result, these trusts can continue beyond the time limits that apply to ordinary private trusts.

Changing a Trust: Section 58B and Its Catch

Family circumstances and tax rules can change long after a trust is created. For that reason, the BVI added section 58B to the Trustee Act in 2021. It gives the court power to change a trust’s terms, including who benefits from it, even where the change may adversely affect someone.

However, section 58B does not apply to every BVI trust. A trust created on or after 9 July 2021 must expressly opt in through its trust instrument. An older trust governed by another country’s law may also qualify if its governing law is changed to BVI law and the required instrument expressly opts in.

The court must still decide that the proposed change is expedient in the circumstances. It must also consider the factors set out in section 58B where they are relevant. In addition, the section does not allow an order to affect an interest that has already vested absolutely and indefeasibly in possession.

As a result, section 58B can provide a way to update a trust when circumstances change, but it is not a shortcut around the trust deed or the court’s requirements. If you want this option, check that the deed includes the required wording before you rely on it.

⚠️ Section 58B is opt-in only.

Per O’Neal Webster, it applies to trusts created after the 2021 Act took effect where the trust instrument expressly says so, and to foreign trusts that move to BVI law where the change-of-law document expressly says so. An existing BVI trust with no opt-in wording cannot use section 58B. If your deed predates July 2021, check whether it expressly opts into section 58B.

Section 59A puts the Hastings-Bass rule into BVI law. It lets the court set aside a fiduciary decision where the decision-maker ignored something relevant or took account of something irrelevant, and that mistake affected the decision.

Practical note.

The BVI does not have a US-style statutory decanting regime where a trustee can simply move the assets into a new trust with different terms. Changes can instead come through the trust deed’s own powers, reserved powers (Chapter IV), or the court’s statutory variation powers.

If you want section 58B flexibility, build it into the deed from the start. Adding it later may require a court application or another valid power under the trust deed.

VIII. BVI TRUSTS, PRIVATE TRUST COMPANIES AND REPORTING

The choice of trustee also affects the company’s reporting duties.

What a Private Trust Company Is

Instead of appointing a bank or licensed trust company, a family can form its own company to act as trustee. That is a private trust company, or PTC. Family members can sit on its board, so the family can keep a much closer role in how the trustee is run.

Mourant sets out the conditions under the Financial Services (Exemptions) Regulations 2007. The PTC must be set up in the BVI, and its memorandum must say that it is a PTC. Its name must include (PTC) before the corporate suffix. It can only carry on related or unremunerated trust business. Its registered agent must hold a Class I trust licence, and the PTC cannot offer trust services to the public. The initial registration fee is USD 1,500, followed by an annual fee of USD 1,500.

Related trust business means that every beneficiary is the settlor, someone connected to the settlor, or a charity. Unremunerated trust business means the PTC and its associated people do not get paid for providing the trust services, apart from certain director fees.

How the Reporting Rules Change

On 2 January 2025 the beneficial ownership regime for BVI companies took effect, under the BVI Business Companies (Amendment) Act 2024 and the Business Companies and Limited Partnerships (Beneficial Ownership) Regulations 2024. For a new BVI company, the registered agent must file the beneficial ownership information through VIRRGIN within 30 days of incorporation. The information must also be kept accurate and up to date when it changes.

This is where your choice of trustee matters. If a BVI company is held through a trust, it may qualify for a reporting exemption if its trustee is licensed under the Banks and Trust Companies Act and meets the legal conditions. If the exemption applies, the company may file less information about the people behind the trust. However, a private trust company (PTC) does not qualify for this exemption just because it can provide trust services without a full trust licence. The company must still check whether another exemption applies and meet all the relevant conditions.

One recent change is worth noting. The beneficial ownership rules were amended on 29 December 2025. The changes affect when a company can lose its exemption, including where its shares are held by a licensed or foreign regulated trustee. So, the exemption is not permanent. The company must keep meeting the rules for it to apply.

Then the regime splits, and your choice of trustee decides which side you land on.

The trade-off: A PTC qualifies as a VISTA designated trustee, so it keeps control inside the family. The same choice forfeits the licensed-trustee filing exemption, so the family’s details go to the Registry. Control and reduced filing are not available together. Decide which one you actually want before you form the PTC, because reversing the decision means changing trustee.

BVI reporting and CRS are two different things.

If your BVI company qualifies for the licensed-trustee reporting route, it may be able to name its licensed trustee in its BVI filing instead of reporting the usual individual beneficial ownership details.

However, this does not mean your identity is hidden from the trustee or exempt from tax reporting. CRS has its own rules. Depending on how your trust or company is classified, you and other people linked to the trust may still need to be reported to the BVI International Tax Authority.

Before you set up the structure, ask two separate questions: What information must the company file in the BVI, and who must be reported under CRS? Ask your trustee to explain both, including whether your details could be sent to the tax authority in your country of tax residence.

Who Can See the Register

The BVI does not have a public beneficial ownership register. Since 1 April 2026, someone can ask for access only if they can show a legitimate interest. This can include certain AML checks and investigations into money laundering, terrorist financing or proliferation financing.

The timeline is straightforward. The beneficial ownership rules took effect on 2 January 2025. They were amended on 1 July 2025. Applications for exemptions opened on 2 January 2026, and the legitimate-interest system went live on 1 April 2026.

If access is granted, the information available is limited. It covers beneficial owners with 25% or more ownership or control. The information includes their name, nationality, month and year of birth, and the nature and extent of their interest. The company is notified of the request and has five days to object.

A beneficial owner can also apply for an exemption from disclosure. The rules cover cases such as serious risk, national security, vulnerable persons and certain public-interest grounds.

The Duty on Your Trustee

The company rules are only part of the picture. BVI trustees have their own duties.

The Trustee (Amendment) Act 2024 came into force on 10 December 2024 and added section 92B to the Trustee Act.

Under section 92B, trustees must collect and keep adequate, accurate and up-to-date information about the people behind the trust. They must take reasonable steps to check that information and update it within 30 days of becoming aware of a change. They must also keep the records for at least five years after the trust ends.

A trustee who fails to comply without a reasonable excuse can face a fine of up to US$75,000.

None of this means the trustee files the information on a public trust register. The trustee keeps the records and must provide them to the relevant authority when the law requires it.

Enforcement in Practice

The BVI Financial Services Commission publishes its enforcement actions. Recent penalties against trustee businesses include:

Those are established firms, not shell operators. If a trustee has an enforcement record, check what the breach involved, how serious it was, and what action followed.

IX. BVI TRUST REPORTING: ECONOMIC SUBSTANCE, CRS AND FATCA

Economic Substance Does Not Apply to Your Trust

Carey Olsen states plainly that the substance legislation “does not apply to trusts or general partnerships”. The Economic Substance (Companies and Limited Partnerships) Act 2018 covers companies and limited partnerships. A trust is neither.

The BVI company underneath your trust is a different matter. If it carries on one of the nine relevant activities, such as banking, insurance, fund management, finance and leasing, headquarters, shipping, holding, intellectual property, or distribution and service centre business, it may have to meet the substance requirements and file. The declaration is due within six months of the end of its financial period. Penalties run up to US$400,000.

Note. 

“holding business” is a relevant activity. A BVI company whose only job is to hold shares for your trust is likely doing exactly that. The substance test for pure holding companies is lighter than for the other categories, but it is not zero, and the filing is not optional.

CRS: Which Box Your Trust Falls Into

Under the Common Reporting Standard, a BVI trust can be a Financial Institution or a Non-Financial Entity. An NFE can be either Active or Passive. In broad terms, a trust that is professionally managed and mainly holds financial assets may fall within the Financial Institution rules, depending on how it is structured and managed. A trust holding an operating business or real estate, with no professional discretionary manager, tends to be a Passive NFE.

The trustee’s CRS status affects who must report information about it and the people involved. But being named in the trustee’s records does not always mean your details will be sent to another country’s tax authority. This depends on the type of trust, your role and your tax residence.

The BVI International Tax Authority guidance notes set out who gets reported.

Why this matters to you

If you want to know whether your name will be reported, do not rely on the trust deed alone. In practice, your trustee’s CRS classification affects whether you are identified for reporting and how the bank treats your role:

• If the trust is a Passive NFE, the settlor is treated as a controlling person even after giving up control.

• If it is a Financial Institution, the account-holder rules apply instead, so giving up control may change the result.

Therefore, it’s advised to ask your trustee to confirm the trust’s CRS classification and explain whether your identity must be reported, in what capacity, and whether the information will be exchanged with your country of tax residence.

It’s also important to note that being identified under CRS does not automatically mean your details will be sent to that country.

CRS Reporting: When Is the Settlor’s Identity Disclosed?

As previously mentioned, a BVI trust does not automatically mean your name will be sent to your home tax authority. The key question is what the trust owns and how the relevant account is classified.

• CASE 01

  Case 1: Your trust owns an operating business

  Suppose you establish a BVI trust that owns a company running a genuine business. The company earns income from trading, manufacturing or providing services. It is not simply holding investments. The company opens a bank account to receive customer payments and pay business expenses.

  If the company qualifies as an Active Non-Financial Entity (Active NFE) under CRS, the bank treats it differently from a passive investment entity.

  QUESTION

  Will the bank report your identity through the operating company’s account?

  NO

  The bank does not have to look through an Active NFE to identify and report the people who control it under the CRS rules that apply to Passive NFEs. This means your identity will not be reported as a controlling person through that account simply because you settled the trust that owns the company.

  !

  Important condition

  However, the company must genuinely qualify as an Active NFE. One of the main tests is that less than 50% of its gross income is passive income and less than 50% of its assets produce, or are held to produce, passive income. Other tests may also apply.

  KEY TAKEAWAY

  So, your identity will not be reported through the operating company’s account under this rule. However, this only covers the company’s account. If the trust has its own bank or investment account, that account must be checked separately.

  CASE 02

  Case 2: Your country does not receive the report

  Suppose you establish a BVI trust and hold a bank account with a reporting financial institution in the BVI. You are tax-resident in a country that is not a reportable jurisdiction for the relevant reporting year.

  In reality, CRS does not automatically send every account report to every country. Instead, financial institutions report information under the rules that apply to reportable jurisdictions.

  QUESTION

  Will the BVI send your account information to your country of tax residence under CRS?

  No, not necessarily.

  The BVI shares financial account information only with countries on its list of reportable jurisdictions. If your country is not on that list for the year in question, the BVI will not send your account information to your country’s tax authorities under CRS.

  In other words, your country’s tax authorities will not receive your account information through CRS for that year. Certainly, the BVI may still collect and report your information within the BVI, but it will not exchange that information with your country under CRS.

  Note:

  Before relying on this outcome, it’d be wise to regularly check the BVI’s current reportable-jurisdiction list. After all, a country’s status can still change.

  CASE 03

  Case 3: Your trust holds real estate directly

  Suppose your BVI trust owns a residential property or commercial building directly. The property is not held through a company, and the trust does not hold a bank account, custody account or other financial account that triggers CRS reporting.

  CRS covers financial accounts, not every asset a person or trust owns. As such, real estate held directly by a trust is not, by itself, a financial account under CRS.

  QUESTION

  That being said, will the BVI report your identity under CRS just because your trust owns real estate?

  No.

  Your identity will not be reported under CRS on the basis of the property alone.

  The property itself does not trigger a CRS report.

  Important distinction

  However, if the trust also holds a bank or investment account, that account must be assessed under the CRS rules. For example, a bank account used to collect rent may be subject to separate reporting requirements. It’ also important to note that the property may as well be subject to local ownership disclosures, tax filings and other reporting duties. These are separate from CRS.

  Nonetheless, the fact remains: your identity will not be reported under CRS just because your trust owns real estate directly.

  CASE 04

  Case 4: What if you give up control of the trust?

  You might be wondering by now: will giving up control STOP the BVI from reporting your identity under CRS?

  First, it might help to separate three things:

  THREE THINGS TO DISTINGUISH

  Identification:

  Does the bank have to identify you and record your details?

  Reporting:

  Does the bank have to report your details in a CRS report to the BVI?

  Exchange:

  Will the BVI send that CRS report with your details to your country’s tax authority?

  The answer depends on how the trust is classified under CRS:

  BRANCH 01

  If the trust is a Passive NFE

  Will the bank identify you?

  Yes.

  Giving up control does not remove you from the list of people the bank must treat as controlling persons. Under CRS, the bank must generally identify the settlor, trustee, protector, beneficiaries or class of beneficiaries, and any other natural person who exercises ultimate effective control.

  BRANCH 02

  If the trust is a Financial Institution:

  Will the bank identify you as an account holder just because you set up the trust?

  No, not if

  you have genuinely given up ultimate effective control, are not a beneficiary, and have no other role or interest that makes you an account holder under CRS.

  Will the bank report your details to the BVI?

  No, not on the basis that you were the settlor alone.

  But if you remain a beneficiary, retain control, or otherwise qualify as a reportable account holder, only then would your details still be reported.

  Will the BVI send your details to your country’s tax authority?

  Yes, only if

  you are reportable under CRS and the BVI exchanges that information with your country for the relevant year.

FATCA: When Do US Tax Rules Apply?

If you are setting up a BVI trust, you may be wondering whether you will have to deal with US tax reporting as well. The answer depends on the trust, the accounts it holds, and whether any US reporting rules apply.

The good news is that you may not need to register the trust separately. Under the BVI’s trustee-documented trust rules, a qualifying trustee can take responsibility for reporting the trust’s US reportable accounts. This can make compliance simpler, provided the trustee meets the rules and agrees to handle the reporting.

Before you choose a trustee, ask whether your trust qualifies for this arrangement, who will file the reports, and what the service costs. Also, check CRS separately because meeting one regime’s requirements does not automatically satisfy the other.

What This Means at the Bank

FATF revised Recommendation 25 in February 2023, and published guidance on 11 March 2024. Trustees of express trusts must disclose their status to financial institutions. “Adequate” information covers data sufficient to identify the beneficial owners and their role in the arrangement.

The guidance also names the problem directly. Multiple layers and distance between the beneficiary and the other parties, combined with several jurisdictions, make identification and verification harder.

The practical effect is that your bank will separate two questions:

1. Source of funds asks where this particular money came from.

2. Source of wealth asks how you built the fortune in the first place.

Trust structures get asked the second question harder, because the account holder is a trustee rather than the person who earned the money. Prepare the trust deed, the trustee’s licence details, a clear explanation of the wealth’s origin, and the identity documents for everyone in the table above.

X. DIVORCE AND THE ENGLISH COURTS

The firewall in Chapter VI does not stop an English divorce court from looking at the trust. English courts have dealt with trusts in divorce cases in several ways, and it is worth knowing what they can and cannot do.

They use three routes:

1. The trust as a resource

In Thomas v Thomas [1995] 2 FLR 668, the Court of Appeal accepted that a court can frame an award on the expectation that trustees will help the spouse meet it. This became known as judicious encouragement. The court does not order the trustee to do anything. It orders the spouse to pay, and leaves the trustee to decide whether to fund it.

2. Predicting the trustee

Ipeckci v McConnell [2019] EWFC 19 took a more direct approach. Rather than encouraging, the court asks as a question of fact, on the balance of probabilities, whether the trustees would in fact make funds available.

3. Varying a nuptial settlement.

A court can vary a settlement made on the parties to a marriage. Brooks v Brooks [1995] 1 All ER 257 held that a settlement is nuptial where it makes some form of continuing provision for either party to the marriage.

That definition is wide. A family trust can fall within that rule if, in substance, it was set up to provide ongoing financial support or other benefits to one of the spouses during the marriage. The court looks at what the trust was set up to do, not just what the trust deed calls it.

In Quan v Bray [2015] EWCA Civ 1253, the Court of Appeal found that a charitable trust set up to protect tigers was not a post-nuptial settlement. That meant the court could not vary the trust as part of the divorce proceedings.

XI. BVI OR WYOMING: CHOOSING BETWEEN THE TWO TRUST JURISDICTIONS

Korporatio forms trusts in Wyoming and companies in the BVI. Those are the two trust regimes worth comparing here, because they answer different questions.

XII. BVI TRUSTS: FREQUENTLY ASKED QUESTIONS (FAQs)

Browse by topic

01   Setting One Up ↓
02   VISTA and Control ↓
03   Tax and Reporting ↓
04   Changing Things Later ↓

01 / Establishment

Setting One Up

Q/ Do I have to live in the BVI, or visit it?

No, there is no residence requirement for a settlor or a beneficiary. Your trustee needs the BVI connection, not you. For a VISTA trust that means a licensed BVI trustee or an exempt private trust company.

Q/ Does my BVI trust get registered anywhere?

No, a BVI trust does not appear on a public trust register. Although some information must still be kept by the trustee or shared with the relevant authorities.

Under section 92B of the Trustee Act, the trustee must keep records of beneficial ownership. If the trust owns a BVI company, that company may also have to report its beneficial owners. Since 1 April 2026, people who can show a legitimate interest may access certain company ownership details. A new BVI trust also carries a US$200 trust duty.

Regardless, the key point is that your trust details are not open to the public.

Q/ Can I be a beneficiary of my own BVI trust?

Yes, you can set up a BVI trust and name yourself as a beneficiary. For example, you could transfer investments into the trust and receive payments from it to cover your living costs, if the trust deed allows this.

What matters is how the trust is set up. You need to know who can approve payments, when you can receive them, and whether the trustee has the final say. You should also consider how your rights to the assets may affect the protection the trust offers against creditors.

In short, you can benefit from the assets without holding them in your own name. But the level of access and protection you get depends on the terms of the trust.

02 / Governance

VISTA and Control

Q/ Can a VISTA trust hold shares in my Delaware or Singapore company?

No. VISTA only applies to shares in a BVI company. However, you can use a BVI holding company to make it work. The trust holds the shares in the BVI company, and that company owns your Delaware or Singapore business. This setup can help keep the trustee from interfering in how you run your business, as long as the trust deed and VISTA rules allow it.

Q/ Can my trustee sell my company shares against my wishes?

Under VISTA, section 5(1) puts the shares on trust to retain them, and section 5(2) makes that duty outrank the duty to preserve or enhance value. That is the protection. It also means the trustee is not obliged to sell to protect you from a falling share price.

Q/ Who can force the trustee to step in if the company is being run badly?

An interested person, on a permitted ground, under section 8. The catch is that section 8(2) does not require the deed to specify any permitted ground. Check yours.

03 / Compliance

Tax and Reporting

Q/ Does a BVI trust make my income tax-free?

No. A BVI trust is generally exempt from BVI income tax, but that does not make its income tax-free everywhere. Your country of tax residence may tax the trust, its settlor or its beneficiaries under its own rules. Check the local foreign-trust and controlled-entity rules before assuming otherwise.

Q/ Do I have to file an economic substance return for the trust?

No. The legislation does not apply to trusts. A BVI company held by the trust files if it carries on a relevant activity, within six months of its financial period end.

Q/ Will my name be reported under CRS?

If the trust is a Passive NFE: Yes, if you’re a Reportable Person.

The bank must identify the settlor, trustee, protector, beneficiaries or class of beneficiaries, and other natural persons who exercise ultimate effective control. Giving up control does not, by itself, remove the settlor from this list. As a consequence, your details will be reported if you are a Reportable Person and the trust’s account is reportable under CRS.

If the trust is a Financial Institution: Not necessarily.

If you are the settlor, have given up ultimate effective control, and are not a beneficiary, the BVI International Tax Authority has stated that you are not treated as an account holder on that basis alone. Hence, your name will not be reported on that basis alone.

Will your country receive the information? No, unless

your country is a reportable jurisdiction for the relevant year, the BVI has an active exchange relationship with it, and the account and your details meet the CRS reporting rules. Otherwise, your information will not be sent to your country through that CRS exchange.

04 / Amendments

Changing Things Later

Q/ My trust was set up in 2016. Can I use section 58B to vary it?

Not unless the trust instrument opted into section 58B. The section applies to post-2021 trusts only where the deed expressly says it applies. It can also apply to an older foreign trust that moves to BVI law if the relevant instrument expressly opts in. Check the deed before assuming section 58B is available.

Q/ Can my trustee move the assets to a better trust without going to court?

The BVI has no statutory decanting power. Changes usually depend on powers in the trust deed, any valid reserved powers, or an application to the court.