British Virgin Islands

SUPPLEMENT - SETTING UP SPECIAL PURPOSE VEHICLES - May 23, 2005

The primary historical reasons for the use of the BVI as a centre for incorporation of SPVs are not complex:

a tax neutral regime with no corporate, income or capital gains taxation, and an absence of withholding; no exchange controls or currency risk external to the transaction (the BVI currency is the US Dollar); speed and low cost of set up; regulation at local service provider level and not on debt issuance itself with the result that no specific regulatory approval will be required or costs imposed; and an attractive legal framework in both corporate and trust spheres. Few of these reasons are different from those in other relevant jurisdictions. But a triumvirate of legislative initiatives is set to mark the BVI apart from its competitors. These legislative initiatives are at different stages: amendments to the trust legislation came into force on March 1...



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