BVI is one of the leading offshore jurisdictions in the global marketplace. In 1996, the Government of the British Virgin Islands enacted the Mutual Funds Act, which came into force in 1998, giving the British Virgin Islands a formal legal and regulatory framework within which to conduct investment funds business.

The investment funds industry in the British Virgin Islands is regulated and supervised by the Investment Business Division of the Financial Services Commission, an autonomous regulatory authority established in 2001.

Close to 4,000 hedge funds are registered in the British Virgin Islands. There are a number of distinct advantages for funds established in the British Virgin Islands compared to other offshore jurisdictions, including:

• British Overseas Territory status.
• Political and economic stability and a growth-oriented local government.
• English legal system (final right of appeal to the Privy Council in London).
• Highly-competitive government fees and costs.
• Codification of modern banking, company, mutual fund, insurance and trust laws.
• Tax-neutral environment.
• No wealth, capital gains or estate taxes.
• Asset security, and freedom to transfer and merge assets.
• Protection of wealth benefits, inheritance wishes and trust interests.
• Legislative exemptions for qualified institutions.
• Internationally recognised reputation and respectability.