BVI's new fund regime and its implications for JV vehicles

This year, the BVI introduced a new regulatory regime requiring certain closed ended fund vehicles, to be recognised by the BVI's Financial Services Commission as "private investment funds" or, as the funds industry loves an acronym, PIFs for short. The change, which brings these previously unregulated vehicles into the regulatory perimeter, is in line with other major offshore corporate jurisdictions, and introduces a light-touch, modern regulatory regime.

PIFs are broadly defined in the legislation as a company, partnership, unit trust or any other body that: collects and pools investor funds for the purpose of collective investment and diversification of portfolio risk; and issues fund interests, which entitle the holder to receive an amount computed by reference to the value of a proportionate interest in the whole or in part of the net assets of the company, partnership, unit trust or other body.
 
The criteria for an entity to be recognised as a PIF include that it must be limited on one of the following three bases: (1) the PIF will have no more than fifty investors; (2) invitations to subscribe for, or purchase interests in the PIF shall be made on a private basis only; or (3) fund interests shall only be issued to professional investors with a minimum initial investment (other than for certain exempted investors) of US$100,000.
 
Read the full article by Partner George Weston and Associate Natalie Bundy, originally published by International Investment here.