The BVI Banks and Trust Companies Act (Revised Edition 2020), including amendments

29 Jan 2026

The BVI Banks and Trust Companies Act, revised as of 1 January 2020, continues to serve as a foundational legal instrument governing the licensing, regulation, and supervision of banking and trust operations within the BVI. This comprehensive legislation, known as the “BTCA”, remains pivotal in ensuring the sound management of financial entities, safeguarding stakeholder interests, and sustaining public confidence in the jurisdiction’s financial services sector. With subsequent amendments in 2022, 2023, and 2024, the Act demonstrates its adaptability in addressing emerging regulatory needs and aligning with global best practices.

Licensing framework and local presence requirements

The BTCA establishes a robust licensing framework that prohibits the operation of banking and trust businesses without a valid licence issued by the Financial Services Commission (the FSC). Licence categories are well-defined, including general banking licences, restricted licences, and various classes of trust licences, which are tailored to meet the specific operational needs of different business models. Entities must satisfy stringent criteria related to financial resources, organisational structure, and regulatory compliance to gain and maintain these licences. By requiring licensees to designate a principal office and authorised agents, the Act ensures that entities maintain a strong local presence for regulatory interactions.

2022 amendment: Bridge banks and systemic risk management

Under the Banks and Trust Companies (Amendment) Act, 2022, notable enhancements to the regulatory framework were introduced. One of the most significant changes was the addition of provisions enabling the licensing and operation of “bridge banks”. These institutions can temporarily acquire and manage the assets, liabilities, and operations of failed banks, ensuring continuity of services and financial stability during crisis situations. The amendment also introduced the concept of “systemically important banks” (SIBs), designating financial institutions whose failure would pose a systemic risk. SIBs are subject to heightened regulatory standards to mitigate potential crises. Enhanced resolution powers granted to the Commission allow for the orderly wind-down of failed banks, including liquidation, asset transfers, and depositor reimbursements. The amendment also required licensees to provide proof of deposit insurance under the Virgin Islands Deposit Insurance Act within six months of operation, further strengthening depositor protection.

2023 amendment: Governance and broader definitions

The 2023 amendment introduced additional refinements to the definition and governance of financial entities. The term “significant interest” now encompasses the ability to appoint or remove one or more directors of a licensee, reflecting a broader scope of control that necessitates regulatory oversight. Additionally, the Act clarified the definition of trust business to include arranging for another person to act in fiduciary capacities. The amendment reinforced procedural diligence by mandating that all appointments of directors and senior officers by licensees require prior approval from the Commission. These measures underscore the importance of effective corporate governance in maintaining financial sector integrity.

Formalisation of the 2024 amendment

Further expanding on the framework, the Banks and Trust Companies (Amendment) Act, 2024, introduced additional refinements to definitions and operational requirements. A key update was made to the term “trust business”, which now explicitly includes performing equivalent fiduciary functions for other legal arrangements. This broader scope ensures that emerging legal structures akin to traditional trusts are subjected to the same standards of regulation and oversight. The amendment reinforced deposit insurance requirements, compelling applicants for banking licences to submit a copy of their deposit insurance policy within six months of licensing, thereby aligning with the Virgin Islands Deposit Insurance Act.

The enforcement of the 2024 amendment was formalised through Statutory Instrument 2024 No. 76, setting its commencement date as 2 January 2025. This procedural measure guarantees clarity on the regulatory expectations and timelines, enabling stakeholders to adequately prepare for compliance.

Emphasis on transparency and compliance

Across all iterations, the BTCA places a strong emphasis on financial transparency and operational integrity. Licensees must maintain prescribed capital resources and liquidity thresholds, engage qualified auditors, and comply with annual and quarterly financial reporting requirements. Severe penalties are outlined for non-compliance, ranging from monetary fines to imprisonment, emphasising the commitment to upholding lawfulness within the financial ecosystem. Additions such as the prohibition of anonymous accounts and restrictions on using sensitive words like “bank” and “trust” further highlight an unwavering stance against money laundering and other illicit activities.

Adaptability and global alignment

The BTCA’s consistent adaptability is reflected in provisions granting the FSC authority to issue regulatory codes and address emerging challenges. These codes govern areas such as client asset protection and the consolidated supervision of banking groups. By incorporating global standards and proactive oversight mechanisms, the Banks and Trust Companies Act solidifies the BVI’s position as a competitive yet tightly regulated financial jurisdiction. The ongoing evolution of the law through targeted amendments underscores its role in fostering a secure, dynamic, and investor-friendly financial environment.

Further reading