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Developing the right fund environment

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The BVI International Financial Centre was created as a department of the British Virgin Islands government to market and promote the financial services sector internationally.

The BVI International Financial Centre was created as a department of the British Virgin Islands government to market and promote the financial services sector internationally. Since 2002 the IFC has developed a roadshow programme that has highlighted the opportunities for financial services in the BVI to professionals in major global financial centres including London, New York, Hong Kong, Singapore, Miami, Geneva and Zurich. The presentations from the private sector, the government and the BVI Financial Services Commission cover the range of financial services offered in the BVI, including corporate domiciliation and servicing, in which the islands are a global leader, trusts, captive insurance and investment business, the focus of a specialist London roadshow last autumn. Over the years the territory has built up a very strong professional infrastructure, and the results are evident. Among offshore jurisdictions, the BVI is now the undisputed leader in company incorporations, second in hedge fund domiciliation and third in the establishment and licensing of insurance captives.

Having recently passed Bermuda to become the second largest hedge fund jurisdiction, the BVI’s position as a fund servicing centre received an important boost with last year’s acquisition of a leading local fund administrator by Fortis Prime Fund Solutions. Other well known firms with a presence in the jurisdiction or at least a fund administration licence include  Citco, Bisys, Dundee Leeds, ATC, Folio Administrators, Equity Trust, Circle Partners and International Financial Administrators. In addition, we are seeing increasing interest among other leading administrators and managers in setting up or expanding operations in the BVI, and following the arrival of Fortis, others may follow suit. All administrators active in the BVI market are set to benefit from the arrival of major industry leaders, whose presence is likely to raise the profile of the jurisdiction and to attract new business to all the players in the market. Fund administration and management is an important part of our strategy to develop the BVI financial services industry as a whole. With the constant efforts to update the islands’ investment business legislation and a widely-admired regulatory regime, along with a broad and skilled supporting infrastructure of prominent law firms, auditors and administrators, the jurisdiction offers an attractive environment for alternative funds. The continuing growth in the number of funds domiciled or administered in the BVI is evidence that fund sponsors and their advisers now see the jurisdiction as one of their main options. The challenge is to handle this growth without losing the reputation for high quality and cost-effective service that brings clients to the BVI in the first place. With a relatively small indigenous population, the islands have long needed to bring in people with knowledge and expertise to add vital experience of other jurisdictions and markets, and to complement a welleducated local population that boasts a very high proportion of university graduates. So far successive BVI governments have managed to attract the right calibre, quality and number of people without overburdening the infrastructure of society.
Ensuring a successful long-term strategy that may include a significant expansion of the funds sector requires careful planning in areas including immigration policy, infrastructure development and housing, but there’s plenty of room for growth as long as it is managed carefully, maintaining the economic strength and quality of life that makes the BVI an exceptionally attractive place to live and work.

Humphry Leue is chief operations officer with the BVI International Financial Centre

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