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BVI Business Companies: Custodianship of Shares

Under the new BVI Companies Act (2004, as amended), BVI Business Companies are permitted to issue bearer shares, but these shares must be held by an Authorised Custodian or Recognised Custodian. They cannot simply be remitted to the end-user client.

Authorised Custodians are service providers licensed under any BVI financial services legislation. Not all service providers licensed under the BVI financial services legislation are authorised custodians. They must apply to the Financial Services Commission, and satisfy the FSC that they meet certain "fit & proper" criteria, as well has having the necessary system in place for safe custody of their bearer shares. The FSC considers the prudential regulation and anti-money laundering regulations, to ensure that these custodians comply.

Recognised Custodians are investment exchanges or clearing organisations that operate securities clearance or settlement systems in a jurisdiction which is a member of the FATF (Financial Action Task Force). These must also apply to the FSC to become recognised custodians.

The Company that is issuing the bearer shares must provide the Authorised or Recognised Custodian with the following information and due diligence:

the full name of the beneficial owner of the shares; and
the full name(s) of any other person(s) having an interest in the share(s) or a statement to the effect that no other person has any interest in the share(s).

Many clients find that it is as appropriate to establish a VISTA Trust to hold the company shares, rather than issue bearer shares.

For more information regarding BVI Companies, please do not hesitate to contact us.

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Last edited: 04-Oct-2008