British Virgin Islands: Shares In BVI Business Companies - Avoiding A Succession Problem

Last Updated: 28 February 2017
Article by Robert Lindley and Robert J.D. Briant

A great deal of global wealth, particularly wealth in the Asian and MENA regions, is held through British Virgin Islands ("BVI") business companies. Where the shares in a BVI business company are registered in the name of an individual rather than a corporate entity, a question will arise concerning the succession to the shares in the event of the death of the individual. The aims of succession planning are both to provide a reliable answer to this question and to reduce substantially the delay and cost involved in ensuring that effect is given to the individual's wishes, so far as they may be lawfully achieved, concerning succession.

Failure to put appropriate succession plans in place may result in unanticipated or undesired outcomes which will inevitably involve both delay and increased cost in dealing with the shares after death. This, in turn, may have significant and adverse consequences for the commercial life of the company which may, effectively, be put on hold. The adverse consequences will be exacerbated if the shareholder in question is also the company's sole director and no reserve director has been nominated – a situation that occurs with surprising frequency – since in such circumstances the assistance of the BVI Court will be required to break the management impasse.

It is therefore very important that careful thought is given to succession planning in relation to BVI shares where they are or will be registered in the name of an individual. Succession planning may take the form of a BVI Will dealing exclusively with the BVI company shares, or the establishment of a BVI trust.

BVI Wills – a solution for some cases

A BVI Will may be the simplest and most appropriate form of succession planning where, at least, the individual is not subject to "forced heirship" rules. It may also be the most appropriate vehicle for individuals who are subject to such rules but where there is no desire to make any provisions inconsistent with them.

In either case, a BVI Will may be advisable because a foreign representative of the deceased's worldwide estate (or a person beneficially entitled to it under foreign law) will have no title under BVI law to deal with BVI situated assets. Shares in a BVI business company are, for this purpose, treated as BVI situated under BVI law. Accordingly, even a validly appointed foreign representative of a deceased person's estate will have to make application to the BVI Court for a grant of representation before there may be any lawful dealing with the BVI company shares. It is, however, significantly less costly and quicker for the executor of a BVI Will which deals with the BVI company shares to obtain a grant of probate of that Will in the BVI.

It is extremely important to obtain BVI legal advice with regard to the drafting of a BVI Will. Matters can become complicated where the deceased person has executed several Wills, all governed by the laws of different jurisdictions. It is important to ensure that one Will does not inadvertently revoke another, or purport to deal with the same property as another Will but in a different manner.

Grant of Probate Procedure

In order to obtain a BVI grant of probate, a formal application is made to the BVI Court by the executors as appointed under the terms of the BVI Will. It usually takes the BVI Court six to eight weeks to process the application. However, from the date of the shareholder's death until the grant of probate has been issued by the BVI Court, the BVI shares are effectively paralysed as no one can vote, transfer or sell them, or give valid receipt for any dividends.

It is common for an individual to be sole shareholder and sole director of a BVI company. Upon such an individual's death, there will be no director authorised to update the shareholder register, or pass a shareholder resolution to appoint a new replacement director. However, it is possible to avoid this problem by nominating a reserve director whose appointment is effective upon the death of the sole director.

BVI Trusts – a solution in other cases

Where the owner of BVI shares is subject to forced heirship rules (for example, in accordance with Shariah law) and wishes to make provision for the shares' devolution which differs from that of the jurisdiction of his domicile at death, a BVI Will is likely to be an inappropriate succession planning tool. This is because, in respect of shares in a BVI business company (which are classified as movable rather than immovable property for succession purposes), BVI law treats the law of the jurisdiction of domicile at death as the law governing succession to movable property. If the provisions of a BVI Will contravene the law applicable to the testator's domicile at death, they will not have effect.

Accordingly, a more robust structure is needed and a BVI trust will, in many cases, meet that need since no transfer of property into a BVI trust may be set aside by the BVI Court on the ground that the transfer defeats heirship rights - or rights conferred on a person by reason of a personal relationship, including marriage or former marriage - under foreign law. It may also be the case that a timely lifetime transfer into trust may have beneficial estate or inheritance tax consequences which are jurisdiction specific and on which separate onshore advice needs to be taken.

It is also possible for a settlor who transfers his BVI company shares into a BVI trust, to reserve certain powers relating to the administration of the trust, such as the power to amend or revoke the trust, the right to receive dividends and to direct the trustee to make certain investments of the company's property, i.e. the trust's assets.

A BVI trust has the advantage over a BVI Will in that the settlor may retain some control and benefit from the BVI shares during his lifetime. Furthermore, a BVI trust provides longer term estate planning as the BVI company shares may remain in trust long after the settlor's death. Also, should the settlor become incapacitated and unable to deal with his business and affairs, the terms of the trust instrument may deal with such an event. A BVI trust has the added advantage that any dealings with the BVI company shares will not be paralysed upon the settlor's death or incapacity, and there will be no issue of delay whilst an application for probate or other court procedures are pursued in respect of the settlor's death or ill health.

For more information in respect of BVI trusts, please see Conyers Dill & Pearman's Publication entitled "British Virgin Islands Trusts".

VISTA Trusts - retaining a degree of control

The Virgin Islands Special Trusts Act, 2003 (as amended) ("VISTA") provides for the creation of a type of BVI statutory trust known as the VISTA trust. VISTA is an innovative trust specifically designed to hold shares in a BVI incorporated company under which the trustee may be disengaged from management responsibility, notwithstanding that his trust shareholding gives him a controlling interest in the company, in relation to the company's affairs. It therefore allows the company and its business to be retained and run as its directors see fit.

The effect of VISTA is to remove the trustee's duty to monitor and intervene in the conduct of the directors and the management of the trust's underlying BVI company.

VISTA trusts may continue indefinitely and the regime can apply to discretionary trusts, fixed interest trusts, charitable or purpose trusts subject to satisfying the statutory criteria.

At least one of the trustees of a VISTA trust must be a BVI company licensed under the BVI's Banks and Trust Companies Act, or a BVI private trust company. Individuals or non-BVI companies may be co-trustees of VISTA trusts. The features of a VISTA trust which have been highlighted above are likely to give comfort to settlors who put their BVI company shares into trust that a significant amount of control over any disposition may still lawfully be retained by them under BVI law.

For more information in respect of VISTA trusts, please see Conyers Dill & Pearman's Publication entitled "British Virgin Islands VISTA Trusts".


In the vast majority of cases, one or other of the succession planning tools discussed above may be appropriate where shares in a BVI business company are held by an individual. The sensible time to address such questions is at the point of incorporation of the BVI company, but failure to address them during the lifetime of the shareholder may risk frustrating the very aims sought to be achieved by incorporating in the BVI to begin with.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions