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Newsletter | Articles New VISTAS for BVI The new Virgin Islands Special Trusts Act 2003 gives its name to the VISTA trust. The VISTA trust is a cleverly designed vehicle which will significantly extend the use of trusts for owning shares particularly in active businesses expected to have a long life. Up to now, one of the problems of a business whose shares are owned by trust and operated by trustees has been the long-established principle of the ‘prudent man of business’ which has constrained the trustees to exploit the shareholding to the best advantage, possibly in conflict with the wishes of the settlor. Neither does this assure succession, as the trustees may feel obliged to sell or liquidate the company for short-term gain. Under this rule, trustees are expected to monitor the affairs of the underlying company and the actions of its directors. Clearly professional trustees are unlikely to be the best people to run an active business, where an understanding of the market and an ability to react quickly are paramount. Trustees have also to take into account liability issues where they may be held responsible for not maximising the asset value. The new VISTA trust provides a solution to these drawbacks. The trustee is no longer obliged to intervene, monitor and take management responsibilities for the underlying company, thereby eliminating the requirements of the ‘prudent man of business’ rule. The Act allows the settlor to specify particular duties for the trustee and matters like rules for the appointment and removal of directors can be laid down in the trust deed rather than made at the trustee’s discretion. The trustee may be given the power to sell shares with the consent of the directors, and both directors and beneficiaries have the right to apply to the court if the trustee fails to comply with his obligations. Other key points are:- VISTA trusts may only hold shares in BVI IBCs or domestic companies and there must be a provision in the trust deed that the VISTA Act applies. We envisage that this will increase the popularity of both BVI trusts and IBCs. The trustee must be a licensed company. ILS Fiduciary (B.V.I.) Limited holds a full Trust Licence. We believe this is an exciting and forward looking piece of legislation which puts BVI in the forefront of trust jurisdictions. To find out more contact David Ashton. To download the full copy of the Act click here.