This guide provides a high level summary of the main obligations for BVI investment funds under BVI automatic exchange of information (AEOI) legislation.
The legislative framework
The BVI Government is a signatory to:
A Model 1B intergovernmental agreement with the United States (the IGA) which provides the framework for the implementation of the US Foreign Account Tax Compliance Act (FATCA) in the BVI
The OECD sponsored Multi Competent Authority Agreement regarding the new common l reporting standard on automatic exchange of information (CRS, together with the IGA, the AEOI Agreements).
As BVI entities are not directly subject to the AEOI Agreements, the key BVI statute in relation to tax information exchange is the Mutual Legal Assistance (Tax Matters) Act 2003 (MLAT) and the orders made under MLAT (together, the AEOI Legislation).
The BVI International Tax Authority (ITA) is the designated Competent Authority under MLAT and is responsible for matters concerning tax information exchange. The ITA has issued guidance notes (the Guidance Notes) in relation to the US and UK IGAs which can be found here and in relation to CRS which can be found here.
Funds as investment entities and therefore financial Institutions
There are differences between all three of the AEOI Agreements which have been replicated in the AEOI Legislation in terms of the definitions and application to the business of any BVI fund.
In practice, despite the differences, the majority of BVI investment funds fall within the definition of Investment Entity, under each of the regimes. There will be some very rare exceptions to this rule. Investment Entities are one of the types of Financial Institution under the AEOI Legislation. Under FATCA, the term Foreign Financial Institution is used, but for the purposes of this Guide we will refer to FIs or Financial Institutions. The majority of BVI funds will, subject to some very limited exceptions, be Reporting FIs.
Reporting financial institutions
Reporting FIs are required to comply with registration and reporting obligations imposed under the AEOI Legislation. The most notable obligations are:
To register with the Internal Revenue Service of the United States (IRS) to obtain a global intermediary identification number (GIIN) (even if the Reporting FI has no US Reportable Accounts) either through the IRS FATCA PORTAL or through a paper submission. Registered Deemed Compliant Fis are also obliged to register with the IRS.
To register with the ITA through its online portal, the BVI Financial Account Reporting System (the BVI FARS)
To identify Reportable Accounts in accordance with the due diligence requirements set out in the AEOI Agreements, the relevant AEOI Legislation and the Guidance Notes
To report annually to the ITA certain specified information with respect to any Reportable Accounts.
Registration with the IRS
A BVI fund which is a reporting FI is required by FATCA to register with the IRS within 30 days of 'starting business'. While a fund is not technically operating until it starts to accept subscription payments from investors, in reality, all funds will have to provide their GIIN numbers to banking and other counterparties at a very early stage of their creation in order to open accounts. It is therefore important to get this registration done as soon as possible after the vehicle has been formed.
When registering for a GIIN, the IRS portal requires the name of a natural person to be listed as the FI's Responsible Officer (RO), despite the fact that under the US IGA this role is not mentioned. The application requires the RO to certify that the information provided is accurate and that the BVI fund will comply with its FATCA obligations. The RO should be someone with authority under BVI law to provide the confirmations and submit the information required by the application. A director or general partner of the fund would have this authority under BVI law and may delegate it to a third party such as the ...

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