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This chapter was first published in The International
Comparative Legal Guide to Fintech Laws and Regulation 2022 –
British Virgin Islands, by Global Legal Group, London.
Appleby has provided the British Virgin Islands chapter to
the International Comparative Legal Guide
– Fintech 2022, covering a broad overview of common
issues in fintech laws and regulations.
1. THE FINTECH LANDSCAPE
1.1 Please describe the types of fintech businesses that
are active in your jurisdiction and the state of the development of
the market, including in response to the COVID-19 pandemic and ESG
(Environmental, Social and Governance) objectives. Are there any
notable fintech innovation trends of the past year within
particular sub-sectors (e.g. payments, asset management, peer-
to-peer lending or investment, insurance and blockchain
The British Virgin Islands (BVI) is recognised
across the globe as a leading offshore financial centre which, as
at 31 December 2021, had over 368,000 registered companies.
Based on the attractiveness of BVI vehicles for international
businesses, asset holding and investments, there has been an
increase in the use of BVI companies as holding and operating
companies across the fintech industry, and those trends follow
those globally (moving from token offerings, towards decentralised
finance, non-fungible tokens, play to earn and other products). The
BVI has, in turn, been enthusiastic to this opportunity and has
sought to welcome this new business, with an attractive and
pragmatic regulatory approach.
In terms of ESG, we have seen a move amongst certain clients
away from the energy intensive mining of cryptocurrencies, relying
on a proof of work consensus model, in favour of proof of stake or
proof of authority consensus models. We have also seen an increased
interest in environmental projects involving the tokenisation of
carbon credits and carbon offsets.
1.2 Are there any types of fintech business that are at
present prohibited or restricted in your jurisdiction (for example
As at the date of writing, there are no particular types of
fintech businesses that are prohibited within the BVI; however,
there are certain businesses that require licensing (see question
3.1 for more detail) and must meet prescribed criteria in order to
obtain such a licence.
The BVI does currently restrict gambling businesses, and so
businesses that straddle fintech and gaming should take legal
advice before proceeding to incorporate in the BVI. In August 2020,
the BVI removed the outright restriction on gambling activities and
replaced this with a new licensing regime pursuant to the BVI
Gaming and Betting Control Act, 2020 (Gaming Act). This new Gaming
Act captures entities operating in the “gaming and betting
sectors”, including the “manufacturing, selling,
supplying, installing or adapting of gaming software” and
“providing facilities for betting of any kind”.
2. FUNDING FOR FINTECH
2.1 Broadly, what types of funding are available for new
and growing businesses in your jurisdiction (covering both equity
The BVI is a popular jurisdiction for the incorporation of
international businesses, and BVI companies are able to access
international debt and equity capital markets. For new businesses,
where obtaining debt may be hindered by a lack of track record, the
BVI is a well-known jurisdiction for seed capital, angel investors
and venture capital, as well as for funds targeting more
2.2 Are there any special incentive schemes for
investment in tech/fintech businesses, or in small/ medium-sized
businesses more generally, in your jurisdiction, e.g. tax incentive
schemes for enterprise investment or venture capital
There are currently no special incentive schemes for investment
in tech/fintech businesses in the BVI. The BVI is a tax-neutral
jurisdiction, and entities incorporated within the BVI are zero-
rated for income tax, and are not subject to capital gains tax. The
BVI does not impose stamp duty on share transfers, and no
withholding tax is applicable to share dividends.
2.3 In brief, what conditions need to be satisfied for a
business to IPO in your jurisdiction?
The BVI does not yet have a securities exchange, and so BVI
companies wishing to IPO will need to look to exchanges outside of
the BVI. The conditions to listing would, at the date of writing,
be governed by the requirements of such exchange outside of the
BVI. The flexibility of BVI corporate law makes the BVI a good
choice for a listing vehicle.
2.4 Have there been any notable exits (sale of business
or IPO) by the founders of fintech businesses in your
Notable examples include the de-SPAC of eToro,
a stock and crypotocurrency exchange, which was announced in March
2021. EToro Group Ltd will merge with a wholly owned subsidiary of
FinTech Acquisition Corp. V, a special purpose acquisition company,
with eToro having an estimated implied equity value of
approximately US$10.4 billion at closing and seeking listing on
3. FINTECH REGULATION
3.1 Please briefly describe the regulatory framework(s)
for fintech businesses operating in your jurisdiction, and the type
of fintech activities that are regulated.
There are, as at the date of writing, no specific regulations in
the BVI targeting fintech businesses generally, but where a
fintech’s business is focused on financial products and
services, they may require licensing under the BVI’s existing
financial services regulations, being:
- the Securities Investment Business Act, 2010 (as amended)
(SIBA), which provides for the licensing of
persons who are engaged in investment businesses in or from within
the BVI, and for the licensing of investment funds (including funds
with cryptographic fund interests);
- the Financing and Money Services Act, 2009 (as amended), which
provides for the licensing of, among other areas, peer-to-peer
lending platforms, fiat credit providers (in certain
circumstances), money transmission businesses and fiat currency
- the Banks and Trust Companies Act, 1990 (as amended), for
fintech companies that accept fiat deposits in a manner akin to
- the Insurance Act, 2008 (as amended) for insurtech
3.2 Is there any regulation in your jurisdiction
specifically directed at cryptocurrencies or
As at the date of writing, there is no separate framework for
the regulation of cryptocurrencies or cryptoassets in the BVI.
Instead, the BVI has relied upon existing legislation regulating
financial instruments to capture digital assets where they exhibit
characteristics of a financial product or security.
To date, the primary piece of legislation affecting the
regulation of digital assets (including cryptocurrencies) in the
BVI has been SIBA (see question 3.1), which sets out an exhaustive
list of instruments considered to be “investments” in
the BVI (which include, for example, shares, debt instruments,
futures and contracts for difference). Where a digital asset
exhibits characteristics of an “investment” under SIBA,
the issuer of the asset will be either dealing in, or arranging
deals in, securities, although the issuer’s activities may
fall within a list of excluded activities or safe harbours under
SIBA. The provisions of SIBA would not typically capture most
cryptocurrencies (including, for example, bitcoin or ether) or
utility tokens, but may cover digital assets which exhibit features
of, for example, future property ownership, derivatives or revenue
sharing. In July 2020, the BVI regulator, the Financial Services
Commission (FSC), issued further guidance on the
types of digital assets that would be seen to be
“investments” under SIBA.
In response to the Financial Action Task Force’s
(FATF) recommendations for a risk-based approach
to digital assets and service providers, the BVI is proposing to
enhance its regulatory landscape with regulation specifically
directed at digital assets. It is expected that these regulations
could be in force by late 2022 or early 2023, after a short public
consultation period. Such regulations are expected to follow the
FATF recommendations and require the licensing and/or registration
of “virtual asset service providers”, increased
supervision and monitoring and increased anti-money laundering
3.3 Are financial regulators and policy-makers in your
jurisdiction receptive to fintech innovation and technology-driven
new entrants to regulated financial services markets, and if so how
is this manifested? Are there any regulatory ‘sandbox’
options for fintechs in your jurisdiction?
The BVI has been positioning itself as a welcoming jurisdiction
for fintech innovation, and has been coordinating efforts to both
educate the population of the BVI as to new technologies, and to
attract fintech businesses to incorporate in the BVI.
The FSC launched a regulatory sandbox in 2020, aimed at
companies, whether start-ups or established existing businesses,
looking to develop, promote, utilise or implement new technology in
the financial services sector. The sandbox gives companies, and
their customers, the benefit and comfort of regulatory oversight,
but reduces the requirements that would normally be overly costly
or burdensome on new ventures. The first sandbox entrant was
announced in April 2021.
The BVI sandbox is open to any companies or limited partnerships
incorporated in the BVI, as well as non-BVI companies looking to
conduct business in the BVI. Once admitted, a participant can
remain in the sandbox for up to 18 months, with the opportunity to
extend for a further six months. The application consists primarily
of a business proposal, with follow-on discourse with the FSC to
establish parameters for activity once in the sandbox.
3.4 What, if any, regulatory hurdles must fintech
businesses (or financial services businesses offering fintech
products and services) which are established outside your
jurisdiction overcome in order to access new customers in your
In general, the regulations listed in question 3.1 apply to
entities operating “in or within the BVI”, regardless
of their place of establishment. Consequently, where a non-BVI
company is caught by such regulations, the first step is to
establish whether that non-BVI company is actually operating
“in or from within” the BVI. Under SIBA, a person is
determined to be operating “in or from within” the BVI
- they occupy premises in the BVI for the purposes of
carrying on investment business; or
- they solicit a person in the BVI for the purpose of offering
to provide a service that constitutes investment business.
As noted above, the BVI is a common jurisdiction for holding
companies, and it is relatively unusual for BVI entities to have
any employees or other representatives actually within the BVI,
other than its registered agent. The solicitation of such an
entity, by the non-BVI company, would not, in our view, result in
the non-BVI company being deemed to be operating in or from within
the BVI, provided that no solicitation actively takes place in the
BVI and correspondence is made to an address outside the BVI. If
the non-BVI company, which falls within the remit of the financial
services legislation, wishes to actively solicit new customers
physically in the BVI, licensing will be required.
In general, there is no “passporting” or mutual
recognition applicable in the BVI, and so entities that operate
outside of the BVI, but which wish to actively solicit customers
within the BVI, will need to register in the BVI where they fall
within the remit of the BVI financial services legislation,
regardless of whether they are already regulated in another
4. OTHER REGULATORY REGIMES / NON-FINANCIAL REGULATION
4.1 Does your jurisdiction regulate the collection/use/
transmission of personal data, and if yes, what is the legal basis
for such regulation and how does this apply to fintech businesses
operating in your jurisdiction?
In July 2021, the BVI Data Protection Act, 2021 (the
DPA) came into force. Drafted around a set of EU-style
data protection principles to which data controllers must adhere,
personal data must be collected in a fair and transparent manner
and only be used and disclosed for purposes properly understood and
agreed to by data subjects. Any personal data collected must be
adequate, kept up to date and should not be retained for longer
than is necessary to fulfil the collection purposes. Importantly,
the DPA provides a standard framework for both public and private
entities in the management of the personal data they use.
Internationally active organisations will find many similarities
between the DPA and data protection laws of other jurisdictions
where they are active but there are some key differences. The DPA
provides a lighter touch approach to data protection regulation
than other jurisdictions in the region.
4.2 Do your data privacy laws apply to organisations
established outside of your jurisdiction? Do your data privacy laws
restrict international transfers of data?
The DPA applies to any persons established in the BVI, and
persons not established in BVI but who use equipment in the BVI to
process personal data, otherwise than for the purpose of transit
through the BVI. For these purposes, all entities incorporated in
the BVI will be treated as “established in the BVI”,
alongside partnerships and other incorporated entities formed under
BVI laws, persons who are physically in the BVI for 180 or more
days in any year, and persons who maintain an office, branch agency
or regular professional practice in the BVI.
The DPA will restrict data controllers from transferring personal
data outside of the BVI without adequate safeguards or consent from
4.3 Please briefly describe the sanctions that apply for
failing to comply with your data privacy laws.
The DPA prescribes fines against bodies
corporate of up to US$250,000 on summary conviction and up to
US$500,000 on indictment. Where an offence is committed under the
DPA by a body corporate, but with the consent or connivance, or
which is attributable to the negligence, of any director, manager,
secretary or other similar officer, that person may be proceeded
against in their individual capacity, and may face fines of up to
US$100,000 and/or imprisonment up to five years on indictment.
4.4 Does your jurisdiction have cyber security laws or
regulations that may apply to fintech businesses operating in your
The DPA (see question 4.1) includes requirements on the
protection of personal data from any loss, misuse, modification,
unauthorised or accidental access or disclosure, alteration or
destruction, and ensuring adequate measures are in place to ensure
the safety of such personal data.
The Computer Misuse and Cybercrime Act, 2014 (as amended)
criminalises, among other things, unauthorised access to and use of
computer materials, and was amended in 2019 to include offences
relating to electronic defamation, forgery and fraud and sending
offensive messages through a computer and spoofing.
Licensees under those regulations listed in question 3.1 and who
rely heavily on technology infrastructure will be expected by the
regulator to have robust IT security systems, and may be required
to undertake security audits.
4.5 Please describe any AML and other financial crime
requirements that may apply to fintech businesses in your
All BVI-incorporated entities are subject to the BVI Proceeds of
Criminal Conduct Act, 1997 (as amended), which sets out the
principal money laundering offences, including possessing proceeds
of crime, assisting another to facilitate the concealment of
proceeds of crime, failing to report suspicious activities and
Certain “relevant” businesses (which would include,
for instance, entities caught within the BVI financial services
regulations listed at question 3.1 and other entities thought to be
at a higher risk of money laundering) are further subject to the
BVI Anti-Money Laundering Regulations, 2008, and the Anti- Money
Laundering and Terrorist Financing Code of Practice, 2008 (each as
amended), which prescribe certain identification, record-keeping
and internal control procedures for such businesses.
Whilst the BVI has not yet enacted the FATF’s
recommendations for a risk-based approach to digital assets and
service providers, we expect that the upcoming virtual asset
legislation (see question 3.2) will result in virtual asset service
providers (as such term is defined by the FATF) being brought
inside the scope of the BVI Anti-Money Laundering Regulations,
2008, and the Anti-Money Laundering and Terrorist Financing Code of
Practice, 2008, and being required to comply with the
identification, record-keeping and internal control procedures
4.6 Are there any other regulatory regimes that may
apply to fintech businesses operating in your
In addition to those financial regulations discussed above (see
question 3.1), upcoming virtual asset legislation (see question
3.2), economic substance requirements (see question 6.4) and data
protection legislation (see question 4.2), fintech businesses
operating from the BVI will need to comply with general corporate
and criminal legislation and consumer protection legislation.
5. ACCESSING TALENT
5.1 In broad terms, what is the legal framework around
the hiring and dismissal of staff in your jurisdiction? Are there
any particularly onerous requirements or restrictions that are
frequently encountered by businesses?
The majority of entities incorporated within the BVI operate
outside of the territory, without staff physically in the
jurisdiction. Where entities do wish to have staff within the BVI,
the primary restrictions are the protections in place for the
interests of BVI “belongers”, being, in simple terms,
persons with BVI ancestry or who are granted belongership through
marriage or residence. Nonetheless, for the financial services and
fintech sectors, the labour market has been supplemented with a
large number of non-BVI nationals.
If a business, whether BVI-incorporated or otherwise, wished to
hire staff within the BVI, they would generally be required to
obtain a trade licence under the Business, Professions and Trade
Licences Act, 1989. There are varying requirements under such Act
for obtaining a trade licence, depending on the business concerned.
There are proposals to reform the trade licence procedure, which,
it is hoped, will speed up and clarify the process. Under the
current Act, businesses licensed under certain financial services
legislation (see question 3.1) are exempt from a requirement to
obtain a trade licence.
The BVI Labour Code contains certain restrictions on dismissal
of staff in the territory.
5.2 What, if any, mandatory employment benefits must be
provided to staff?
The BVI Labour Code outlines certain mandatory requirements as
to notice period, maternity leave, vacation leave and termination
of employment for staff within the territory. Compared to other
jurisdictions, the BVI is not generally prescriptive of mandatory
benefits. However, commercially agreed benefits (for instance,
regarding pension plans, health insurance and increased maternity
leave) are common.
Employees within the BVI will be subject to payroll tax of
between 10 and 14 per cent (8 per cent of which is paid by the
employee, and the remainder paid by the employer) on remuneration
(including severance pay, bonuses and money paid under any
profit-sharing scheme) for services rendered wholly or mainly in
the BVI. Contributions will also be required for social security
and national health insurance.
5.3 What, if any, hurdles must businesses overcome to
bring employees from outside your jurisdiction into your
jurisdiction? Is there a special route for obtaining permission for
individuals who wish to work for fintech businesses?
Once a trade licence is obtained or an exemption is obtained
(see question 5.1), a work permit must be obtained for any
employees being brought into the BVI from other jurisdictions from
the BVI Labour Department. Prior to employing any person from
outside the territory, companies must advertise the position to BVI
belongers (see question 5.1), and give preference thereto where a
belonger candidate is qualified for the position. Work permits are
typically issued for a one-year period, and a fee applies based on
the salary of the employee.
In addition to work permits, visas may be required depending on
the residency of the visitor. There are currently no visa
requirements for persons from, among other places, the United
States, the United Kingdom, Canada and most EU Member States.
Employers should be further mindful of any border closures,
restrictions or quarantine requirements in place in response to the
There is no currently no special route for obtaining permission
for individuals who wish to work for a fintech business.
6.1 Please briefly describe how innovations and
inventions are protected in your jurisdiction.
Protection of intellectual property (IP) in the BVI is based
upon the United Kingdom. Prior to the BVI’s Trademarks Act,
2013 and Trademarks Rules, 2015 coming into effect, BVI trademark
legislation recognised trademark registration for goods and for
services only if already registered in the UK. Legislative reform
means that the direct registration of service marks without an
existing UK registration is now possible, and that the BVI’s
classification system is now aligned with the Nice
The BVI Patents Act provides for local patent applications and
applications to extend rights under a UK registration. In practice,
only existing UK registered patents will be registered in the BVI,
and such patents will be valid for the same period as specified on
the underlying UK registration on which it is based.
Copyright protection in the BVI is based on the United
Kingdom’s Copyright Act of 1956, which was extended to the
BVI by the Copyright (Virgin Islands) Order 1962 (with certain
amendments). The BVI does not have its own copyright registry and
it is not possible to formally register copyright in the BVI.
For trade secrets, rules on confidentiality fall back on English
common law duties, further described in question 4.1.
6.2 Please briefly describe how ownership of IP operates
in your jurisdiction.
Please refer to question 6.1 above.
6.3 In order to protect or enforce IP rights in your
jurisdiction, do you need to own local/national rights or are you
able to enforce other rights (for example, do any treaties or
multi-jurisdictional rights apply)?
The BVI is not a party to the Madrid Protocol and persons may
only commence infringement proceedings in the BVI in relation to
BVI registered trademarks or re-registered patents.
6.4 How do you exploit/monetise IP in your jurisdiction
and are there any particular rules or restrictions regarding such
IP rights can be monetised or utilised through assignment or
licensing, and can be used as collateral for debt financing. Where
trademarks are registered in the BVI, assignment can be registered
on the register of trademarks. Where IP of a BVI company is used as
collateral, such security interests must be registered in the
internal registers of that BVI company and, optionally, in order to
protect the priority of charges, can be registered publicly with
the BVI Registrar of Corporate Affairs.
In 2019, the BVI enacted the Economic Substance (Companies and
Limited Partnerships) Act, 2018 (as amended), which requires
certain businesses to establish a level of physical substance
within the BVI. Where a BVI tax resident entity derives income from
IP it holds, such entity will fall within the economic substance
requirements. Income includes royalties, capital gains on sale,
income from licensing and income from franchising agreements,
provided such income is separately identifiable from any income
generated from any tangible asset in which the right subsists.
IP holding entities that are within scope of the economic
substance requirements are required to direct and manage their
“core income generating activities” from physically
within the BVI and to ensure they have adequate staff physically
present in the BVI in physical offices, adequate expenditure in the
BVI, and, where the IP business requires the use of specific
equipment, that such equipment is located in the BVI.
Where entities: (i) acquired their IP assets from an affiliate
or in consideration for funding research and development by another
person situated in a country or territory other than the BVI; and
(ii) license their IP assets to one or more affiliates, or
otherwise generate income from the asset in consequence of
activities (such as facilitating sale agreements) performed by
foreign affiliates, such entities will be deemed to be “high
risk”, and will be subject to a presumption of non-compliance
and higher penalties.
This chapter was first published in The International
Comparative Legal Guide to Fintech Laws and Regulation 2022 –
British Virgin Islands, by Global Legal Group, London.
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.