BVI Law and Practice Contributed by: Andrew Jowett, Patrick Gill and Jack Igglesden, Appleby
or other extraordinary circumstances) by reference to the company’s register of members (which can be maintained in a digital format). A BVI company’s con- stitutional documents will usually oblige the company to treat the holder entered on the register of members as the sole person entitled to the shares, including any voting rights and dividend payments in respect thereof. There are currently no restrictions on the use of digital assets in collateral arrangements. 1.2.2 Access to Banking There are no BVI‑specific legal or regulatory restric- tions on which banking or payment partners a VASP may use, provided AML/CFT obligations are met. Access to local banking services remains a practical challenge for many virtual asset businesses operating from the BVI. There is no prohibition on BVI‑licensed banks providing accounts to VASPs, and the Com- mission has not issued guidance restricting such relationships. However, in practice, BVI entities often encounter difficulties driven primarily by the policies of international correspondent banks, which may view virtual asset activity as carrying elevated AML/CFT and reputational risk. 1.2.3 ESG/Sustainable Finance There are currently no ESG/sustainable finance requirements that apply to digital assets in the BVI. No work is known to have been undertaken on indicators to estimate the environmental impact of digital assets or the consensus mechanism on which they rely. 1.2.4 Tax The BVI is tax neutral, with no direct taxation on com- panies and a nominal rate of income tax on individu- als, which has made it an attractive destination for technology entrepreneurs. There may, however, be tax implications for beneficial owners in their own jurisdic- tion. BVI financial institutions have been reporting under FATCA and the Common Reporting Standard (CRS) for many years, and any virtual asset business that falls within the definition of a Reporting Financial Institution must continue to meet those obligations, including
as they relate to amendments brought forward under CRS 2.0 (which has an effective implementation date in the BVI of 1 January 2026). Undoubtedly, CARF is one of the most significant global virtual asset report- ing-related developments as it enhances transparency over the transactions of crypto-asset users and the activities of reporting crypto-asset service providers. Having committed to adopt CARF, BVI-reporting cryp- to-asset service providers (CASPs) will be required to collect and report data on transactions, user identities and tax residences to the relevant tax authority. 1.2.5 Insolvency There are no specific resolution or insolvency require- ments/regimes specific to digital asset firms, and the provisions of the Insolvency Act (Revised 2020) will apply. Virtual assets held by a BVI entity in liquida- tion are treated as property of the estate available for distribution to creditors, consistent with the BVI courts’ treatment of crypto-assets as property (see 1.2.1 Property Considerations ). In practice, liquida- tors face challenges, including tracing assets across blockchains, obtaining private keys, and co-ordinating with foreign liquidators and exchanges. As discussed in 1.2.1 Property Considerations , there have been a number of recent decisions in the BVI that demonstrate the BVI courts’ ability to understand complex cryptocurrency issues but also demonstrate the desire of the Court to be at the forefront of this international area of developing law. Written judg- ment remains limited, although, by way of example, in Philip Smith and Jason Kardachi ( in their capacity as joint liquidators ) v Torque Group Holdings Limited , the BVI accepted that cryptocurrency was a form of property, and in ChainSwap v The Owner of Digital Wallet & Ors , the court permitted relief against per- sons unknown (as owners of cryptocurrency wallets). In November 2023, Justice Mangatal handed down a written judgment in BVIHCM2023 / 0239 AQF v XIO & Ors . While the names were strictly anonymised, the judgment clearly records relief being granted to an applicant in the form of a freezing order (amongst other things) against a person unknown as well as the second and third respondents “who issue and operate a well-known cryptocurrency”. In its recital of leading English authorities on the same, the court also granted certain disclosure relief and permission to serve out.
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