BRITISH VIRGIN ISLANDS Law and Practice Contributed by: Chris Duncan and Katrina Lindsay, Carey Olsen
Retail lending to BVI residents is primarily con - ducted by branches of a few major banks that are licensed under the Banks and Trust Compa - nies Act (as amended) (BTCA) and do not hold a restricted banking licence. Entities carrying on banking business (pursuant to the BTCA), financing business or money ser - vices business (pursuant to the FMSA) or oth - erwise carrying on a relevant business (as such term is defined in the AML Regs) will be required to comply with the BVI’s AML/CTF/proliferation financing regime, which may include the require - ment to verify source of funds of customers. These entities will also fall within scope of the BVI’s economic substance regime as carrying on banking business (and will be required to demonstrate substance in the BVI accordingly), subject to certain exceptions. 4.4 Syndication of Fiat Currency Loans The syndication of fiat currency loans involving BVI obligors is not uncommon. Typically, the syndication of loans takes place on a cross- border basis involving lenders and counterpar - ties overseas, where documentation is usually subject to the laws of a foreign jurisdiction and is not otherwise directly captured under current BVI regulation.
rency in any form (including electronic money, mobile money or payments of money) consti - tutes money services business and this can only be carried out upon being issued the relevant licence. 5.2 Regulation of Cross-Border Payments and Remittances If a cross-border payment is made by way of a transfer of virtual assets from one wallet or account to another, with that transfer being effected by a BVI company for and on behalf of the payor and the payee, the BVI company may be required to be registered under the VASP Act to carry out this transfer service. Cross-border payments and remittances may fall within the scope of the FMSA (as noted in 5.1 Payment Processors’ Use of Payment Rails ). 6. Marketplaces, Exchanges and Trading Platforms 6.1 Permissible Trading Platforms Providing a facility, whether by electronic means or otherwise, for the orderly trading of invest - ments or for the listing of investments for the purposes of trading is an activity that constitutes investment business for the purposes of SIBA. Conducting an exchange between virtual assets and fiat currencies, or an exchange between one or more forms of virtual assets, for and on behalf of another person constitutes a virtual assets service for the purposes of the VASP Act. Any service provider considering this service will be required to be registered under the VASP Act accordingly. 6.2 Regulation of Different Asset Classes Where an asset constitutes “virtual asset” for the purposes of the VASP Act, any person carrying
5. Payment Processors 5.1 Payment Processors’ Use of Payment Rails
Paytechs have emerged as a new subsection within the fintech industry. Although there are no restrictions on payment processors creating or implementing new payment rails, careful con - sideration will need to be given to any regulatory implications of doing so. By way of example, under the FMSA, the transmission of fiat cur -
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