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Knowledge

Using wills to govern succession to shares in a BVI company

21 January 2025

A properly drafted will governing an individual's shares in a BVI business company reliably determines:

  • the identity of the persons who are responsible for administering the shares; and
  • the beneficiaries of the shares,

after the testator's death.  It can also considerably reduce the time and cost of administering the shares.

This briefing explains the rules applicable to the validity of wills in the British Virgin Islands where an individual is the holder of shares in a BVI business company and is domiciled outside the British Virgin Islands.

Validity of wills

A will is formally valid (and is admissible to proof) if its execution conforms with the formalities prescribed by the law of the place where:

  • it was executed; or
  • at the time of its execution or the testator's death, the testator was domiciled, habitually resident or was a national.

A share in a BVI business company (the most common form of company incorporated under British Virgin Islands law) is movable property.

For purposes of determining matters relating to title and jurisdiction, the situs of the ownership of shares of a BVI business company is in the British Virgin Islands.  When the holder of shares in a BVI business company dies, the only person who has power and authority to deal with the shares is the personal representative of the deceased shareholder.  The personal representative is the person in whose favour:

  • the Eastern Caribbean Supreme Court has granted probate or letters of administration; or
  • a court of probate in a recognised jurisdiction has granted probate or letters of administration, if that grant has been resealed by the Eastern Caribbean Supreme Court.

For more information on obtaining grants of probate and letters of administration on the death of a shareholder, see our separate briefing here.

Where a deceased shareholder leaves a will in the English language which is admissible to proof, a grant of probate may be made to the executor named in that will.

In addition, the validity of the gifts of moveable property contained in the will is governed by the testator's domicile at the time of his or her death.  A will cannot be used to avoid the forced heirship rules of the testator's domicile.

Alternative succession planning structures

Trusts

The formal and essential validity of a gift of shares in a BVI business company (and the capacity to make the gift) are determined in accordance with British Virgin Islands law.  Further, heirship rights conferred by foreign law in relation to the property of a living person shall be disregarded when determining rights of ownership of property subject to trust which is governed by British Virgin Islands law.  In other words, the gift of shares of a BVI business company to the trustee of a trust which is governed by British Virgin Islands law protects those shares from foreign forced heirship rules.

We have a number of client briefings on British Virgin Islands law governed trusts:

-      Reserved powers trusts in the British Virgin Islands;

-      Purpose trusts in the British Virgin Islands; and

-      BVI VISTA trusts.

Joint tenants

A share in a BVI business company may be held by more than one person as joint tenants.  Upon the death of the first joint holder, title to the share vests in the surviving holder.

Share classes

A BVI business company may issue more than one class of shares.  Further, shares may confer:

  • no rights or preferential rights to distributions;
  • conditional rights; and
  • voting rights or no voting rights.

In principle, a BVI business company may issue shares carrying voting rights and rights to distributions (the "A Shares") to the present shareholder (the "Parent").  Additional shares (the "B Shares") may be issued to the shareholders' children (or other intended beneficiaries) carrying voting rights and rights to distributions which are conditional upon the death of the Parent.  Upon the Parent's death, the A Shares may be cancelled and the B Shares immediately carry voting rights and rights to distributions.

Reserve director

Where a company has only one shareholder and that individual is also the sole director of the company, that sole shareholder/director may, by instrument in writing, nominate a person who is not disqualified from being a director of the company as a reserve director to act in the event of the shareholder/director's death.

If you would like any further information, please get in touch with your usual Bedell Cristin contact or one of the contacts listed.

 

 


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