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How does the Economic Substance legislation affect private clients?

With the introduction of the Economic Substance legislation in the British Virgin Islands (BVI), BVI entities must now seek to understand their reporting obligations, demonstrate good corporate governance and provide evidence for substance, where applicable. 

In a recent Asian Private Banker article on how trustees can help private businesses navigate substance compliance challenges, Simon Filmer, Global Lead, Company Formation at Vistra, explains that although Vistra has yet to see any significant asset movement, clients should consider all their options before commencing business operations; for certain business activities, such as intellectual property, restructuring  may be required.

“All high-net-worth clients will need to review their offshore structures – but in many cases, they will not need to make any changes, beyond some additional reporting,” commented Simon.

In order to help clients, including private clients, determine to what extent they are affected by the economic substance legislation, Vistra recently launched its BVI Economic Substance Classification Questionnaire. 

Upon completing the questionnaire, clients will receive “a report which assists them to determine whether or not they need to establish substance in the offshore jurisdiction”, and it is an important first step in determining the next steps for a relevant entity to ensure substance compliance.

Apart from the classification questionnaire, Vistra also provides a comprehensive range of substance services for BVI and other entities, including legal opinions, full portfolio review, in-scope advisory services, as well as in-jurisdiction substance solutions. 

Read the full article on Asian Private Banker here

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