The legislation of the British Virgin Islands provides for a number of trusts. The applicable law is the Virgin Islands Special Trusts Act of 2003, as amended:

VISTA TRUST  

The legislation of the British Virgin Islands provides for a special type of trust - the so-called VISTA Trust (the name comes from the first letters of the names of the regulatory legal act - the Virgin Islands Special Trusts Act of 2003, as amended).

The distinctive features of this type of trust are:

• Property owned by VISTA Trust can only be transferred through shares of companies in the British Virgin Islands. VISTA Trust does not include income from the activities of these companies and other property;

• There is no mandatory requirement for a trustee to manage the company;

• The law allows the trustee to properly intervene in the management only for the purpose of solving specific problems defined in the trust agreement;

• If permitted by the Trust Management Agreement, the trustee may participate in the management process at any time and only at the special request of the owner or other authorized persons;

This tool is an extremely effective way to protect the corporate rights of the owner of the company from encroachments. On the one hand, the person who transferred the shares to trust management is no longer their owner, but on the other hand, it does not lose control over the company's operating activities. At the same time, the restriction of the right to management is exhaustively listed in the law, as well as additionally specified by a detailed trust agreement that provides reliable protection of the interests of the beneficiary company.

Summary of the main provisions of VISTA

•The company's shares owned by the VISTA Trust may be held indefinitely.

•Directors or other parties of the underlying company can manage its affairs without the intervention of the trustee.

•VISTA applies only to shares of companies in the British Virgin Islands.

•Shares held in accordance with VISTA are held in trust for their preservation.

•Despite the preservation of the trust, the trustee is authorized (in accordance with the exact terms of the trust) to dispose of shares with the consent of the directors or the founder, or any other person specified in the trust deed.

•The trustee is expressly prohibited from exercising his voting rights or other powers related to shares in order to interfere with the management of the company or conduct of business.

The founder may establish rules governing the appointment, removal from office and remuneration of directors of a company owned by VISTA trust.

According to the VISTA trust Rules, in case of the death of the founder-director, a successor director may be appointed (if the founder is a director).

 DISCRETIONARY TRUST MANAGEMENT

 A discretionary trust is a trust in which the specific shares of beneficiaries are unknown. That is, the trustee has the right, at his discretion, from time to time to decide who (if any) of the beneficiaries will benefit from the trust and to what extent. For a better understanding - in a certain trust, the rights of beneficiaries are established by the founder, trust managers do not have the right to determine the amount of payments to be paid to beneficiaries at their discretion.

In a discretionary trust, no beneficial interests are defined for any beneficiary, which may be attractive for reasons of taxation and asset protection, as well as providing great flexibility when the circumstances of discretionary beneficiaries change in the future. In the event that the trustees clearly retained the income of the trust and transferred it from year to year without paying it to the beneficiaries, the trust is discretionary.

The founder or nominee owner may periodically influence how the discretion of the Trustee is exercised by means of a letter of wishes. The mechanism for protecting the interests of the Founder is to appoint a defender in the Trust Management Agreement, usually a nominal representative of the Founder, with the authority to send a notice of the dismissal of the Trustee and the appointment of a new trustee.

Thus, the Founder and beneficiaries retain indirect powers to replace the Trustee if they are not satisfied with the performance of his duties.

This type of trust is the best solution when the founder wants a professional trustee to continue to own and manage assets on behalf of future generations and provide beneficiaries with only the financial benefit that the founder originally intended. Such trusts are the most flexible, as well as the most complex, but can provide undeniable advantages for both taxation and inheritance planning, especially in cases where the beneficiaries are minors, spendthrift or have special needs.