Estate Planning: How to structure it without exceeding the limits of legality?

In collaboration with Leticia De Marchi , from Aurora Corporate Services.

There is a type of company that doesn't pay income tax on its own profits. It doesn't pay capital gains tax. It doesn't pay the equivalent of inheritance tax when the owner dies. And it's not fraud, it's not tax evasion, it's not a grey area.

It is a BVI Business Company , a company incorporated in the British Virgin Islands.

The absence of these three taxes is not a loophole. It is a deliberate public policy design.

The absence of these three taxes is not a loophole. It is a deliberate public policy design of a territory that has decided to compete for international capital by offering fiscal neutrality, and in return charges annual registration and maintenance fees. The model is old, but it remains the most widely used in the world for structuring international wealth, families, funds, and corporate holdings.

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What has changed in recent years?

Until recently, simply registering the company was enough. Today, that's no longer sufficient.

Since 2019, BVI has operated under the The Economic Substance (Companies and Limited Partnerships) Act was created to address OECD and European Union requirements against structures that generate income without any real activity in the territory. The law was expanded in 2021 to also cover partnerships without their own legal personality.

In practice, this means that a BVI Company engaged in "relevant activity"—such as holding companies, intra-group financing, fund management, or other categories listed in the law—must demonstrate a minimum real presence if it is tax resident in the BVI: management exercised in the territory, documented board meetings, and resources adequate to the declared activity.

The good news for those who use the structure for its most common purpose, A pure asset holding company, without active operations , is what the law itself provides for, a reduced substance regime for "Pure equity holding companies" is the lowest level of requirement within the system, but it still requires an annual report submitted by the registered agent.

The message is simple: the era of the company that exists only on paper is over. The one that survives is the one that can demonstrate purpose.

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The Instrument Few Know About: the Declaration of Trust

A BVI Company handles ownership issues. It does not, on its own, handle succession.

That's where a discreet instrument comes in, one that is rarely discussed outside of technical circles, but is structurally crucial: the Declaration of Trust (DOT) .

A DOT (Declaration of Transfer of Ownership) is a private document by which the formal owner of an asset—such as shares in a holding company—declares that they hold those shares for the benefit of another person. It separates, in a single instrument, legal ownership (who appears as the owner to third parties) from economic ownership (who actually benefits from the asset).

In practice, this allows for something that is of direct interest to families and founders: organizing who receives what, in what proportion, and under what conditions—without formal transfer of ownership, without depending on probate, and with considerable design freedom within the instrument.

Compared to a traditional discretionary trust, a DOT is usually simpler to set up and cheaper to maintain.

Compared to a traditional discretionary trust, a DOT is usually simpler to establish and cheaper to maintain, but it requires technically careful drafting because its enforceability against third parties and its succession effectiveness depend entirely on how it was drafted.

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The Pattern That Became Established

The combination BVI Company + Declaration of Trust It's not exotic. It's the basic arrangement that underpins much of international asset structuring today—not because it's the only possible path, but because it resolves, with relative simplicity, questions that every family with international assets eventually needs to answer: where formal ownership should reside, and how to ensure it reaches the right people, without relying on a judicial process.

This article is a collaboration between Gabriel Joseph Levi [Intrust Associates] and Leticia De Marchi , from Aurora BVI.

This article is for informational purposes only and does not constitute legal, tax, or investment advice. Tax implications should be assessed on a case-by-case basis.

Sources: BVI Business Companies Act (2004, as amended); BVI Economic Substance (Companies and Limited Partnerships) Act 2018, as amended in 2021; BVI International Tax Authority; Law No. 14,754/2023, articles 5, 8 and 9; RFB Normative Instruction No. 2,180/2024.