- Minimum or zero tax on capital gains, incomes, profits and dividends that accrue to the Fund. This would usually allow the Fund to outperform its peers domiciled in a high-tax jurisdictio. Tax exempt status in the offshore jurisdiction enables the fund to reinvest the approximately 30% taxes on profits and gains that would otherwise be payable in high tax jurisdictions, without the need to obtain investment company or similar status. The individual investors should nevertheless remain aware of the fact that at the time when their investments are redeemed or when dividends are received from the offshore fund, such personal income may be subject to tax in their domicile country, at receipt.

- Greater operational flexibility and a lower level of regulation makes it easier to establish and administer the funds. Consequently, formation and operating costs are significantly reduced. Lower costs means funds can be offered at zero or low load and with competitive management fees from the investor's point of view. Furthermore, greater flexibility is generally available, in terms of both fund structure and the investment portfolio. Offshore investment funds have access to the widest possible variety of investment instruments and may often pursue more aggressive investment strategies than if they were registered in a "traditional" jurisdiction.

- Minimum tax on fees, commission income and profits earned by the Fund Managers, Advisors and Administrators, registered and regulated in an offshore financial centre. This may provide a competitive advantage to these professionals, for instance, by giving them an opportunity to charge lesser fees and commissions than do their competitors, who happen to be located in high-tax jurisdictions.

- No big back office operation is required, since all administration, execution and shareholder relations can be subcontracted out. By having clients invest in a fund in which they buy and hold shares rather than, for example, a discretionary managed account, all of the contract notes, advices, statements and other client transaction paperwork may be dispensed with. Investors simply receive a monthly or quarterly NAV certificate and annual or semi-annual financial statement.

When choosing BVI as an offshore financial center in which to establish and administer mutual funds, there are a number of factors to consider: