The BVI- The Choice for Global Business in Asia

THE BVIThe Choice for Global Business in Asia

Message From Premier And Minister For Finance

Hon. Dr. Natalio Wheatley Premier of the British Virgin Islands

To Our Esteemed Partners in China and the Asia-Pacific Region, For over four decades, the British Virgin Islands (BVI) has proudly facilitated international financial services, developing deep and enduring connections with our valued clients across Asia. This region has consistently been integral to our business, comprising over half of our global clientele and activities. The trust and confidence you place in our services reinforce our commitment to excellence and drive us to continually enhance our offerings.

As a jurisdiction committed to high regulatory standards, the BVI is dedicated to the integrity and security of our financial services. We have established a comprehensive approach to combating financial crime, continually updating our regulatory framework to meet international standards. This proactive approach ensures compliance and promotes good practices in anti-money laundering and counter-financing of terrorism efforts.

The BVI’s unmatched corporate structure and legal framework are expertly designed to meet the demands of global business, making us a top choice for businesses and investors worldwide. We are not just a hub for international business and finance; we offer solid regulation, security, confidentiality, and superior service.

In line with emerging trends, we are strategically positioning the BVI to become a hub for the virtual assets sector. This careful approach ensures that we stay at the forefront of technological advancements while maintaining our high standards.

Also, our commitment to sustainability remains strong, though we are cautiously moving into sustainable finance, ensuring that potential initiatives in areas, such as green and blue finance are both thoughtful and practical, aligning with our long-term economic goals.

Despite the shifting global economic landscape and regulations, our mission remains unchanged. We are dedicated to maintaining the competitive edge and high-quality service you have come to expect from the BVI. The challenges we face are not roadblocks, but catalysts for innovation and resilience.

As we look toward the future, the BVI Asia Trade Mission is an opportunity to reinforce our relationships and forge new partnerships. We are eager to discuss how we can support your evolving needs and continue our joint path to success.

Let us build on the solid foundation of our past achievements and continue to thrive together. I thank you for your trust, partnership, and the opportunity to grow alongside you.

Message From Deputy Premier And Minister For Financial Services, Labour And Trade

Hon. Lorna Smith, OBE Deputy Premier

The value the BVI places on its friendship and partnership with Mainland China, Hong Kong, Singapore and the other nations of Asia cannot be overestimated. Asia, and especially China is our dominant partner, and we are proud of the success of that relationship.

We share the commitment to trade and cross border collaboration that are in such evidence when we speak to business and government leaders here and I am pleased to say that the BVI remains at the forefront of international corporate structuring for cross border transactions, providing access to market-leading expertise and products in critical areas.

As a result of this success, several major businesses listed in Hong Kong, New York and London now utilise BVI vehicles to support international investment activity. In addition, a large percentage of the entities listed on the stock exchanges in Asia have BVI entities as part of their corporate structure.

Over recent years, there is no doubt that the world has faced significant challenges. But in such times, businesses and individuals seek certainty and stability. I am proud that clients trust our international business and finance centre. Indeed, the retention rates of BVI companies have over recent years increased and we have seen many develop from start-up status to become global blue chips.

In fact, since the establishment of the BVI business company, over one million companies have been incorporated with more than 40% originating from China alone and we mediate around US$638 billion of investment related to Mainland China, Hong Kong and Macau.

Throughout this period, the British Virgin Islands has maintained its reputation for providing cost-effective fund structures, commercial and legal certainty, a stable financial services infrastructure, creditor friendliness and a statutory infrastructure respected by international regulators and standard setters.

This is evidenced by the volume of investment we now facilitate and to provide context, as of the end of 2022, BVI Business Companies held around $1.4 trillion in assets, the equivalent of 1.5% of global GDP.

The BVI’s reputation for cutting-edge financial services product design and agility has ensured that we have remained a premier destination for business and investment across the region.

This innovation, especially in FinTech has led to an explosion of interest and the British Virgin Islands is now one of the top destinations for digital assets activity.

The sector is now our fastest growing and we have ensured that our regulatory regime has kept pace to encourage its development. To achieve this, in February 2023, we enacted the Virtual Assets Service Providers Act (VASPA) which has created the legal framework for the registration and supervision of all virtual asset service providers. Since the establishment of the VASPA, we have received over eighty applications and in March of this year, the FSC approved the first tranche, with more to follow.

The BVI’s attributes, such as a familiar legal system based on English common law and internationally compliant regulations, make us an especially attractive jurisdiction not only for businesses, but also for individuals looking to manage their wealth or create appropriate vehicles for succession planning. I believe that Chinese and Asian businesses seeking to incorporate, invest overseas, or engage in M&A activity will find in the BVI a jurisdiction that can meet all their needs.

Cross border trade is as old as civilisation, and we believe that only in this way can all countries achieve economic success. The BVI is Asia’s conduit to facilitate cross border trade and investment and we hope to continue to be your international partner of choice.

GOING FOR GLOBAL GROWTH:

WHY CHOOSE THE BVI

The British Virgin Islands (BVI) excels as a premier jurisdiction for international business and financial services, boasting a sophisticated legal framework and comprehensive corporate services. Renowned for its capacity to facilitate cross-border trade, investment, and business, the BVI has become the destination of choice not just in Asia but globally.

Driving Global Prosperity

A report by Pragmatix Advisory, “Beyond Globalisation: The British Virgin Islands’ contribution to global prosperity in an uncertain world,” casts light on the BVI’s extensive economic contributions. It supports an impressive 2.3 million jobs worldwide and generates an estimated US$13.8 billion in tax revenues annually.

The BVI’s Appeal in Asia

Favored for cross-border business, the BVI Business Company is a trusted and reliable entity, with 370,000 active companies holding assets worth approximately US$1.4 trillion. Predominantly, these companies’ ultimate beneficial owners are located in Asia, accounting for 57 percent of the BVI’s financial services business. In this region alone, the BVI underpins 1.16 million jobs, enables US$638 billion in investments, and brings in US$2.8 billion in tax revenues.

The BVI significantly contributes to the development of emerging economies by navigating liquidity, political risks, and foreign exchange challenges. Its legal and regulatory stature is grounded in English common law and is enhanced by its renowned Commercial Court and International Arbitration Centre.

Serving as a neutral ground for pooling funds from various sources, the BVI minimizes investment risks for private international investors, affirming its status as a desirable hub for cross-border investment.

Unmatched

With its unmatched corporate structure, the BVI cements its role as a global leader in international business and finance. It is recognized as a key player in supporting significant emerging markets, particularly along the Belt and Road, through its reliable, efficient jurisdiction that enables investors to mitigate risks. The BVI’s continued leadership in driving global prosperity confirms its position as the foremost choice for cross-border trade, investment, and business, underscoring its importance in the dynamic world of international commerce.

UNLOCKING GLOBAL POTENTIAL: BVI’S EDGE FOR ASIAN BUSINESS

SPEED

The BVI is home to a state of-the-art corporate registry, which allow companies to be established in a matter of days. This is subject to meeting strict due diligence and know your customer (KYC) requirements in line with global standards.

CONFIDENTIALITY

Although safeguards exist to prevent abuse of corporate confidentiality with regard to money laundering and international crime, including tax evasion, law-abiding companies can do business in the BVI with the confidence of privacy.

CORPORATE AGILITY

Company law in the BVI is designed to provide maximum agility. Under a modern, flexible and commercially minded system, companies are permitted to undertake any lawful act or activity, consistent with common law legal systems.

EXCHANGE LISTINGS

BVI companies list on exchanges around the world, including AIM in London, NASDAQ, the New York Stock Exchange, the Toronto Stock Exchange and the Hong Kong Stock Exchange among others. The BVI therefore can be a channel for projects in Asia to access substantial international private capital.

CROSS BORDER M&A TRANSACTIONS AND INVESTMENTS

BVI companies operate efficiently and are frequently used to structure transactions. A BVI company may merge with one or more BVI companies in a foreign jurisdiction, providing great flexibility in structuring mergers and acquisitions and cross border transactions.

SHAREHOLDER RIGHTS

The BVI’s well-regarded Commercial Court is effective in helping shareholders seek relief against investors, directors or other shareholders. The BVI Business Companies Act offers flexibility for shareholder rights, including, among others, the right to an equal share of dividends paid, and the right to an equal share for distribution of surplus assets of the company. The BVI Court compares favourably with courts in other jurisdictions and is regarded as not only fair but efficient.

COST

BVI companies are cost-effective compared to other premium jurisdictions. Regulatory fees – on formation and annually – are also competitive.

BVI: THE BVI IDEAL VEHICLE FOR TRANSACTION STRUCTURING ALONG THE BELT AND ROAD

The BVI remains a leader in international corporate structuring for cross-border transactions and investments worldwide. Its appeal stems from attributes like a familiar legal system based on English common law, compliance with international regulations, and tax neutrality. These qualities make the BVI particularly attractive for global capital pooling and investment in markets where legal and political risks might deter investment.

The Belt and Road Initiative (BRI), initiated by Chinese President Xi Jinping in 2013, seeks to bolster trade and connectivity across Asia, Europe, and Africa through substantial infrastructure projects. It has led to the signing of over 200 BRI cooperation agreements with more than 150 countries and 30 international organizations, involving the development or enhancement of roads, ports, railways, and digital infrastructure. President Xi has lauded the initiative’s decade-long achievements, stating, “Over these 10 years, we have endeavored to build a global network of connectivity consisting of economic corridors, international transportation routes, and information highways.” With BRI spending surpassing $1 trillion, China has emerged as the world’s premier creditor.

The initiative’s expansive reach saw over 100 BRI agreements signed in the first half of 2023 alone, marking a 20 percent increase from the previous year. President Xi celebrated the initiative’s shared global benefits, proclaiming, “Belt and Road cooperation was proposed by China, but its benefits and opportunities are for the world to share.”

Contributing to nearly 40 percent of the global GDP, countries along the Belt and Road have become central to what economists deem the most pivotal macro-economic project of our time.

Serving as a strategic locale for joint ventures, mergers and acquisitions, project finance, and the creation of private equity funds, the BVI showcases its adaptability and expertise in managing complex transactions across diverse sectors, such as oil and natural gas, petrochemicals, metals, manufacturing, and electronics. Its reputation for reliability and robust regulation has fueled a global demand for BVI structures. Particularly in Asia, there exists a broad spectrum of experienced and highly skilled professionals proficient in navigating the legal and financial aspects of working with BVI structures, further affirming the BVI’s preferred status as the choice for international business dealings.

BVI BUSINESS COMPANIES

ON THE BRI

BVI business companies can be employed for a range of uses, can be flexible in their specific structure, and are stable because of their grounding in English common law. The examples below illustrate how BVI structures have been used in a variety of transactions.

BVI BUSINESS COMPANIES IN PRACTICE

A group of international investors identifies an infrastructure developer that needs capital for a series of projects. They set up an international business company in the BVI as a holding structure and deposit the money, supplementing it with bank loans. The funds are then routed to the developer and the projects get up and running. Profit travels back to the BVI structure in the form of dividend payments that are distributed among the investors.

Below is a graphic illustration of how a BVI business company can be structured.

CASE STUDY 1 RESTRUCTURING

Demonstrating the BVI’s strong connection with Asian transactions, Sunac China Holdings Ltd effectively restructured it’s $10.2 billion offshore debt. This represents the most substantial debt restructuring undertaken by a real estate company from the People’s Republic of China thus far. BVI Business companies are often utilized as Real Estate holding and trading vehicles across the world.

CASE STUDY 2

CAPITAL AND FUNDING

A BVI company serves as an effective tool for capital raising in major financial centers like Hong Kong, London, and New York, owing to its adaptability to comply with the regulatory demands of key stock markets. This is facilitated by the absence of specific securities laws in the BVI, allowing the company to simply adhere to the regulations of the chosen market.

BVI FUNDS: MADE FOR ENTERPRISING FUND MANAGERS IN ASIA

The BVI stand out in the global financial landscape, with approximately onefourth of all offshore hedge funds selecting it as their domicile. This remarkable statistic underscores the BVI’s prominence as a leading destination for hedge funds, especially appealing to the Asian markets.

The BVI’s sophisticated and flexible regulatory environment, administered by the FSC, ensures that all funds, whether mainstream or niche, receive the oversight and support necessary to thrive. This comprehensive and adaptable framework makes the BVI a highly appealing and suitable home for a wide range of investment fund activities, from nascent fund managers to large, established institutions. The recognition and trust in BVI structures across the international community further bolster its standing as a leading domicile for diverse investment fund operations.

BVI Investment Funds:

Incubator Funds:

Tailored for start-up managers, these funds limit costs while building a long-term viable track record. Key features include a maximum of 20 investors, a minimum initial investment of $20,000, and net assets up to $20 million. These funds operate without heavy regulatory requirements, including no need for an offering memorandum or licensed investment manager.

Approved Funds:

Ideal for small hedge fund managers, these funds offer a cost-effective structure with a maximum of 20 investors and net assets up to $100 million, without a minimum investment requirement or term limit.

Professional Funds:

Catering exclusively to professional investors, with a minimum initial investment of $100,000 per investor.

Private Funds:

Designed for exclusivity, limiting to either 50 investors or private subscriptions only.

Public Funds:

BVI Public Funds are retail-focused, highly regulated investment vehicles with no restrictions on assets, strategies, or investor count, requiring a full suite of global service providers and a detailed, director-approved prospectus.

Private Investment Funds :

Catering to an exclusive investor base, BVI Private Investment Funds (closed-ended) are limited to 50 investors or are accessible only through private marketing. They require investors to have a minimum net worth of US $1 million and a minimum investment of US $100,000.

DISPUTE RESOLUTION

The BVI boasts a legal system combining locally enacted legislation and BVI common law precedent. Influenced by the judicial decisions of England, Wales, and Commonwealth countries, these laws hold persuasive authority in the BVI.

The Commercial Court

Within the Eastern Caribbean Supreme Court system, the BVI’s High Court, including its Commercial Division (Commercial Court), serves as the first instance for civil matters. This Commercial Court, primarily handles complex international disputes, enhancing the BVI’s profile in the financial services industry. Appeals from the High Court proceed to the Eastern Caribbean Court of Appeal, and further appeals can be made to the Privy Council in London.

The BVI Commercial Court is well-regarded and operates efficiently. It deals with matters expeditiously, economically, and proportionately. The Court handles complex cases related to insolvency, trust, business arrangements, and other commercial matters. Specifically, it hears claims of more than $500,000.

International Arbitration Centre

The British Virgin Islands International Arbitration Centre (BVI IAC) is an independent institution dedicated to providing a neutral, impartial venue for international arbitration. Established to address the growing demand for alternative dispute resolution services in the Caribbean and beyond, the Centre offers a modern, state-ofthe-art facility designed to accommodate various arbitration needs. The Centre is ideally positioned to serve the international business community, leveraging the BVIs' status as a leading offshore International financial center.

The BVI IAC operates under a comprehensive legal framework that supports and facilitates the effective enforcement of arbitration agreements and awards, consistent with international standards. It adopts the UNCITRAL Model Law on International Commercial Arbitration, ensuring that its procedures meet global best practices. The Centre offers a wide range of services, including the administration of arbitrations, mediation, and other forms of dispute resolution. Its panel of arbitrators includes experienced professionals from around the world, chosen for their expertise in various fields of law and arbitration. This ensures that parties have access to high-quality, efficient, and tailored dispute resolution services.

BVI –THE HUB FOR DIGITAL ASSETS

Where Certainty Meets Predictability and Speed

In the dynamic world of virtual assets, the BVI shines as a hub of stability and prosperity. Our dedication to fostering an environment ripe for Fintech innovation has positioned us at the forefront of the global cryptocurrency market. Renowned for high trading volumes, the BVI demonstrates the success of its nurturing ecosystem for virtual asset ventures.

A Business-Friendly Climate for Fintech Growth

Launching and expanding your Fintech enterprise in the BVI has never been more seamless. Our jurisdiction offers:

• A robust economic platform, ensuring the resilience and growth of your financial projects.

• A legal system grounded in English Common Law, providing a reliable and familiar operational base.

• A secure and transparent judicial system, protecting and propelling your business interests.

Embrace the BVI Advantage –

The Regulatory Safe Harbour for Fintech Pioneers

Since February 1, 2023, the BVI has enforced a comprehensive regulatory framework aligning with international standards. Position your business in the BVI’s regulatory safe harbour – a prime choice for Fintech innovation.

Cultivating the BVI Fintech Ecosystem

The BVI is rapidly becoming a cornerstone of the global Fintech landscape. Our initiatives include:

• The Virtual Assets Service Providers Act, effective from February 1,2023.

• Collaborations with the private sector, aiding Fintech startups through the Digital Assets Working Advisory Group.

Resulting from these initiatives, the BVI Fintech sector is flourishing, with companies specializing in:

• Digital asset-focused funds, including blockchain enterprises.

• Token issuance for cryptocurrencies or blockchain business funding.

• Digital asset exchanges, both centralized and decentralized (DEX).

• NFT platform development. And;

• Tokenisation Platforms

Supported by professional service providers (law firms, accountants, auditors), these Fintech companies benefit from comprehensive services including regulatory guidance, business establishment support, and financial auditing.

WHY ASIA’S WEALTHY VALUE THE BVI

The BVI Edge: Expertise in Trusts and Strategic Wealth Planning

Asian investors can utilise the trust- related offerings of the BVI to develop succession planning and secure asset protection through Virgin Islands Special Trust Act (VISTA) Trusts and Private Trust Companies (PTCs). These services also make the jurisdiction attractive to family offices in Singapore, Hong Kong and on mainland China.

When considering a structure that enables a client to protect their assets, structure their wealth or plan for future generations, it is hard to look past the concept of a trust. The trust concept is well recognised and is tried and tested. Trusts are powerful and flexible tools that are scalable and can be drafted to meet the individual circumstances of a particular client. What attributes does a trust have that allows it to achieve a client’s objective?

Privacy

assets are held in the trustee’s name, while the identity and interests of the beneficiaries are confidential.

Preservation of Wealth

A trust may be used to preserve the continuation of certain assets, such as a property or business, within a family.

Implementation of a Required Savings Plan

A trust can help with retirement, health and welfare or education

A trust, correctly set up, can protect assets from claims from creditors to the extent by permitted by law

A trust is an ideal way to place all of your assets under one holding structure. Often a client will have a number of companies, all of which will be held under a single trust structure

Succession Planning

A trust is an effective tool to deal with succession planning for your family, friends and charities, an avoids the need for probate on death.

Asset Protection

Asset Consolidation

The Virgin Islands Special Trusts Act (VISTA) is unique to the British Virgin Islands and has become very popular since it was introduced.

A traditional trust places a fiduciary duty on the trustee to ensure that the trust assets are protected and enhanced during the life of the trust. Generally, the trust assets are invested through a BVI company. The trustees take control of the company so that they can oversee the management of the assets and ensure that they follow the “prudent investor rule.”

The rule may cause a trustee to act conservatively during their stewardship of the trust assets. The resulting vigilance by the trustee may incur additional costs in both time and money.

ADVANTAGES OF VISTA TRUSTS

The VISTA Trust removes the trustee’s obligation to the prudent investor rule and therefore the trustee has no obligation to oversee management of the underlying company.

The standard VISTA Trust can be established for up to 360 years.

It is possible to add shares from an existing BVI trust to a VISTA Trust, so that the shares become subject to VISTA legislation

WHO USES VISTA TRUSTS?

People with family owned businesses (especially for a sole director/shareholder) who wish to run their company independently as well as benefit from a trust’s estate planning ability.

PRIVATE TRUST COMPANIES

A private trust company (PTC) is a company incorporated in the BVI that will have a limited business purpose to act as a trustee for a specific trust or a related group of trusts.

The Financial Services (Exemptions) Regulations 2007 exempt a PTC from regulation and licensing under the Banks and Trust Companies Act 1990, provided the PTC carries on either unremunerated trust business or related trust business and no other business.

Attributes of Private Trust Companies include:

CONTROL

Settlors of trusts may be reluctant to relinquish complete control over and involvement with the assets settled into trust. Where tax and other considerations permit, a settlor and his or her family may retain a certain degree of control and involvement without prejudicing the legal validity of the trust structure.

FLEXIBILITY

A PTC may be tailored to suit the settlor’s intentions and the scope of its role, and powers as trustee can be fine-tuned accordingly. In particular, use of a PTC will be designed to co-ordinate administration with the family’s independent investment advisors and any family office, thus streamlining and simplifying administration.

COST EFFECTIVENESS

The annual fees of institutional trustees are often calculated on an ad valorem basis and can be considerable where assets of significant value are placed in trust. By comparison, the costs of incorporating and running a PTC can be subject to client control and may be less expensive for large trusts.

FAMILY OFFICES

Family offices in Asia are on the rise. Asian families are increasingly seeking to centralise the management of their assets, provide for continuity of the family business and ensure preservation of wealth.

Family office structures include fund managers who want to run their own private funds, fund managers who are being seeded by one or more families to set up private structures, as well as wealthy patriarchs (and indeed a new generation of young wealthy businessmen and entrepreneurs) who wish to provide a legacy and, increasingly a structure to involve members of the family in the running of the business.

A BVI VISTA Trust is ideally suited to be used by family offices in Asia, which are located predominantly in Hong Kong and Singapore, to hold shares in the underlying family business.

Unlike in a traditional trust structure, where the trustee has a duty to oversee the operation of a company owned as part of the trust fund, these trusts can allow for the company directors to be left running the company without interference from the trustee. This means that the settlor can control the business himself during his lifetime (perhaps with input from other family members), with provision made for other persons to run it after his/her death.

ROBUST NETWORK OF GLOBAL PRACTITIONERS

The BVI works with a group of outstanding, experienced and trusted BVI practitioners who make up the specialist team in Asia. These practitioners come from the world’s leading corporate firms, trust companies, law firms and accounting firms, as well as others involved in the financial services sector. Having helped clients do business in the BVI for over 40 years, they are market experts when it comes to understanding the BVI and the wealth needs of clients in Asia. Based in Hong Kong SAR, Singapore, Mainland China, India and other economic hubs, they are able to answer questions in real-time and provide tailored, customised services to help clients manage and preserve their globally diversified assets.

The BVI is also proud to have a robust network of experienced, trusted advisors based around the world. They offer a sophisticated array of corporate services, in addition to diverse wealth management solutions in trust and estate planning, funds and investment business, captive insurance and ship registration services.

Leading industry practitioners have based their operations in the BVI because of the foundations underpinning the BVI’s success: a mature regulatory infrastructure, a well-developed financial services industry, and a flexible, creditor-friendly jurisdiction.

BVI Finance is the voice of the British Virgin Islands’ financial services industry; marketing and promoting its products and services, as well as managing and maintaining its excellent reputation as a premier international business and finance centre. BVI Finance maintains a strong relationship with key stakeholders including the Government and its many partners in the BVI, across Asia, and globally.

For more information, contact:

BVI FINANCE

3rd Floor, Cutlass Tower

Road Town, Tortola,

British Virgin Islands

Telephone: (284) 542-9725

Email: info@bvifinance.vg www.BVIFinance.vg

BRITISH VIRGIN ISLANDS HONG KONG OFFICE

Suite 1506, 51/F, Central Plaza 18 Harbour Road, Wan Chai, Hong Kong

Telephone: (852) 3468 8530

Email: bvihongkongoffice@bvihouseasia.com.hk www.bvihongkongoffice.com.hk/en/

MINISTRY OF FINANCIAL SERVICES, LABOUR & TRADE

2nd Floor, Romasco Place 265 Waterfront Drive Road Town, Tortola VG1110

British Virgin Islands

Telephone: (284) 468-2096

Email: mfslt@gov.vg