BVI Trade Mission Asia | May 2024
BVI – The Future
Leon Mao Head of Advisory Services and Managing Director, North Asia
Role
Vistra's Head of Advisory Services in Hong Kong and Shanghai, Leon Mao, brings 30 years of experience, particularly in the British Virgin Islands (BVI). As a BVI Eastern Caribbean Court Solicitor and STEP Trust and Estate Practitioner, he has honed his expertise in the BVI's private clients, family office, corporate/commercial, and funds advisory landscape.
Background
Drawing on his diverse global experience, which includes training in the West and Solicitor admissions in England and Wales, and New South Wales, Australia (both non - practicing), Leon also has formerly practiced Cayman Islands and Bermuda laws under Hong Kong registered lawyer status.
Speaker
• Evolution of BVI
• Evolution of regulatory requirements
• BVI , China and Asia Market
• BVI and SEA Market
• Future of the BVI
Overview
Enduring Prominence of the BVI
40 - year history of the BVI
Historically
The primary legislation was passed in 1984.
First major promotion of BVI companies in Asia by Vistra on 8 August 1988.
One of the initial applications of BVI companies was to serve as personal investment vehicles . BVI companies were used for account holding, and assets holding eg to hold real estate.
BVI was initially a Hong Kong phenomenon.
As China and Asia developed, the BVI Business Company became popular geographically (a common factor in China projects and structuring) and extending its range into SEA and the region.
Quite aside from popularity for simple asset holding, BVI companies prove versatile and adaptable.
Today, their applied use is in divers ified purposes including use in sophisticated structuring, joint ventures, funds and IPOs.
The trend continues with BVI companies as a common component into Asian regional growth.
Moreover, new applications have been found including as SPV for crypto funds and FinTech transactions.
Evolution of BVI regulatory requirements
Initially, light touch approach to regulatory applications for BVI companies . Changes are driven by international corporate best practice e.g. esignatures/optimised company law to be on par with other jurisdictions.
Moves towards higher transparency in the 2010s result in AEOI (CRS/FATCA)/ BEPS CbCR with beneficial ownership information sharing with governments internationally.
Further international measures specify needs for mind and management in offshore jurisdictions such as BVI. Robust solutions and reporting programs For economic substance.
Transparency initiatives reflected by UBO Registers and Annual Return process implemented.
Continu e s to proactively interpret new regulatory requirements to meet international standard s, and its approach often emulated by other offshore jurisdictions.
• BVI upholds international obligations with a strong sense of jurisdictional responsibility
• Strong cooperation and consultation between government, regulator and private sector on regulatory changes
Stable Regulatory Regime
Specialist Expertise
Flexible Structures
Feasible Investment via Reduced Costs
Avoid Double Tax
Top Reasons why BVI is a leading financial jurisdiction
Transparency and Confidentiality balance
Legal Certainty/ Access To Justice
Vistra ’s 2030 report, confirms BVI’s premier status among the offshore jurisdictions.
BVI remains the No.1 offshore jurisdiction for the last 15 years.
Importance ratings: Offshore jurisdictions
3.1 3.3 2.9 2.9 2.9 2.9 2.5 2.5 1.8 1.8 1.9 1.8 1.7 1.7 1.6 2.3 2.2 2 2.4 2.3 2.2 1.9 0 1 2 3 4 5 2016-17 2018-19 2020 2022 Average importance of jurisdiction (15 scale)
BVI Cayman Island Mauritius Seychelles Guernsey Jersey
BVI, the China and Asia Market
Preferred jurisdiction for offshore asset holding in Hong Kong, China and the Asia
Preferred in SPV structures for holding of Chinese WOFEs
Ideal offshore jurisdiction for Chinese outbound investment
Private wealth management and estate planning
Digital funds and hybrid funds
BVI and SEA Market
Utilizing the BVI for investments in most parts of SEA such as Indonesia, Malaysia, Philippines, Thailand and Vietnam etc.
BVI SPVs for SEA Focus Investments:
Enabling businesses to establish diversified supply chains
BVI provides structures such as joint tenancy and trust structures for individuals and businesses to avoid probate, ensure efficient succession planning and hold assets separately.
Ideal jurisdiction for holding Universal Life Insurance policies, especially for HNW clients
Future Directions
Indonesia, Southeast Asia’s largest and Asia’s fifth largest economy offers huge potential for the BVI.
As a growing 3.3 trillion-dollar economy of 273.5 million inhabitants, the country is undergoing infrastructure transformation, broad IT integration, and digitalization of finance.
BVI’s appeal resonates as a preferred vehicle for cross-border structuring. We will see more and more Indonesian investment entering the BVI.
BVI: A Resilient and Proven Jurisdiction for Lasting Success
The jurisdiction’s ongoing evolution and commitment to adaptability ensure its sustained attractiveness, and the following factors contribute to its promising outlook in Asia
Responsive to Emerging Trends
Public - Private Partnerships
Balanced Commerciality and Oversight
Adaptive Legal and Regulatory Framework
BVI Success Matrix - Public–Private Partnerships
BVI’s collaborative approach involves close cooperation between the government, private sector entities, and regulators to identify common goals, address challenges and implement effective regulation.
BVI House Asia presence, regional events and roadshows offer platform to promote and strengthen ties between BVI and jurisdictional end-users in Asian countries.
These platforms aim to create an environment that aims to understand and support business needs, while ensuring regulatory compliance and investor confidence in the jurisdiction.
Public - Private Partnerships
Public
BVI Success Matrix - Legal and Regulatory Framework
BVI’s legal and regulatory system is designed to be highly adaptable, allowing it to keep pace with evolving international standards and requirements, and corporate best practice.
For BVI, the door is always open. Ongoing consultation between the Government, regulator and private sector fosters a strong collaborative environment.
By staying up-to-date with international standards, the jurisdiction ensures that it remains a trusted and reliable financial center.
This instills ongoing confidence in Asian investors, end-users and institutions (such as banks and international regulators)
Adaptive Legal and Regulatory Framework
BVI Success Matrix - Balanced Commerciality and Oversight
As a core fundamental, BVI fosters a business-friendly environment and a favourable commercial climate. Equally, the BVI places great emphasis on maintaining strong regulatory oversight to promote integrity, transparency and investor protection.
The balanced approach creates a stable and secure financial ecosystem that continues to attract Asian investors.
Balanced Commerciality and Oversight
BVI Success Matrix - Responsive to Emerging Trends
To maintain its relevance and attractiveness to clients, especially in Asia, BVI continues to adapt and evolve its offerings such as funds, private wealth management, digital assets and involvement in ESG practices.
By doing so, the BVI can proactively respond to the evolving needs and priorities of its clients, and a changing world.
Responsive to Emerging Trends
What the Future Holds
BVI will continue to attract a diverse range of sustainable investments, including renewable energy projects, green infrastructure development, etc. By leveraging its expertise and implementing innovative financing mechanisms, the BVI will play a significant role in driving global sustainable development.
Sustainable Future
BVI will develop as a “super - connector” between regions.
As the BVI expands its global market reach, collaborations in emerging markets (Asia, SEA, Africa and Latin America) will be the new - normal.
BVI structuring will facilitate cross - border investments, knowledge transfer, and indirectly stimulate economic growth, becoming a vital link between investors and emerging market opportunities.
Future of BVI
Leading Digital Assets Hub
With the introduction of VASP, together with BVI’s long held foundations to establish trusted and innovative digital assets ecosystem, th e BVI will strengthen its position as a leading hub for digital assets.
Digitalization and FinTech
This means new platforms, decentralized finance solutions and innovative investment products. .
Through digitalization, the BVI will continue to adopt advanced FinTech solutions such as blockchain platforms, digital payment systems, and automated compliance tools. These innovations will boost efficiency, transparency, and security in financial transactions, attracting global fintech leaders.
BVI will serve as a pioneering testbed for transformative FinTech solutions shaping the future of the financial industry.
Global village
About Vistra
Here at Vistra, our purpose is progress.
As a close ally to our clients, our role is to remove the friction that comes from the complexity of global business.
We partner with companies and private capital managers along the corporate and private capital lifecycle.
From HR to tax and from legal entity management to regulatory compliance, we quietly fix the operational and administrative frustrations that hamper business growth.
With over 9,000 experts in more than 50 markets, we can accelerate progress, improve processes, and reduce risk, wherever your ambition takes you.
Disclaimer
The views and opinions expressed herein are those of the author and do not necessarily represent the views and opinions of Vistra . The information contained herein is of a general nature and should not be used to address the circumstances of any particular individual or entity. No one should act on such information without appropriate professional advice. No reliance should be placed on any oral remarks provided during the presentation, unless these are confirmed in writing by Vistra . Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future.
Neither Vistra nor any member or employee of Vistra undertakes responsibilities arising in any way from reliance placed on this presentation. Any reliance placed is that party’s sole responsibility.
