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64

Legal Focus

JUNE 2012

British Virgin Islands Offshore Companies

Offshore companies have long been a popular option for businesses. However, the recent global financial crisis has led to several legislative attempts recently by governments globally, aiming to limit the benefits that are available to companies looking to take advantage of attractive features, such as favourable tax conditions, that such companies offer. To find out more about offshore companies, Lawyer Monthly speaks to Kerry Anderson, managing partner at leading British Virgin Islands law firm, O'Neal Webster. He is also a partner within the firm’s commercial department and heads the firm’s Investment Business and Regulatory team.

O

’Neal Webster has an unsurpassed track record of providing superior service to local and international clients, with particular emphasis on corporate &

finance, trusts, funds, real estate, admiralty, commercial litigation and corporate restructuring and insolvency.

What are the main benefits for companies choosing to invest in offshore jurisdictions?

One of the main benefits of choosing to invest in an offshore jurisdiction like the British Virgin Islands is its modern and flexible company legislation. BVI companies are well-suited for many different types of corporate scenarios and are often used as special purpose vehicles, as asset holding vehicles or as acquisition vehicles during takeovers. The BVI company legislation allows a great deal of flexibility in terms of meetings of members and directors, provisions for alternate and reserve directors, the availability of multi class and multi currency shares, the availability of segregated portfolios and other enhancements. In addition, the benefit of tax neutrality makes the British Virgin Islands a compelling choice for some clients.

there have been several legislative attempts recently by governments globally, aiming to limit the benefits that are available to companies looking to take advantage of benefits associated with offshore companies. In your opinion, what do you think was the most important legislative change for this sector?

Two of the most important legislative changes

are the Dodd-Frank Act in the USA and the AIFMD in Europe. Both of these seek to introduce new regulations that will affect hedge funds and in the case of the AIFMD also private equity funds. Under the Dodd-Frank Act investment advisors with assets under management in excess of U$150M will be required to be registered with the US SEC and will also be subject to additional reporting requirements. In Europe, the AIFM contains new leverage, depositary, indemnity insurance and other requirements for EU fund managers and for non-EU funds that are intended to be marketed in the EU. The AIFMD also introduces a passporting regime that, once fully implemented, will allow a qualifying fund to be marketed across the entire EU without having to obtain approval from each individual EU jurisdiction. Most offshore jurisdictions will be working to ensure that they implement policies and legislation that will ensure compliance with Dodd-Frank and the AIFMD. For instance, the BVI is currently taking steps to ensure that BVI funds will be able to take advantage of the passporting regime (which will not be available to non-EU funds until 2015) being introduced by the AIFMD.

What are the main legal implications that companies should be aware of when looking to invest in your jurisdiction?

Companies should take full tax advice on the implications of investing offshore. There may be significant tax benefits for certain types of transactions or for some structures. Companies should also take legal advice as to whether the activity in which they intend to engage requires the company to obtain any special licence under BVI law. For instance under the Securities and Investment Business Act, 2010 several activities are designated as investment business and require the company engaging in that

activity to obtain a licence. As such any broker activity, investment advice business, investment management business and a few other types of related activity require licences.

contact details

Kerry is the managing partner of o’neal Webster. He is also a partner within the firm’s commercial department and heads the firm’s Investment Business and Regulatory team.”

Kerry anderson Partner

o'neal Webster 30 decastro Street Simmonds Building P.o. Box 961

Road town, tortola British Virgin Islands VG 1110

tel: (284) 494 5808 Fax: (284) 494 5811

Email: kanderson@onealwebster.com

www.lawyer-monthly.com

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