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The British Virgin
Islands in Asia – An
Overview
Barry Mitchell
2 October 2013
Financial / Legal Services in Asia –
Opportunities for Growth
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Hong Kong
People’s Republic of China
Singapore
Indonesia
Taiwan
India
Thailand
Vietnam
South Korea
Japan
1
Types of Transactions / Matters
Hong Kong
• REIT’s – market is quiet – yields remain insufficient
• Closely held property / holding companies
– No change
– Banking and finance
• Hedge funds
• Private equity funds
• Small number of manager / administrator licensing applicants
• Private client / wealth planning / succession
• Probate
• Trust disputes
• Shareholder disputes
• Take privates
2
People’s Republic of China
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BVI still second largest investor into PRC behind Hong Kong but signs market
is slowing
BVI companies still preferred vehicle for inbound and outbound investments
Used in increasingly complex and substantial deals
A lot of financing transactions
Private client / wealth / succession
Private Equity and Venture Capital
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Private transactions in growing companies – potential IPOs
Early stages of funding
Wide range of deals – expansion / seed capital / pre IPO
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People’s Republic of China
• Established private businesses
• Sectors – broad range
– Telecom /agriculture / infrastructure companies
– Media
– IT
– Property
4
Types of Transactions / Matters
Singapore
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Capital markets – bonds / notes
Banking and finance – hub for SE Asia
Funds
Asset and Project Finance – shipping and aircraft
Probate
Private client / wealth planning/ succession
5
Types of Transactions / Matters
Indonesia (via Singapore)
– Capital markets – issuing notes / bonds
– Financing transactions
– Infrastructure projects
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Types of Transactions / Matters
Taiwan
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Private investment vehicles
Hedge funds
Financing
Bond / Note issues
Private client / wealth planning / succession
Probate
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Types of Transactions / Matters
India
• Continues to be a developing market
– Structured finance
– Private equity financing
– Funds
• Exchange controls being loosened – easier to enter market
• English speaking and common law – easier than China?
• Private client / wealth / succession
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Types of Transactions / Matters
Thailand (via Singapore)
• Property – hasn’t fully recovered from 2008 crash
– Condominiums
– Mainly financing
• Concerns over political stability
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Types of Transactions / Matters
Vietnam
• Funds and fund managers
– But a difficult market
10
Types of Transactions / Matters
South Korea
• Has become more active but has not grown at the rate we had hoped
• Tends to be related to financing transactions
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Types of Transactions / Matters
Japan
• A difficult market for BVI
– Quite entrenched in using Cayman
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What Are We Seeing?
• IPO’s
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BVI gained listing rights on the Hong Kong Stock Exchange in late 2009
Have slowed significantly since 2008 crash
3 BVI companies have listed to date but conceivably plenty to come
Maples and other firms currently have several in the pipeline
- Was an issue over the requirement for “nexus” with the BVI but confident
this is now resolved
Bond / Note issues
Structured finance
Asset finance / banking
Take privates
– Alibaba from the HKSE
– Shanda Interactive / Funtalk / Chemspec from the USA
13
What Are We Seeing?
• Litigation
– Potential for significant trust litigation in the foreseeable future
– Shareholder disputes
• Private client
– Significant potential for growth in PRC / Indonesia
– VISTA trusts well accepted in HK / PRC / India
– Recent amendments to trust legislation well received
– Increasing understanding of the trust concept in the region
– Pre – IPO trusts set up by founders
– Employee Benefit Trusts – linked to possible listings
• Market conditions
– Very competitive
– Issues with bank account opening for BVI companies
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Random Thoughts / Observations
BVI got it right with the BCA
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Continues to be well accepted
Distribution regime very popular
Reserve directors popular (particularly in HK)
Chinese names very popular in HK / PRC
Market likes to have HK based advisors
• Maples office now has over 25 attorneys doing BVI law in HK
• Other BVI law firms / company secretarial operations have increased
in size / entered the market
15
Random Thoughts / Observations
BVI House Asia – a very good thing
• Long overdue – private sector has driven growth in Asia to date
• Need to take advantage of it – feed comments back to BVI
• Allows for general business development and regulator to regulate
exchanges (hopefully)
Industry Association is being developed
• Largely a result of BVI House Asia
• Has focused on bank account opening issues
• Industry members had a fruitful meeting with members of the FSC
around the official launch of BVI House Asia last month
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Random Thoughts / Observations
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Hong Kong Listings - still huge potential business for BVI
Clients are better educated – helps with compliance – EI letters
Industry needs to be nimble and act quickly – getting better at this
Need to think laterally to find new structures / products
– Bring the offshore, onshore
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Summary
• Still feeling the effects of the financial crisis 5 years on
• Asia has been relatively insulated but now arguably China is starting to
slow
• Outlook for business in Asia is generally still positive
• BVI offering is very good
– Still lots of interest
– Beijing and Shanghai Offshore Summit each attracts 400 plus delegates
• Need to focus on:
– Intermediary compliance
– Increasing banks understanding of BVI as a jurisdiction
• Good opportunities in the private client / wealth planning / succession
areas
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Biographies
Expertise
Barry has extensive experience in all aspects of corporate,
banking and trust law matters. He heads the BVI law desk in
the Hong Kong office.
Professional Background
Barry Mitchell, Partner
Direct: +852 2971 3004
Mobile: +852 9096 1004
[email protected]
Barry joined Maples and Calder in 2004 on the merger with
Smith-Hughes, Raworth & McKenzie in the BVI. He was
previously managing director of an international trust company
and before that, worked for Simpson Grierson Butler White
and Russell McVeagh McKenzie Bartleet & Co in New
Zealand.
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