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The British Virgin Islands (“BVI”) is home to over 416,000 active companies. This article considers the benefits of using a BVI company in financing transactions.
BVI has many attractive features, including political stability, tax neutrality and the absence of exchange control and currency restrictions. From a legal perspective it is creditor friendly, has a well-developed, English based legal system, a bespoke commercial court and flexible highly commercial legislation. On top of this, the BVI adheres to international standards of compliance. These are all factors which have led to the BVI being a jurisdiction of choice for corporate vehicles entering into financing transactions.
Subject to the BVI Business Companies Act (the “Act”), any other enactment and its memorandum and articles, company has irrespective of corporate benefit –
Without limiting the above, the powers of a BVI company include the power to do the following –
For the purposes of d) the directors may cause the company to transfer any of its assets in trust to one or more trustee(s) and with respect to the transfer, the directors may provide that the company, its creditors, its members or any person having a direct or indirect interest in the company. However, the rights or interests of any existing or subsequent creditor are not affected by such a transfer, and those rights or interests may be pleaded against any transferee in any such transfer.
Under the Act no act of a company and no transfer of an asset by or to a company is invalid by reason only of the fact the company did not have the capacity, right or power to perform the act or to transfer or receive the asset.
To continue reading full articles in PDF format:
A Guide to Financing and the British Virgin Islands