Mobile Menu
Articles

A Guide to Financing and the British Virgin Islands

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’s Broad Appeal

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.

Capacity and Powers of a BVI Business Company

Subject to the BVI Business Companies Act (the “Act”), any other enactment and its memorandum and articles, company has irrespective of corporate benefit –

  1. Full capacity to undertake or carry on any business or activity, do any act or enter into any transaction and
  2. For the purposes of paragraph (a) full rights, powers and privileges.

Without limiting the above, the powers of a BVI company include the power to do the following –

  1. Unless it is a company limited by guarantee or an unlimited company that in either case is not authorised to issue shares –
    1. Issue and cancel shares and hold treasury shares;
    2. Grant options over unissued shares in the company and treasury shares;
    3. Issue securities that are convertible into shares and
    4. Give financial assistance to any person in connection with the acquisition of its own shares;

  2. Issue debt obligations of every kind and grant options, warranties and rights to acquire debt obligations;
  3. Guarantee a liability or obligation of any person and secure any obligations by mortgage pledge or other charge, of any of its assets for that purpose and
  4. Protect the assets of the company for the benefit of the company, its creditors and its members and, at the discretion of the directors, for any person having a direct or indirect interest in the company.

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

 


Audrey M. Robertson
Counsel

British Virgin Islands   +1 284 852 1111


Robert J.D. Briant
Partner, Head of BVI Corporate

British Virgin Islands   +1 284 852 1100


Accolades
_

"They understood the urgency and demanding nature of the deals that we were working on - they were very responsive and commercial, and worked with us to make it happen."
- Chambers Global