BVI Leads at China Offshore Summit

Hong Kong/Tortola, 9 November: “BVI – Leading from the Front” was the theme of a feature presentation at this year’s China Offshore Summit held in Shanghai from November 4th – 5th, and attended by more than 500 Chinese business leaders.

Presenting on behalf of BVI Finance, Martin Crawford, Chief Executive Officer of Vistra Group, outlined why the British Virgin Islands (BVI) was the undisputed market leader in the offshore financial services industry, especially in the Asian market.  The BVI, he said, held about 50 percent of the market share of new offshore companies formed globally.  Of the close to 500,000 active companies on the BVI’s registry, about 60 percent were from Asian clients. 

He also noted the BVI’s top-ranking as the most competitive offshore financial centre in the Global Financial Centres Index (GFCI).  The BVI remained the market leader because of a number of factors, including its ease of doing business, speed and efficiency, legal and commercial certainty, as well as its robust regulatory standards.  With more than 200 BVI practicing lawyers in Asia, the BVI has an extensive network of experienced professionals in Asia, where it has been operating for more than 25 years, said Crawford.

Through the use of its corporate structures, the BVI was a key investment partner with China, the world’s second largest economy.  The partnership has resulted in the BVI being the second largest source of foreign direct investment (FDI) in China from 2006 to 2012, and the fifth source of outward direct investment (ODI) in 2012.   

While the BVI dominates in investment holding companies, Crawford said the current trend is towards clients using the BVI for more sophisticated and complex structures, such as special purpose vehicles, financing, listing, mergers and acquisitions, funds and trusts.  He said the BVI is focused on “valued-added”, rather than pure volume.

He also referenced the sixth Offshore 2020 Report, which annually examines trends in the offshore industry.  For the sixth consecutive year, the BVI was ranked as the most important jurisdiction by survey respondents both inside and outside Asia.  Of note in the report was that contrary to common perception, the BVI and other offshore entities were being readily used more for non-tax driven purposes than for tax-driven purposes.  While about 40 percent were using BVIs and other offshore structures for asset protection, investment holdings for corporates, and wealth management, 20 percent were using them for special purpose vehicles, and listing vehicles for initial public offerings, and only 12 percent and 8 percent for individual and corporate tax planning respectively.

Crawford pointed out that BVI was also gaining share on the Hong Kong Stock Exchange (HKEx) and that the top ten listed companies on both the HKEx and the Shanghai Stock Exchange had a number of BVI subsidiaries. Crawford concluded that the BVI is “in pole position relative to other offshore jurisdictions, as it is leading from the front,” further stating that “the BVI and its future is very much guaranteed.”

Also presenting for the BVI at the Summit were Barry Mitchell, Group Legal Counsel at AMS Financial Group on a panel discussion on Techniques for Cross-Generational Wealth Succession and Elise Donovan, Director of BVI House Asia on a panel on Transparency, an Inevitable Rule of the World.

Commenting on this year’s summit, Donovan said: “We are pleased to see that the BVI continues to be viewed as the undisputed jurisdiction of choice in the offshore financial services industry. We are grateful for the support and positive endorsement that we as a jurisdiction have received from the financial services practitioners attending this year’s summit. China continues to be systemically important to the global financial system and we are proud to offer an innovative and reliable set of solutions to our longstanding clients in this region.”

Kristy Calvert, Managing Partner China of Harney, Westwood & Riegles also compared BVI, Cayman Islands and Hong Kong company structures.

The BVI information booth at the Summit was manned by executive officer of BVI House Asia Peter Gao and in-coming Asia Representative from the BVI Financial Services Commission Leon Wheatley.