1. Industry research suggests that China will soon rank first in the world as a source of clients. Have you experienced an increase in demand for your company incorporation services from this region?
The British Virgin Islands (BVI) continues to be the jurisdiction of choice for the China and there continues to be a demand for BVI business companies and other corporate structures.
The fact that BVI companies are used for such diverse purposes – as listing vehicles, joint venture companies, asset holding companies and open and close-ended fund vehicles – highlights the role and sustainability of the BVI as a stable, flexible and leading international finance centre in an increasingly complex and evolving global financial system.
In China the BVI plays a major role in FDI. Statistics show that China’s outward and inward FDI flows through the BVI have, in spite of the global financial crisis, continued to increase. While major economies struggled, China continued to experience growth, and chose BVI as a conduit for that growth.
Today, trends show that China’s outward investment is set to overtake inward investment within two to three years. Outbound Chinese investment grew by an average annual rate of 45 percent between 2002 and 2011, and in 2013, swelled to US$101 billion, making China the third largest investor in the world. The BVI has continued to be the chosen partner for Chinese business, highlighted by the fact that it is the second largest recipient of China’s inward direct investment – second only to Hong Kong. As China continues to open up its economy, slated to become the world’s largest by 2020, the BVI will continue to be the go-to conduit for China offshore investment.
2. What is the single most important advantage your jurisdiction provides for Chinese clients?
The BVI provides many advantages for Chinese clients, but one of the greatest competitive advantages that the BVI has is its deep experience and mature infrastructure in the Asia region doing business with Chinese clients. The BVI has been doing business with China and Asia for more than 25 years and has developed an intimate understanding of the demands and needs of the market and strived to respond to those needs.
BVI practitioners doing business with Chinese clients come from the world’s leading corporate firms, trust companies, law firms and accounting firms, as well as others involved in the financial services sector. Having helped Chinese clients do business globally for over 25 years, the BVI practitioners are market experts when it comes to understanding the BVI and the business and personal wealth needs of clients in China, Asia and throughout the world. The BVI is proud to have a robust network of experienced, trusted advisors around the world. They offer a sophisticated array of corporate services, in addition to diverse wealth management solutions in trust and estate planning, funds and investment business, captive insurance and ship and aircraft registration and financing services.
This experience and mature infrastructure also relates to the BVI’s robust regulatory regimes.
3. What is your jurisdiction’s unique selling point in setting up offshore companies for Chinese clients?
World Class Efficiency. The BVI has some of the most innovative legislation that facilitates efficient incorporation and administration of companies. The BVI Business Companies Act 2004 is widely regarded as one of the most modern and progressive company laws in the world, offering the greatest flexibility. Companies can be operated with ease: there are no requirements for annual shareholder meetings, no requirements to file audited accounts, and no requirements for directors to reside in the BVI, ensuring simple and quick corporate transactions.
BVI companies can be incorporated quickly and easily within 24 hours on BVI’s electronic state-of-the-art electronic system VIRRGIN. The BVI’s special purpose vehicles have been tried and tested over many years throughout the world. Their use is so prolific that offshore companies are known in the Chinese market as simply “BVIs).
4. It has been suggested that price remains a major factor for consideration for Chinese clients. Do you agree with this statement, and how do you think this will change in the years to come? Are you noticing a shift in emphasis on price to an emphasis on the quality of offshore structures?
Of course the BVI offers both the best price and best quality. The BVI is known as the most cost-effective jurisdiction in which to do business. The set up fees for a company, partnership, fund or trust arrangement are low, and operating fees are minimal. These are all top quality structures, so ultimately the BVI provides the best value for money. Chinese clients have been doing business with the BVI for many years and will remain doing business with the BVI because the jurisdiction offers a combination of best price and best quality.
5. If you could describe the incorporation industry as it relates to China in one word, what would that be?
In China, the “BVI” is the market leader and its name has become synonymous with the incorporation industry. The use of BVI companies is so dominant that in China one word is used for the incorporating companies, and that word is “BVI”.
Source: BVI House Asia