The British Virgin Islands (BVI") has been approved as an
Acceptable Overseas Jurisdiction ("AOJ") by the Hong Kong
Stock Exchange ("HKEx") enabling BVI companies to float
on HKEx. It is estimated that there were 65,000 BVI Business
Companies incorporated in the BVI last year and the inclusion on
the AOJ list will expand the opportunities for BVI companies to tap
Hong Kong's capital markets currently hungry for investment
BVI companies are well-known to the industry players in Hong
Kong and China, where their use is favoured in commercial property
transactions, and for structuring private equity investment. The
initiative to include BVI companies to the HKEx list of accepted
jurisdictions is in part driven by Hong Kong's commitment to
maintain its status as a leading international IPO destination,
which according to a report of the World Federation of Exchanges
has seen over US $13.82 billion raised in the first 10 months of
2009, well ahead of listings on exchanges in Shanghai, Brazil and
With the inception of the BVI Business Companies Act, 2004,
previous concerns in relation to minority shareholder protection
were addressed, allowing BVI Business Companies to fall within more
generally accepted international guidelines for the protection of
minority shareholders. HKEx and shareholders of any BVI Business
Company should be comforted by this fact.
The BVI government has also signed a Tax Information Exchange
Agreement ("TIEA") with China on 7 December 2009 and the
TIEA will allow for exchange of information in relation to direct
taxation. With this TIEA in place, the BVI's position as a
corporate domicile for Asian businesses is further enhanced. This
positive development, together with the HKEx's decision to
accept BVI companies for listing in Hong Kong increases the appeal
of the BVI to international investors. It is expected that the BVI
will become even more prominent as a preferred jurisdiction for
investors looking to make pre- IPO investments in China with the
aim of eventually listing on HKEx.
The number of overseas jurisdictions that Hong Konglisted firms
can be incorporated in has risen to 10 following the inclusion of
the BVI. The HKEx is also currently considering an application from
a Jerseyincorporated company with principal operations in Russia to
list in Hong Kong. In addition to the potential listing of
companies domiciled in BVI and Jersey, companies incorporated in
the Cayman Islands are already commonly listed on the HKEx. Ogier
provides legal services in all of these jurisdictions.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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