British Virgin Islands: Top Ten Questions When Entering Into A BVI Joint Venture

Last Updated: 19 November 2018
Article by Jamealya Fahie

The British Virgin Islands is an ideal home jurisdiction for establishing joint ventures because of the variety of structures available under its laws. The Territory is known for a relentless pursuit of refining and advancing its financial services legal structures and complying with worldwide regulatory regimes.

While a variety of corporate options exist, other structures are available that do not involve the creation of a company. Your answers to these ten questions will uncover the best path for your needs. Whatever the size or nature of your venture, the BVI will have a solution for you.

1. Who is involved?

Knowing exactly who the involved parties are is necessary for creating enforceable structures. The responsibilities that a party takes on will vary depending on these facts. Also, special considerations will apply if a cross-border element is involved.

  • Are the parties individuals, corporations, unincorporated associations, or a mix of these?
  • Where is each party located, geographically?
  • What is each party's role in the joint venture?

2. What stage is your project at right now?

Have the parties decided what business will be carried on, what each party will contribute, and the places where the business will be carried out? Are market studies needed before entering into the joint venture?

If any of these matters remain outstanding, you need to consider a negotiation period and perhaps an evaluation period. Much will depend on the parameters you set for evaluation and negotiation.

For example:

  • the length of time you will allocate for evaluation and negotiation;
  • the options for what happens if the negotiation breaks down or if the evaluation yields unexpected results;
  • the level of confidentiality you need; and
  • the intellectual property considerations that should be built into these processes.

3. What business will be carried on?

Appropriate structures are based on whether the enterprise is intended to be a long-term venture, versus a one-off, a pilot, or a limited time project. Also, you need to be clear about whether it is a non-profit or a profit-making venture, and if the latter, the level of expected turnover and income.

Objectives and expectations must be set out at the beginning of your joint venture even if subject to review and revision later on. We strongly recommend that you establish a clear process for revision and decision making. If the activities are subject to regulation in any jurisdiction, specific constraints may be imposed by the regulator on the form that the joint venture must take and the persons who may be involved.

4. What contributions are needed?

Contributions may be financial, physical, creative, intangible, or different combinations of all of these. Also, different types of contributions may be required at various stages and can be valued in multiple ways. For example, parties may choose to place a certain tangible value on intangible contributions, such as facilitating strategic alliances with key industry participants or within industry networks at the onset and relinquish that value at a certain point in the venture's operation.

You will need to decide:

  • whether parties will be required to make contributions;
  • how needed finance will be raised;
  • whether parties can be called upon to provide additional contributions when needed; and
  • how the responsibility for such contributions will be allocated.

5. What commitment and restrictions will be required?

Parties must consider whether they will be able or allowed to devote time to other businesses or projects, whether the activities compete with the joint venture or not. If there are any restrictions, will parties be compensated, and if so, what will be the nature of the compensation? Also, will restrictions be limited by time or geographic region? If so, these restrictions must be reasonable to be enforceable. However, because there is no set standard for what is "reasonable," what is reasonable in the particular context of the venture and the parties involved needs to be identified.

If parties are involved in other ventures that might trade or contract with the joint venture, the parameters of those arrangements should be clearly defined, including how the parties will deal with real or potential conflicts of interest.

6. How will the BVI joint venture be operated?

All required permits and registrations for the operation must be applied for before the venture will start operations and thus parties must allow for sufficient time to acquire them. Also, the parties must consider the administrative structure of the joint venture, whether they need to appoint professional advisers such as bankers, lawyers, accountants, or auditors, and whether they will need to hire employees. What will your management structure look like? Will the business need insurance, and if so, what types of insurance will need to be maintained?

Other factors to consider are:

  • Who will oversee implementation?
  • Who will be authorized to communicate information on behalf of the joint venture?
  • Who will have signatory power?

All operating matters should be adequately documented and available to all stakeholders.

7. How will income, profits, and losses be distributed?

Arrangements for how income will be treated and allocated, how and when any profits will be distributed, and how any losses will be borne must be established at a very early stage. If cross-border profit distributions are involved, parties need to take advice on the tax implications of distributions that they may become entitled to and whether there are different tax consequences depending on the structure of the joint venture or whether they participate as an individual or through a corporate entity or another vehicle such as a trust.

8. How will disputes be resolved?

In any collaborative project, disputes may arise. If you establish a clear, simple process for dispute resolution, this can help to resolve disagreements while preserving the relationship between the parties quickly. Depending on the complexity of the joint venture, parties can consider a hierarchy of dispute resolution strategies, increasing in formality, to escalate disagreements if the resolution is not initially achieved.

9. If necessary, how will the BVI joint venture be dissolved?

The joint venture may be for a specific project or a specific time, or, eventually, a dispute may arise that can only be resolved by the dissolution of the venture. Whatever the case, establishing clear procedures at the very outset for bringing an orderly close to the business and relationship of the parties and apportioning or otherwise dealing with the assets and liabilities of the joint venture is extremely beneficial.

10. What is the best structure for the joint venture?

Careful consideration of the factors outlined above will help the parties and their legal advisers decide on the most appropriate method for establishing the joint venture. Under BVI law this can be done by contract, through various forms of partnership, or through a BVI Business Company.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions