Harneys Aristodemou Loizides Yiolitis LLC

Limassol

Harneys Aristodemou Loizides Yiolitis LLC is a Cyprus law firm specializing in all aspects of Cyprus commercial, banking, corporate, tax and trust law. The law firm distinguishes itself from other Cyprus law firms as it focuses solely on the business side of the law and does not undertake activities such as litigation and dispute resolution. The philosophy of the firm captures the essence of an international trend of investment into and via Cyprus driven by the favourable Cyprus tax regime.

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Updates

Arbitration & ADR

Arbitration agreements and insolvency proceedings
British Virgin Islands | February 11 2016

Two recent decisions examined attempts by debtors to rely on the mandatory stay provisions in the BVI arbitration legislation in order to avoid liquidation. On both occasions the court came down decisively against the debtors, which were unable to show a substantive dispute to the debt. The decisions have brought clarity to the situation and closed the door on a potentially abusive practice.

Aviation

Stand by for take-off: Cape Town Convention extension date confirmed
Cayman Islands | September 02 2015

The United Kingdom has confirmed that the Cape Town Convention will come into force on November 1 2015. On that date the Cayman Islands will gain the status of a territorial unit of a convention state. In anticipation, Cayman authorities have been preparing the legislation necessary to bring the Cape Town Convention into force so that it interacts harmoniously with existing Cayman registration regimes.

Banking

EU Banking Recovery and Resolution Directive: the Cyprus position
Cyprus | January 27 2017

In 2013 Parliament passed the Resolution of Credit and Other Institutions Law to facilitate the restoration of the viability of the Cyprus financial sector. However, this law was enacted before the implementation of the EU Banking Recovery and Resolution Directive. Parliament has now enacted the new Law for the Resolution of Credit Institutions and Investment Companies in order to align Cyprus national law fully with EU provisions.

Passporting through Cyprus post-Brexit
Cyprus | November 18 2016

The most pressing Brexit concern for UK-based credit and financial institutions is the terms on which they will continue to have access to the EU single market and related passporting rights if and when the United Kingdom leaves the European Union. Cyprus can offer a solution to international firms and institutions seeking certainty over EU single market access.

Credit acquiring companies in Cyprus
Cyprus | March 04 2016

Recent changes to the law give banks the opportunity to proceed with the securitisation of non-performing loans and make them available to investors. It is now possible for a broad number of legal entities to engage in activities for acquiring credit facilities in Cyprus. This development expands the range of investment possibilities for credit and financial institutions, as well as private companies, subject to prior authorisation from the Central Bank of Cyprus.

Islamic finance continues to grow
British Virgin Islands | February 05 2016

As the Islamic finance market grows and matures, international financial centres such as the British Virgin Islands are being used to facilitate the structuring of Islamic finance products and transactions such as sukuk and musharakah and the incorporation of investment funds and corporate structures. BVI companies are also used by Islamic high-net-worth individuals and families as holding companies for assets in developed markets.

Banking transaction restrictions abolished
Cyprus | May 01 2015

The president of Cyprus recently announced that the restrictive measures on the movement of capital relating to transactions and transfers of funds abroad would be completely abolished and as a result the corresponding banking decrees (Decree 35 and Decree 28) would not be renewed. Funds are now freely transferable both within Cyprus and abroad.

New Cyprus banking decrees released
Cyprus | March 27 2015

The minister of finance recently published two new decrees that further relax banking restrictions. The first decree clarifies the restrictions that are in place on the use of credit and debit cards and other payment instruments, while the second allows foreign credit institutions and their customers to enjoy relaxed restrictions, subject to certain conditions.

Latest banking decrees issued
Cyprus | February 06 2015

The Ministry of Finance recently published two new decrees that further relax banking restrictions. The first decree clarifies the restrictions that are in place on the use of credit and debit cards and other payment instruments, while the second allows foreign credit institutions and their customers to enjoy relaxed restrictions, subject to certain conditions.

New decrees further relax banking restrictions
Cyprus | January 09 2015

The minister of finance recently published two decrees amending the Enforcement of Temporary Restrictive Measures on Transactions of Foreign Banks in Case of Emergency Law of 2013. The decrees allow for foreign credit institutions and their customers to enjoy relaxed restrictions subject to certain conditions. This update outlines the remaining restrictive measures and exceptions thereto.

New decree on enforcement of restrictive measures on transactions
Cyprus | November 21 2014

The minister of finance recently published Decree 31 under Articles 4 and 5 of the Enforcement of Restrictive Measures on Transactions in case of Emergency Law of 2013. The restrictions have been significantly relaxed since their original enforcement. This update outlines the remaining restrictive measures and exceptions thereto.

Relaxation of restrictive measures for branches and subsidiaries of foreign banks
Cyprus | November 14 2014

The Ministry of Finance recently published its 24th Decree on the Enforcement of Temporary Restrictive Measures on Transactions of Foreign Banks in case of Emergency Law of 2013. The decree allows foreign credit institutions and their customers to enjoy relaxed restrictions subject to certain conditions.

Cyprus further relaxes banking restrictions
Cyprus | July 11 2014

The minister of finance recently published Decree 30 under Articles 4 and 5 of the Enforcement of Restrictive Measures on Transactions in Case of Emergency Law 2013. The new decree further relaxes the restrictive measures imposed on banks and their customers.

Latest decrees set out further relaxation of restrictive measures
Cyprus | April 17 2014

Two new decrees were recently issued in Cyprus pertaining to the relaxation of restrictive measures. The first allows foreign credit institutions and their customers to enjoy relaxed restrictions, subject to certain conditions; the second further clarifies the restrictions that are in place on the use of credit and debit cards and other payment instruments.

Restrictions on transfers of deposits or funds partially eased
Cyprus | February 07 2014

The Ministry of Finance recently published the 25th Decree, as required by the Enforcement of Restrictive Measures on Transactions in Case of Emergency Law. The decree replaces the 19th Decree and further clarifies the restrictions that are in place on the use of credit and debit cards and other payment instruments, including the amounts that can be withdrawn and/or transferred from such instruments.

Bank of Cyprus issues two milestone decisions
Cyprus | February 07 2014

The board of directors of the Bank of Cyprus Public Company Ltd recently approved two important decisions, thereby meeting the expectations of its depositors and the general public in Cyprus for enhancing liquidity in the economy. The decisions govern the release of blocked six-month time deposits and the approval of the procedure for transferring the bank's shares respectively.

Latest decrees set out relaxation of restrictive measures
Cyprus | November 15 2013

Two new decrees were recently issued in Cyprus pertaining to the relaxation of restrictive measures. The first further clarifies the restrictions that are in place on the use of credit and debit cards and other payment instruments, while the second relaxes the restrictions on foreign credit institutions and their customers, subject to certain conditions. Both are in force for one month.

Decree clarifies restrictions on transfers of deposits or funds
Cyprus | August 23 2013

The Ministry of Finance recently published the 19th Decree, as required by Articles 4 and 5 of the Enforcement of Restrictive Measures on Transactions in Case of Emergency Law. The decree further clarifies the restrictions that are in place on the use of credit and debit cards and other payment instruments, including the amounts that can be withdrawn and/or transferred from such instruments.

Relaxation of restrictive measures for branches and subsidiaries of foreign banks
Cyprus | August 23 2013

The Ministry of Finance recently published the 10th Decree, as required by Articles 4 and 5 of the Enforcement of Restrictive Measures on Transactions in Case of Emergency Law. The decree allows for foreign credit institutions and their customers to enjoy relaxed restrictions subject to certain conditions. Eligible credit institutions will be entered into a catalogue and published in the Official Gazette.

Recent changes show little impact on Cyprus corporate structures
Cyprus | May 24 2013

Cyprus has recently been in the spotlight as a result of the negotiations with the so-called 'troika' (the International Monetary Fund, the European Central Bank and the European Commission) regarding the terms of financial aid. Although a number of changes are to be introduced, these are unlikely to affect corporate structuring involving Cyprus or banking both in and outside Cyprus using a Cyprus corporate vehicle.

Managing the crisis: Parliament enacts Resolution of Credit Institutions Law
Cyprus | April 12 2013

In order to implement the Eurogroup agreement on the restructuring of the Cypriot banking system, Parliament recently enacted a new law on the resolution of credit institutions. The law aims to pave the way for the speedy reconstruction and rehabilitation of credit institutions under resolution and the concentration of powers to a resolution authority, among other things.

Banking secrecy: when can account information be divulged?
Cyprus | March 15 2013

Under the Banking Law, all persons with access to the records of a bank are prohibited from giving out, divulging, revealing or using for their own benefit any information regarding the account of any individual customer of the bank, unless certain exceptions apply. The rules aim to enhance the trustworthiness of banks and credit institutions and encourage them to impose internal structures in order to ensure compliance.

Freedom of establishment of credit institutions
Cyprus | December 21 2012

As a well-established financial services centre and a member of the European Union, Cyprus is one of the best environments in Europe for the provision of banking services. A credit institution which is authorised and supervised by the competent authorities of another EU member state may conduct banking activities in Cyprus either by establishing a branch or by way of provision of services.

Capital Markets

ESMA guide provides clarity regarding obligations under Transparency Requirements Law
Cyprus | April 11 2017

The European Securities and Markets Authority recently published a practical guide which provides an overview of each EU member state's national rules for the major holdings notification regime provided under the EU Transparency Directive. The guide clarifies certain key obligations and deadlines which apply under the Cyprus legislation that implemented the EU Transparency Directive and the Transparency Requirements Law.

PDMRs and closed periods under Market Abuse Law
Cyprus | March 07 2017

The government recently enacted the Market Abuse Law (102(I)/2016), which implemented the EU Market Abuse Regulation (596/2016). A provision of the regulation which has generated much discussion relates to persons discharging managerial responsibilities and the obligations of persons closely associated with them regarding transactions conducted on their own account concerning the issuer's shares, debt instruments, derivatives or other linked financial instruments.

Common pitfalls in cross-border reporting requirements under EU Transparency Directive
Cyprus | November 01 2016

Cypriot companies are frequently used in cross-border structures, whereby their securities are listed on a regulated market of another member state. In this regard, Cypriot issuers and holders of securities in cross-border listing structures must consider the often overlooked notification requirements under the EU Transparency Directive.

Benefits of using Cyprus-based companies to invest in Iran
Cyprus | May 10 2016

The European Union recently scaled back sanctions regarding Iran, marking the country's return to international capital markets. Investment in Iran through Cyprus-based companies and institutions offers international investors unparalleled benefits over other models of foreign direct investment. These include the Cyprus-Iran bilateral investment treaty, the Cyprus-Iran double tax treaty and Cyprus alternative investment funds.

Directive clarifies and amends issuer requirements
Cyprus | February 02 2016

EU Directive 2013/50/EC, which amends the EU Transparency Directive, has introduced a number of key changes regarding transparency requirements that will help Cypriot issuers to streamline their reporting requirements and obligations. The clarifications regarding depositary receipts and how an issuer determines its home member state offer issuers a greater level of certainty and flexibility.

Impact of side letters on core provisions of Cayman Islands funds
Cayman Islands | October 13 2015

The Cayman Islands Court of Appeal recently issued a decision concerning the impact of side letters on the constitutional arrangements of Cayman funds. One of the critical questions raised by the case was whether a side letter was enforceable when made between the investment manager of a fund and an individual institutional investor in that fund, where the investment manager had no actual or ostensible authority to make it.

Significant Cyprus investment firms – shedding light on the law
Cyprus | October 06 2015

The Cyprus Securities and Exchange Commission recently issued a circular clarifying when a Cyprus investment firm (CIF) qualifies as a significant CIF. By setting easily recognisable limits in the form of thresholds, the circular clarifies the applicable legislation for CIFs to assess whether they qualify as significant CIFs and makes it easier to identify whether they are compliant with the law.

Fund administration – opportunities for offshore and alternative investment funds
Cyprus | June 16 2015

There are many opportunities and benefits for the use and establishment of fund administrators based in Cyprus. Regulation is provided for under separate yet interweaving regimes based on the EU Alternative Investments Fund Managers (AIFM) Directive. The flexibility and cost-effectiveness of the AIFM Law 2013 and the AIF Law 2014 have turned Cyprus into a thriving jurisdiction for fund administration.

Investment fund regulation offers access to all types of EU investors
Cyprus | February 17 2015

Investment funds in Cyprus are supervised by a common regulator and can be marketed across the European Union on a passport basis. The passport for undertakings for collective investment in transferable securities is a tool for fund promoters that intend to target retail investors, while the passport for alternative investment funds is used by fund promoters that intend to solicit professional investors.

A guide to UCITS marketing in Cyprus
Cyprus | August 19 2014

The marketing and distribution of undertakings for collective investment in transferable securities (UCITS) in different EU member states is governed by the national laws of the host member state. The Cypriot legal framework provides for a broad definition of 'marketing', allowing for only limited exceptions from the notification procedure and from compliance with local marketing and distribution rules.

Protection of AIFMs against a depositary's insolvency
Cyprus | June 24 2014

Last year's banking crisis raised the issue of whether and to what extent Cypriot financial services legislation can effectively protect the local asset management industry against a bank's insolvency. The reason for raising this issue is that cash and financial instruments belonging to investment funds and individual clients of asset managers continue to be entrusted to banks for safekeeping.

Knocking on CySEC's door: how to determine whether an entity is a Cypriot AIFM
Cyprus | April 01 2014

The Alternative Investment Fund Managers (AIFM) Law imposes three regulatory duties on all Cypriot AIFMs. They must identify themselves as AIFMs, calculate the total assets under management in all alternative investment fund portfolios managed by the Cypriot AIFM as principal manager and, depending on the result of such calculation, register with or seek authorisation from the Cyprus Securities and Exchange Commission.

Ready for business: impact of AIFM Directive on Cypriot funds becomes clearer
Cyprus | December 17 2013

A recent seminar on the transposition into law of the EU Alternative Investment Fund Managers Directive in Cyprus noted that the new rules will affect the content of relevant agreements and influence services provided by Cypriot banks, fund administrators and asset managers, among others. A number of considerations have emerged following the interaction of the new rules with the Cypriot funds and financial services regime.

Cyprus implements EU Alternative Investment Fund Managers Directive
Cyprus | September 10 2013

Cyprus recently transposed into law the EU Alternative Investment Fund Managers (AIFM) Directive by introducing the AIFM Law. The main provisions of the law that apply to managers of alternative investment funds falling within the scope of the law relate to the authorisation, operating conditions and organisational requirements of a Cypriot AIFM, depositary provisions and cross-border management and marketing.

Company & Commercial

Cayman Islands to introduce LLPs
Cayman Islands | March 27 2017

Draft legislation was recently published to introduce the limited liability partnership (LLP) as a new partnership vehicle in the Cayman Islands. The bill provides for the formation, registration and operation of an LLP as an entity with limited liability and legal personality separate from its partners. The bill also provides for the conversion of existing Cayman partnerships into LLPs and the continuation of foreign LLPs into the Cayman Islands.

Introduction of beneficial ownership registers proposed
Cayman Islands | March 20 2017

The government recently published draft legislation which, when adopted, will require Cayman companies to maintain beneficial ownership registers and for the information in the registers to be made automatically available to the Cayman Islands competent authority through a centralised beneficial ownership platform. The legislation is now expected to pass through the usual approval process in the Legislative Assembly.

An unusual choice? BVI restricted purposes company
British Virgin Islands | November 21 2016

Restricted purposes companies offer certain advantages and are a valuable facet of the British Virgin Island's offerings to international finance. While restricted purposes companies are intentionally niche and specialised, they prove that there remains a place in the contemporary legal world for more traditional principles of common law, such as restricted purposes and constructive notice.

Five questions lenders should ask before contracting with BVI counterparties
British Virgin Islands | November 07 2016

Lenders of BVI contracting parties are often concerned with whether the company with which they are contracting has the capacity to enter into the transaction. However, there are a number of other questions which prudent lenders should address, and they would be wise to seek specialist advice before entering into contractual arrangements with a BVI company.

Cayman legislative changes demonstrate commitment to global transparency
Cayman Islands | May 30 2016

The spotlight of the international community is shining more brightly than ever on international financial centres and those that use them, in an effort to reduce aggressive tax avoidance and tax evasion. To assist global efforts to tackle tax evasion and corruption and to increase transparency, the government has amended the Companies Law and proposed a fundamental overhaul of its confidentiality laws.

Notification requirements under Companies Law amended
Cayman Islands | December 14 2015

The Companies (Amendment) Law 2015 has come into effect and will have potential application to all Cayman companies. The law amends the sections of the Companies Law (2013 Revision) which deal with notification of appointments and changes of directors. The law now requires companies to notify the Registrar of Companies within 60 days of first appointments and any subsequent changes in the register of directors and officers.

BVI Business Companies (Amendment) Act 2015: a summary
British Virgin Islands | December 14 2015

The government recently gazetted the BVI Business Companies (Amendment) Act 2015. If passed into law as expected, it will be the 13th amendment to the BVI Business Companies Act. A number of the proposed changes will dovetail with the recently announced new premium service function at the Companies Registry to facilitate time-sensitive, complex and special transactions, such as continuations to facilitate more difficult commercial transactions.

Appointing an inspector: viable alternative to liquidation?
Cayman Islands | July 06 2015

The means of redress available to unfairly treated shareholders in the Cayman islands are limited. However, under the Companies Law, the Grand Court can appoint inspectors to examine into the affairs of any company and report thereon, on application of one of the company's shareholders. In some instances, the appointment of an inspector is the most timely and cost-effective solution to a dispute.

Corporate Finance/M&A

Mergers and fair value: what does it mean to a dissenting shareholder?
Cayman Islands | July 20 2016

Shareholders in a company that is the subject of a takeover and merger have certain intrinsic rights available to them in the event that they dissent to the merger, most notably a right to have their shares purchased at a 'fair value'. The Cayman courts will approach the issue of fair value on the individual facts; the starting point is a valuation approach on the basis of no discount or premium attributable to the merger itself.

IT & Internet

E-signatures: flexibility in cross-border transactions
British Virgin Islands | October 11 2016

The European Union's legal framework for e-signatures recently came into effect via the eIDAS Regulation. The British Virgin Islands was one of the first jurisdictions to recognise the validity of e-signatures and electronic records. Along with other BVI statutory developments, the BVI Electronic Transactions Act 2001 provides flexibility in cross-border transactions involving BVI companies.

Insolvency & Restructuring

Court clarifies ranking of shareholder claim
Cayman Islands | November 18 2016

The Cayman Islands Court of Appeal recently provided some clarity on the ranking of priority in the liquidation of amounts owing to shareholders and former shareholders of a company operating as an open-ended investment fund. The decision has confirmed that Section 37(7)(a) of the Cayman Islands Companies Law applies where a shareholder has merely accrued the right to redeem his or her shares, but has not yet completed the redemption process prescribed by the company's articles.

Green light for liquidators to draw interim payments without fee approval
British Virgin Islands | November 11 2016

The BVI Commercial Court recently clarified whether the BVI Insolvency Act 2003 provides a basis for liquidators to draw fees on account before having formal approval from either a creditors' committee or the court. The court also specifically provided that newly appointed liquidators can draw payments of up to 80% on account of their reasonable remuneration and expenses on an interim basis without the need to obtain prior approval from the creditors' committee or the court.

New York Supreme Court rules derivative claims under Cayman law must first go through Cayman courts
Cayman Islands | August 26 2016

A recent decision by the Supreme Court of New York Appellate Division has affirmed that the law of the Cayman Islands applied on the question of the law applicable to derivative claims brought by a shareholder of a Cayman Islands company in the New York jurisdiction. Any shareholder of a Cayman Islands company that wishes to bring a derivative action must commence the action in the Cayman Islands.

Appointment of receivers in the British Virgin Islands
British Virgin Islands | April 29 2016

The receiver arguably represents the most powerful weapon in the armoury available for asset tracing in the British Virgin Islands. As BVI companies are often used as holding vehicles, using a receiver to take control of the corporate structure and move 'downstream' to the assets is a particularly potent strategy. Recent developments in case law have made this remedy more widely available.

Fairfield Sentry – new guidance from BVI Court
British Virgin Islands | April 01 2016

The Fairfield Sentry saga continued recently with a new BVI judgment concerning the status of the related US Bankruptcy Court proceedings. The applicants were former registered shareholders of the Fairfield Sentry and Fairfield Lambda BVI feeder funds which had redeemed their shares before Bernard Madoff's fraud was exposed. They sought to prevent the liquidators of the funds from recovering their redemption payments in the US proceedings.

Exercise of discretion to wind up company not "head-counting exercise"
British Virgin Islands | March 25 2016

The BVI High Court recently confirmed that the exercise of the court's discretion whether to make, dismiss or adjourn an order appointing liquidators does not necessarily depend on the wishes of the majority of creditors – even when a vast majority of unsecured creditors both in number and by value oppose the appointment of liquidators.

China Shanshui: change of direction for company winding-up petitions
Cayman Islands | January 08 2016

A widely discussed recent Cayman Grand Court decision declined to follow the precedent set in Re China Milk Products Group Ltd, instead striking out a winding-up petition filed by the directors of China Shanshui Cement Group Limited for lack of standing. The decision re-establishes the principles set out in the English case of Re Emmadart Ltd as good law in the Cayman Islands.

Cayman Islands insolvency law in 60 seconds
Cayman Islands | December 04 2015

Insolvency law is principally regulated by the Companies Law and the Companies Winding Up Rules 2008, supplemented by a wide body of case law. This update summarises their features, including provisions on insolvency, commencement, appointment of a liquidator, priority, set-off, challengeable transactions, misfeasance, debt restructuring schemes, accreditation and cross-border issues.

Voluntary liquidation: an almost irreversible procedure
British Virgin Islands | November 27 2015

Can a company that has been voluntarily wound up be restored to good standing on an application by a former shareholder, liquidator or director who has a change of heart regarding the company's liquidation? A recent High Court decision confirmed the BVI position that the onus is on the claimant seeking restoration to prove that the circumstances warrant it and to address the potential prejudice that could befall third parties.

BVI insolvency law in 60 seconds
British Virgin Islands | November 06 2015

Insolvency law in the British Virgin Islands is almost entirely codified in the Insolvency Act and supplemented by the Insolvency Rule. The Insolvency Act was modelled largely on the UK Insolvency Act, but with a number of key differences. This update summarises its features, including provisions for insolvency, liquidation, priority, set-off, challengeable transactions, misfeasance and receiverships.

Amendments to companies legislation introduces examinership
Cyprus | September 25 2015

The near collapse of the Cypriot economy resulted in new legislation which introduced the examinership procedure, which is essentially a rescue process. The procedure purports to strike a balance among creditors based on the idea that the fate of a company and the parties that depend on it should not rest solely in the hands of secured creditors to the disadvantage of less protected parties.

Insurance

British Virgin Islands insurance legislation overhauled
British Virgin Islands | October 27 2015

The British Virgin Islands has gazetted the Virgin Islands Insurance (Amendment) Act 2015 and the Insurance Amendment Regulations 2015. These acts have been introduced to modernise the provision of insurance business in and from the British Virgin Islands. Some significant changes will open up new opportunities and improve functionality for both captives and insurers.

International Trade

Iran sanctions to be repealed in line with EU/UK position
British Virgin Islands | September 23 2016

Under the Joint Comprehensive Plan of Action, the European Union and the United Kingdom agreed to terminate or relax nuclear-related economic and financial sanctions, including related designations. Once the BVI 2011 direction is repealed, the British Virgin Islands' position will be further aligned with that of the United Kingdom and be in keeping with the relaxation of the Iran restrictions.

Litigation

Latin America focus: litigating trusts disputes in the British Virgin Islands
British Virgin Islands | May 09 2017

The British Virgin Islands has long been hailed as a leading offshore jurisdiction for wealth management and asset protection among Latin American high-net-worth families and individuals. The outcome in a recent case augments the credibility of the British Virgin Islands as a jurisdiction in this regard. The case also highlights the strengths of the BVI-only Virgin Islands Special Trust Act trust structure.

Commercial Court appoints three new judges
British Virgin Islands | January 24 2017

There have recently been three judicial appointments to the Commercial Court designed to increase the capacity of the court in 2017. The appointments should provide further momentum and expertise to the BVI Commercial Division and enhance the court's ability to deal with complex cases promptly and effectively.

Widening the net: court expands post-judgment Norwich Pharmacal jurisdiction
British Virgin Islands | December 13 2016

A BVI court recently issued an important judgment in relation to the obligations of a registered agent to provide third-party disclosure to assist a foreign judgment creditor to trace assets. The court held that Norwich Pharmacal relief post-judgment in aid of enforcement is, in principle, available where there is reasonable suspicion that a disclosure defendant is involved in the wilful evasion of another's judgment debt and to assist in securing compliance with freezing orders, both domestic and foreign.

BVI leave requirements in derivative actions by foreign companies
British Virgin Islands | November 01 2016

The BVI Commercial Court recently considered a claim for costs of a discontinued strike-out application, which was brought by the defendants as part of an ongoing multi-jurisdictional family dispute. The claimant's substantive action in the British Virgin Islands involved derivative proceedings, which were brought on behalf of a foreign company, for the recovery of funds which the defendants were alleged to have wrongfully paid to another entity.

Costs clarity: Commercial Court finds foreign lawyers' costs generally recoverable
British Virgin Islands | August 30 2016

The BVI Commercial Court recently handed down new guidance which clarifies its position on the recoverability of foreign lawyers' costs and underlines its clear intent to accommodate and provide practical solutions for international litigation in the British Virgin Islands.

At what costs? Ruling raises questions about BVI Legal Profession Act
British Virgin Islands | June 28 2016

The Court of Appeal was recently asked to adjudicate on the costs of a foreign firm that had assisted BVI practitioners in an application for security for costs. The respondents objected to these costs being recovered, on the basis that the firm's lawyers were not licensed to practise BVI law under the Legal Profession Act. The court agreed. However, in seeking to settle the law in this area, the decision has opened up further questions.

Shareholder disputes: when is just and equitable liquidation appropriate?
British Virgin Islands | September 01 2015

Unfair prejudice claims have been commonplace in the British Virgin Islands since the introduction of bespoke provisions in the BVI Business Companies Act, and have all but replaced old-fashioned just and equitable winding-up petitions. However, in Wang Zhongyong v Union Zone Management Limited the Court of Appeal for the first time considered a standalone just and equitable petition brought under Section 162 of the Insolvency Act.

Private Client & Offshore Services

Latin America focus: litigating trusts disputes in the British Virgin Islands
British Virgin Islands | May 04 2017

The British Virgin Islands has long been hailed as a leading offshore jurisdiction for wealth management and asset protection among Latin American high-net-worth families and individuals. The outcome in a recent case augments the credibility of the British Virgin Islands as a jurisdiction in this regard. The case also highlights the strengths of the BVI-only Virgin Islands Special Trust Act trust structure.

Amended anti-money laundering and terrorist financing code gazetted
British Virgin Islands | April 27 2017

Schedule 2 of the Anti-money Laundering and Terrorist Financing Code of Practice 2008 sets out a list of jurisdictions with laws and regulations similar to those of the British Virgin Islands. The principal advantage of relying on Schedule 2 is that business coming from recognised jurisdictions will generally attract the application of reduced client due diligence measures.

CRS notification and reporting deadlines extended
Cayman Islands | April 06 2017

The 2017 deadlines for notification and reporting obligations under the Common Reporting Standard regulations will be extended by two months. Cayman reporting financial institutions will not have notification or reporting obligations under the UK Crown Dependency and Overseas Territories International Tax Compliance Regulations from 2017 onwards; however, obligations under the US Foreign Account Tax Compliance Act remain unchanged.

Cayman Islands to introduce LLPs
Cayman Islands | March 30 2017

Draft legislation was recently published to introduce the limited liability partnership (LLP) as a new partnership vehicle in the Cayman Islands. The bill provides for the formation, registration and operation of an LLP as an entity with limited liability and legal personality separate from its partners. The bill also provides for the conversion of existing Cayman partnerships into LLPs and the continuation of foreign LLPs into the Cayman Islands.

Introduction of beneficial ownership registers proposed
Cayman Islands | March 16 2017

The government recently published draft legislation which, when adopted, will require Cayman companies to maintain beneficial ownership registers and for the information in the registers to be made automatically available to the Cayman Islands competent authority through a centralised beneficial ownership platform. The legislation is now expected to pass through the usual approval process in the Legislative Assembly.

Government introduces bill to establish ITA as a statutory body
British Virgin Islands | March 02 2017

New legislative proposals aim to establish the BVI International Tax Authority (ITA) as a fully fledged independent government institution, giving it autonomy over the performance of its functions. Key features of the bill include the implementation of a board of directors and the provision of immunity to the ITA and its officers from suit in relation to the performance of their functions, duties and powers.

Dissenting shareholder claims – video
Cayman Islands | February 23 2017

Mergers are a favoured method of takeover or restructuring in the Cayman Islands. The recent Grand Court decision in Integra – discussed in this video – provides much-needed guidance on what considerations should be taken into account in determining fair value, which is likely to provide comfort to parties seeking to explore the Cayman Islands merger framework.

Amended CRS regulations adopted
Cayman Islands | February 16 2017

The Cayman Islands' commitment to international transparency standards has been reinforced by its adoption of amended Common Reporting Standards (CRS) regulations. All Cayman financial institutions must review their existing CRS compliance policies and update them to make sure that they have suitable policies and procedures in place, and that they are correctly registered and able to file any nil returns needed in May 2017.

Government increases taxes on tobacco, alcohol and hotel accommodation
British Virgin Islands | February 02 2017

The government recently enacted two revenue-increasing measures: the Customs Management and Duties (Amendment of Schedule 4) Order 2016 and the Hotel Accommodation (Taxation) (Amendment) Act 2016. The order raises the duty on alcohol and tobacco, while the act seeks to increase the existing hotel accommodation tax to bring the British Virgin Islands into line with other premier holiday destinations in the Caribbean, although the rate is still less than that in many US destinations.

Commercial Court appoints three new judges
British Virgin Islands | January 26 2017

There have recently been three judicial appointments to the Commercial Court designed to increase the capacity of the court in 2017. The appointments should provide further momentum and expertise to the BVI Commercial Division and enhance the court's ability to deal with complex cases promptly and effectively.

New trusts legislation
Cayman Islands | January 12 2017

The Trusts (Amendment) Law 2016, which was recently gazetted, has amended and modernised the existing Cayman Islands Trusts Law. Along with provisions addressing certain powers and the appointment and discharge of trustees, the law introduces a number of retrospective provisions, covering trustees, Special Trust Alternative Regime trusts and charitable purposes.

FSC issues new guidelines on money services business
British Virgin Islands | January 12 2017

The Financial Services Commission recently published a guide to ensure that money service business providers and the wider industry are protected by helping to sensitise various stakeholders on matters surrounding money laundering, terrorist financing and other forms of financial crime. The guide touches on customer due diligence, the implementation of internal controls, suspicious activity reports and record keeping, and outlines relevant legislation.

New enforcement powers for CIMA
Cayman Islands | December 15 2016

The Cayman Islands government is set to grant the Cayman Islands Monetary Authority (CIMA) new enforcement powers under an amendment to the Monetary Authority Law. If passed in its existing form, the Monetary Authority (Amendment) Bill 2016 will allow CIMA to impose fines for breaches of regulatory laws by licensed or regulated individuals or entities.

Widening the net: court expands post-judgment Norwich Pharmacal jurisdiction
British Virgin Islands | December 08 2016

A BVI court recently issued an important judgment in relation to the obligations of a registered agent to provide third-party disclosure to assist a foreign judgment creditor to trace assets. The court held that Norwich Pharmacal relief post-judgment in aid of enforcement is, in principle, available where there is reasonable suspicion that a disclosure defendant is involved in the wilful evasion of another's judgment debt and to assist in securing compliance with freezing orders, both domestic and foreign.

New guidance notes on CRS requirements released
British Virgin Islands | December 01 2016

The British Virgin Islands has released guidance notes on the requirements of the Common Reporting Standards (CRS) as implemented in the British Virgin Islands. This is welcome news as, until now, there has been no BVI-specific guidance. The additional guidance has provided certainty on some key points, as well as a wealth of commentary and guidance on the specific interpretation of the CRS.

Court clarifies ranking of shareholder claim
Cayman Islands | November 17 2016

The Cayman Islands Court of Appeal recently provided some clarity on the ranking of priority in the liquidation of amounts owing to shareholders and former shareholders of a company operating as an open-ended investment fund. The decision has confirmed that Section 37(7)(a) of the Cayman Islands Companies Law applies where a shareholder has merely accrued the right to redeem his or her shares, but has not yet completed the redemption process prescribed by the company's articles.

An unusual choice? BVI restricted purposes company
British Virgin Islands | November 17 2016

Restricted purposes companies offer certain advantages and are a valuable facet of the British Virgin Island's offerings to international finance. While restricted purposes companies are intentionally niche and specialised, they prove that there remains a place in the contemporary legal world for more traditional principles of common law, such as restricted purposes and constructive notice.

Green light for liquidators to draw interim payments without fee approval
British Virgin Islands | November 10 2016

The BVI Commercial Court recently clarified whether the BVI Insolvency Act 2003 provides a basis for liquidators to draw fees on account before having formal approval from either a creditors' committee or the court. The court also specifically provided that newly appointed liquidators can draw payments of up to 80% on account of their reasonable remuneration and expenses on an interim basis without the need to obtain prior approval from the creditors' committee or the court.

Five questions lenders should ask before contracting with BVI counterparties
British Virgin Islands | November 03 2016

Lenders of BVI contracting parties are often concerned with whether the company with which they are contracting has the capacity to enter into the transaction. However, there are a number of other questions which prudent lenders should address, and they would be wise to seek specialist advice before entering into contractual arrangements with a BVI company.

BVI leave requirements in derivative actions by foreign companies
British Virgin Islands | October 27 2016

The BVI Commercial Court recently considered a claim for costs of a discontinued strike-out application, which was brought by the defendants as part of an ongoing multi-jurisdictional family dispute. The claimant's substantive action in the British Virgin Islands involved derivative proceedings, which were brought on behalf of a foreign company, for the recovery of funds which the defendants were alleged to have wrongfully paid to another entity.

Key considerations for using BVI structures in art-secured lending
British Virgin Islands | October 13 2016

The growth of the art-secured lending market has been accompanied by a parallel increase in the array of financial products and services specifically crafted for art collectors and dealers. As companies incorporated in the British Virgin Islands are among the most popular offshore holding structures in the world, it is not uncommon for art to be owned through BVI structures. For both borrowers and lenders, there are many advantages in doing so.

E-signatures: flexibility in cross-border transactions
British Virgin Islands | October 06 2016

The European Union's legal framework for e-signatures recently came into effect via the eIDAS Regulation. The British Virgin Islands was one of the first jurisdictions to recognise the validity of e-signatures and electronic records. Along with other BVI statutory developments, the BVI Electronic Transactions Act 2001 provides flexibility in cross-border transactions involving BVI companies.

Brexit: the fall-out
British Virgin Islands | September 29 2016

Once the United Kingdom has left the European Union, the British Virgin Islands will cease to be one of the European Union's overseas countries and territories. Despite Brexit's uncertainties, the good news for the British Virgin Islands is that it has carefully drafted legislation and a stable legal system, so the consequences of Brexit will be minor from a legal and constitutional perspective.

Iran sanctions to be repealed in line with EU/UK position
British Virgin Islands | September 22 2016

Under the Joint Comprehensive Plan of Action, the European Union and the United Kingdom agreed to terminate or relax nuclear-related economic and financial sanctions, including related designations. Once the BVI 2011 direction is repealed, the British Virgin Islands' position will be further aligned with that of the United Kingdom and be in keeping with the relaxation of the Iran restrictions.

Confidential Information Disclosure Law published
Cayman Islands | September 22 2016

The new Confidential Information Disclosure Law modernises the Cayman Islands' approach to confidential information, doing away with the criminal penalties which accompanied its predecessor and bringing the deliberations over breach of confidence into the realm of the rules of equity and common law. The law includes a new exemption through which disclosure of confidential information is permitted, essentially introducing a 'whistleblowing' defence for disclosures made in good faith.

Costs clarity: Commercial Court finds foreign lawyers' costs generally recoverable
British Virgin Islands | September 01 2016

The BVI Commercial Court recently handed down new guidance which clarifies its position on the recoverability of foreign lawyers' costs and underlines its clear intent to accommodate and provide practical solutions for international litigation in the British Virgin Islands. The decision will give considerable comfort to those already engaged in matters before the court and to those advising on launching proceedings in the British Virgin Islands.

New York Supreme Court rules derivative claims under Cayman law must first go through Cayman courts
Cayman Islands | August 25 2016

A recent decision by the Supreme Court of New York Appellate Division has affirmed that the law of the Cayman Islands applied on the question of the law applicable to derivative claims brought by a shareholder of a Cayman Islands company in the New York jurisdiction. Any shareholder of a Cayman Islands company that wishes to bring a derivative action must commence the action in the Cayman Islands.

Mergers and fair value: what does it mean to a dissenting shareholder?
Cayman Islands | July 14 2016

Shareholders in a company that is the subject of a takeover and merger have certain intrinsic rights available to them in the event that they dissent to the merger, most notably a right to have their shares purchased at a 'fair value'. The Cayman courts will approach the issue of fair value on the individual facts; the starting point is a valuation approach on the basis of no discount or premium attributable to the merger itself.

At what costs? Ruling raises questions about BVI Legal Profession Act
British Virgin Islands | June 23 2016

The Court of Appeal was recently asked to adjudicate on the costs of a foreign firm that had assisted BVI practitioners in an application for security for costs. The respondents objected to these costs being recovered, on the basis that the firm's lawyers were not licensed to practise BVI law under the Legal Profession Act. The court agreed. However, in seeking to settle the law in this area, the decision has opened up further questions.

Cayman legislative changes demonstrate commitment to global transparency
Cayman Islands | June 02 2016

The spotlight of the international community is shining more brightly than ever on international financial centres and those that use them, in an effort to reduce aggressive tax avoidance and tax evasion. To assist global efforts to tackle tax evasion and corruption and to increase transparency, the government has amended the Companies Law and proposed a fundamental overhaul of its confidentiality laws.

Extension of compliance period under AML Regulations 2008
British Virgin Islands | May 26 2016

The Anti-money Laundering (AML) (Amendment) Regulations 2015 recently came into effect, amending the AML Regulations 2008. The schedule to the new regulations provides a date of compliance for every 'relevant person' conducting 'relevant business', subject to any extension of time sought. The Financial Services Commission recently issued guidance notes which modify the compliance date and outline the conditions of applying for an extension.

Appointment of receivers in the British Virgin Islands
British Virgin Islands | April 28 2016

The receiver arguably represents the most powerful weapon in the armoury available for asset tracing in the British Virgin Islands. As BVI companies are often used as holding vehicles, using a receiver to take control of the corporate structure and move 'downstream' to the assets is a particularly potent strategy. Recent developments in case law have made this remedy more widely available.

Black Swan: standalone injunctions in support of foreign proceedings
British Virgin Islands | April 21 2016

BVI courts have jurisdiction to grant standalone injunctions (or Black Swan orders) in support of foreign proceedings. These are 'standalone' in the sense that an injunction order can be made where no other substantive relief is sought within the jurisdiction. A Black Swan order is a helpful tool in support of proceedings where an applicant or claimant has instigated – or intends to instigate – proceedings in a foreign jurisdiction.

Fairfield Sentry – new guidance from BVI Court
British Virgin Islands | March 31 2016

The Fairfield Sentry saga continued recently with a new BVI judgment concerning the status of the related US Bankruptcy Court proceedings. The applicants were former registered shareholders of the Fairfield Sentry and Fairfield Lambda BVI feeder funds which had redeemed their shares before Bernard Madoff's fraud was exposed. They sought to prevent the liquidators of the funds from recovering their redemption payments in the US proceedings.

Exercise of discretion to wind up company not "head-counting exercise"
British Virgin Islands | March 24 2016

The BVI High Court recently confirmed that the exercise of the court's discretion whether to make, dismiss or adjourn an order appointing liquidators does not necessarily depend on the wishes of the majority of creditors – even when a vast majority of unsecured creditors both in number and by value oppose the appointment of liquidators.

Key points for lenders and borrowers: snapshot of changes to BVI law in 2015
British Virgin Islands | March 03 2016

The British Virgin Islands' reputation as the leading offshore jurisdiction is well earned and it is dedicated to maintaining its status as a creditor-friendly and commercially flexible jurisdiction. The developments of 2015 are the latest example of its evolution, and include provisions of the BVI Business Companies (Amendment) Act 2015 that relate to registered agents, liquidation, continuing out, execution of deeds and private registers of charges.

FSC recognises overseas stock and commodities exchanges
British Virgin Islands | February 25 2016

The Financial Services Commission (FSC) recently issued the Regulatory Code (Recognised Exchanges) Notice under powers set out in the Regulatory Code. The recognised exchanges listed include some of the most important stock and commodity exchanges in the world. Companies listed on recognised exchanges can benefit from light-touch know-your-customer due diligence processes when dealing with BVI-regulated credit or financial institutions.

Arbitration agreements and insolvency proceedings
British Virgin Islands | February 11 2016

Two recent decisions examined attempts by debtors to rely on the mandatory stay provisions in the BVI arbitration legislation in order to avoid liquidation. On both occasions the court came down decisively against the debtors, which were unable to show a substantive dispute to the debt. The decisions have brought clarity to the situation and closed the door on a potentially abusive practice.

Much-anticipated Cayman LLC bill introduced
Cayman Islands | February 04 2016

A bill was recently published for the creation of a new law permitting formation of the new Cayman limited liability company (LLC) corporate vehicle. The creation of the Cayman LLC is eagerly anticipated by the investment funds industry, as it will provide the market with a corporate vehicle that is closely aligned with the Delaware LLC and is more flexible than the vehicles presently used for structuring purposes.

Islamic finance continues to grow in the British Virgin Islands
British Virgin Islands | February 04 2016

As the Islamic finance market grows and matures, international financial centres such as the British Virgin Islands are being used to facilitate the structuring of Islamic finance products and transactions such as sukuk and musharakah and the incorporation of investment funds and corporate structures. BVI companies are also used by Islamic high-net-worth individuals and families as holding companies for assets in developed markets.

China Shanshui: change of direction for company winding-up petitions
Cayman Islands | January 07 2016

A widely discussed recent Cayman Grand Court decision declined to follow the precedent set in Re China Milk Products Group Ltd, instead striking out a winding-up petition filed by the directors of China Shanshui Cement Group Limited for lack of standing. The decision re-establishes the principles set out in the English case of Re Emmadart Ltd as good law in the Cayman Islands.

Changes to BVI anti-money laundering regime
British Virgin Islands | January 07 2016

The British Virgin Islands has announced amendments to its anti-money laundering regime in order to ensure continued compliance with the developing international standards on transparency and anti-money laundering regimes. The changes have the most impact on the eligible introducer regime – in particular, where a BVI-registered agent relies on third-party introducers to obtain and verify the identity of the client.

Notification requirements under Companies Law amended
Cayman Islands | December 10 2015

The Companies (Amendment) Law 2015 has come into effect and will have potential application to all Cayman companies. The law amends the sections of the Companies Law (2013 Revision) which deal with notification of appointments and changes of directors. The law now requires companies to notify the Registrar of Companies within 60 days of first appointments and any subsequent changes in the register of directors and officers.

BVI Business Companies (Amendment) Act 2015: a summary
British Virgin Islands | December 10 2015

The government recently gazetted the BVI Business Companies (Amendment) Act 2015. If passed into law as expected, it will be the 13th amendment to the BVI Business Companies Act. A number of the proposed changes will dovetail with the recently announced new premium service function at the Companies Registry to facilitate time-sensitive, complex and special transactions, such as continuations to facilitate more difficult commercial transactions.

Cayman Islands insolvency law in 60 seconds
Cayman Islands | December 03 2015

Insolvency law is principally regulated by the Companies Law and the Companies Winding Up Rules 2008, supplemented by a wide body of case law. This update summarises their features, including provisions on insolvency, commencement, appointment of a liquidator, priority, set-off, challengeable transactions, misfeasance, debt restructuring schemes, accreditation and cross-border issues.

Voluntary liquidation: an almost irreversible procedure
British Virgin Islands | November 26 2015

Can a company that has been voluntarily wound up be restored to good standing on an application by a former shareholder, liquidator or director who has a change of heart regarding the company's liquidation? A recent High Court decision confirmed the BVI position that the onus is on the claimant seeking restoration to prove that the circumstances warrant it and to address the potential prejudice that could befall third parties.

BVI insolvency law in 60 seconds
British Virgin Islands | November 05 2015

Insolvency law in the British Virgin Islands is almost entirely codified in the Insolvency Act and supplemented by the Insolvency Rule. The Insolvency Act was modelled largely on the UK Insolvency Act, but with a number of key differences. This update summarises its features, including provisions for insolvency, liquidation, priority, set-off, challengeable transactions, misfeasance and receiverships.

British Virgin Islands insurance legislation overhauled
British Virgin Islands | October 29 2015

The British Virgin Islands has gazetted the Virgin Islands Insurance (Amendment) Act 2015 and the Insurance Amendment Regulations 2015. These acts have been introduced to modernise the provision of insurance business in and from the British Virgin Islands. Some significant changes will open up new opportunities and improve functionality for both captives and insurers.

Impact of side letters on core provisions of Cayman Islands funds
Cayman Islands | October 15 2015

The Cayman Islands Court of Appeal recently issued a decision concerning the impact of side letters on the constitutional arrangements of Cayman funds. One of the critical questions raised by the case was whether a side letter was enforceable when made between the investment manager of a fund and an individual institutional investor in that fund, where the investment manager had no actual or ostensible authority to make it.

Opt-in regimes introduced for EU AIFM Directive compliance
Cayman Islands | September 10 2015

Developments regarding EU investor access to non-EU alternative investment funds or EU alternative investment funds managed by non-EU managers have been the source of debate, mainly as a result of the EU Alternative Investment Fund Managers Directive. The Cayman Mutual Funds Law and Securities Investment Business Law were recently amended in order to provide for 'opt-in' regimes in relation to the directive.

Stand by for take-off: Cape Town Convention extension date confirmed
Cayman Islands | September 03 2015

The United Kingdom has confirmed that the Cape Town Convention will come into force on November 1 2015. On that date the Cayman Islands will gain the status of a territorial unit of a convention state. In anticipation, Cayman authorities have been preparing the legislation necessary to bring the Cape Town Convention into force so that it interacts harmoniously with existing Cayman registration regimes.

Shareholder disputes: when is just and equitable liquidation appropriate?
British Virgin Islands | September 03 2015

Unfair prejudice claims have been common since the introduction of bespoke provisions in the Business Companies Act and have all but replaced old-fashioned just and equitable winding-up petitions. However, in Wang Zhongyong v Union Zone Management Limited the Court of Appeal for the first time considered a standalone just and equitable petition brought under Section 162 of the Insolvency Act.

Asset tracing in the British Virgin Islands
British Virgin Islands | July 09 2015

Confidentiality of corporate documents and information is one of the key attractions of incorporating a company in the British Virgin Islands. In light of this, what means are available to a party in the British Virgin Islands which seeks to recover property that has been misappropriated, where the identity of the wrongdoer or the whereabouts of the misappropriated property is unknown?

Appointing an inspector: viable alternative to liquidation?
Cayman Islands | July 09 2015

The means of redress available to unfairly treated shareholders in the Cayman islands are limited. However, under the Companies Law, the Grand Court can appoint inspectors to examine into the affairs of any company and report thereon, on application of one of the company's shareholders. In some instances the appointment of an inspector is the most timely and cost-effective solution to a dispute.

For the record: British Virgin Islands Trustee (Amendment) Act 2015
British Virgin Islands | May 28 2015

The BVI Trustee (Amendment) Act has added new obligations for trustees to maintain trust records into the BVI Trustee Ordinance. The new section is not groundbreaking, but the penalties for non-compliance are punitive and trustees should take steps to ensure full adherence. Further, they should be careful not to fall foul of a number of unclear aspects of the provisions.

Outsourcing arrangements for funds service providers: draft statement of guidance
Cayman Islands | May 28 2015

The Cayman Islands Monetary Authority (CIMA) recently released the draft Statement of Guidance: Outsourcing All Regulated Entities (Excluding Regulated Mutual Funds) and a corresponding consultation paper. The statement of guidance is relevant to all entities that are regulated by CIMA in the Cayman Islands and is a welcome step towards improving the clarity of CIMA's regulatory policy concerning outsourcing arrangements.

Privy Council clarifies power to rectify share registers of BVI companies
British Virgin Islands | May 21 2015

The Privy Council recently handed down a decision clarifying the power of the courts to rectify the share register of a BVI company under Section 43(1)(a) of the Business Companies Act 2004. The judge confirmed that the primary issue was the validity of the contract, and that the question of which court was the most appropriate forum should be viewed as a matter of contract rather than company law.

Money Laundering Regulations make Cyprus equivalent jurisdiction
Cayman Islands | May 21 2015

The Cayman Islands has gazetted an amendment to the Money Laundering Regulations to include Cyprus in the Third Schedule to the regulations, which lists countries and territories with equivalent legislation for anti-money laundering purposes. The inclusion means that the Cayman Islands now recognises Cyprus as a jurisdiction with anti-money laundering legislation which is equivalent to that of the Cayman Islands.

Portal registration deadline extended
Cayman Islands | April 16 2015

The Cayman Islands Department of International Tax Cooperation recently released an update on the status of the Cayman Automated Exchange of Information Portal and the requirement for Cayman financial institutions to register with the Cayman Islands Tax Information Authority. The deadline for registration has been postponed to April 30 2015.

Weavering: appeal court judgment clears directors of wilful default
Cayman Islands | February 26 2015

The Court of Appeal has handed down a long-awaited judgment in a case measuring the liability of directors. The case sent shockwaves through the funds industry in Cayman and the offshore world when it was decided at first instance. The Court of Appeal's judgment allowed the appeal and set aside the order of the trial judge, which had ordered the directors to pay damages of $111 million.

Seeking fair value: court provides guidance for appraisers valuing shares
British Virgin Islands | February 19 2015

The BVI Commercial Court recently issued important guidance to accountancy professionals, BVI companies and their shareholders as to how shares should be valued following a squeeze-out, merger or dissent from other restructuring provisions. The decision is consistent with the court's proactive stance in assisting parties utilising the restructuring mechanisms provided under the act.

Power to assist foreign insolvency proceedings
British Virgin Islands | December 18 2014

Since Rubin v Eurofinance, enforcement of judgments in insolvency proceedings is no longer elevated above that of other foreign judgments. However, Singularis Holdings Limited v PricewaterhouseCoopers demonstrates that the ability of foreign office holders to seek assistance such as disclosure continues to develop, through both statute and the common law.

Law amended to facilitate grant of interim relief in aid of foreign proceedings
Cayman Islands | November 27 2014

New legislation recently came into force facilitating the granting of interim relief in aid of foreign proceedings. The Grand Court (Amendment) Law empowers the Grand Court to make an order appointing interim relief in respect of proceedings which have been or will be commenced in an overseas court and are capable of giving rise to a judgment which may be enforced in the Cayman Islands.

Arbitration Act 2013 now in force
British Virgin Islands | November 27 2014

The British Virgin Islands Arbitration Act 2013 recently came into force. The act – modelled on the UNCITRAL Model Law on International Commercial Arbitration – provides for the creation of the BVI International Arbitration Centre, as well as containing provisions concerning the construction of arbitration agreements, the composition of arbitration tribunals and the court's role in proceedings.

Contingency fee agreement authorised for litigation in foreign jurisdiction
Cayman Islands | November 20 2014

The Cayman Court has set out to clarify the circumstances in which it will sanction proposed litigation overseas funded by alternative funding agreements, including contingency fee ('no win, no fee') agreements. Although contingency fee agreements are unlawful in the Cayman Islands, the same restriction does not apply to litigation intended to be conducted in a jurisdiction where such agreements are permitted.

Japan-BVI TIEA comes into force
British Virgin Islands | November 20 2014

The Tax Information Exchange Agreement (TIEA) between Japan and the British Virgin Islands came into effect on October 11 2014. The BVI-Japan TIEA is consistent with the Organisation for Economic Cooperation and Development standard model template for TIEAs. It provides for assistance through exchange of information relevant to the administration or enforcement of the laws of both countries concerning taxes.

Litigants reminded of importance of appropriate security for costs
Cayman Islands | November 13 2014

In Caribbean Islands Development Ltd v First Caribbean International Bank Ltd the court sent a strong reminder to litigants of the importance of providing security for costs in a form appropriate for enforcement by a Cayman resident defendant, and thereby highlighted the dangers of proposing alternative solutions without the prior approval of the court.

Banking regulations further enhance appeal of the Cayman Islands
Cayman Islands | October 23 2014

The Cayman Islands Monetary Authority recently updated its Regulatory Policy on Licensing Banks. The policy provides clear distinctions between the requirements for home-regulated and host-regulated banks, and covers capital adequacy, information about shareholders and their financial resources, business plans, internal systems and management.

Priority and statutory ship mortgages in the British Virgin Islands
British Virgin Islands | October 23 2014

The British Virgin Islands has two regimes for the registration of ship mortgages and determination of their priority: the Merchant Shipping Act and the BVI Business Companies Act. In an enforcement action, liquidation or other situation in which priority is a relevant factor, there is the potential for conflict in determining priority if lenders opt to register their security interests under either regime, as opposed to both.

Contracts (Rights of Third Parties) Law 2014 now in force
Cayman Islands | October 02 2014

The Contracts (Rights of Third Parties) Law 2014 has come into force. Subject to certain exemptions, the law allows for the direct enforcement of contractual rights by third parties in contracts to which they are not a party. Previously, contracts governed by Cayman law could be enforced only by parties to the contract, following the common law doctrine of privity of contract.

Director Registration and Licensing Law gazetted
Cayman Islands | September 25 2014

The Director Registration and Licensing Law 2014 was recently gazetted along with the related regulations, which set out in more detail the registration requirements and fees. The law sets out three categories of director: registered directors, professional directors and corporate directors.

Exempted Limited Partnership Law revised
Cayman Islands | September 18 2014

The government has passed into law substantial revisions to its exempted limited partnership legislation in the form of the Exempted Limited Partnership Law 2014. The exempted limited partnership remains the favoured form of Cayman entity for the establishment of private equity, venture capital and real estate funds, as well as continuing to be used for both hedge funds and joint venture transactions.

Draft FATCA guidance notes published
British Virgin Islands | September 04 2014

In the latest move towards the implementation of the Foreign Account Tax Compliance Act intergovernmental agreements signed by the British Virgin Islands with the United States and the United Kingdom, the BVI government has released draft guidance notes for public consultation.

Courts consider arbitration agreements and default judgments
British Virgin Islands | August 28 2014

Recent decisions have looked at two aspects of offshore litigation: the impact of arbitration agreements and default judgments. One decision reaffirmed that the language of an arbitration clause must make the resolution of disputes by arbitration mandatory, while another showed that a party served with a BVI claim which fails to take any steps in the proceedings faces the risk of having a default judgment entered against it.

National risk assessment scheduled
British Virgin Islands | July 24 2014

The British Virgin Islands is scheduled to undergo its fourth round of mutual evaluation by the Caribbean Financial Action Task Force in 2017, based on the Financial Action Task Force's International Standards on Combating Money Laundering and the Financing of Terrorism and Proliferation. The Cabinet has established the National Risk Assessment Council to manage this process effectively.

BVI government signs Model 1B IGA in relation to FATCA
British Virgin Islands | July 17 2014

The BVI government has signed a Model 1B (non-reciprocal) inter-governmental agreement in relation to the US Foreign Account Tax Compliance Act. As expected, the final inter-governmental agreement is in substantially the same form as the model agreement. However, a number of special provisions deal with the treatment of BVI retirement plans.

Financial institutions now able to obtain a GINN
British Virgin Islands | May 29 2014

The US Internal Revenue Service (IRS) recently announced that financial institutions in jurisdictions that have already reached an "agreement in substance" on the terms of a Model 1 or Model 2 Intergovernmental Agreement (including the British Virgin Islands) can now register with the IRS and obtain a global intermediary identification number, notwithstanding that the agreement is yet to be signed.

BVI concludes Foreign Account Tax Compliance Act negotiations
British Virgin Islands | May 08 2014

The BVI government recently announced the conclusion of negotiations with the United States on a Model 1 Intergovernmental Agreement under the US Foreign Account Tax Compliance Act. In a statement the Ministry of Finance of the BVI government said the final text of the agreement had been initialled, paving the way for its imminent signing and implementation.

Court ruling highlights potential risk in some standard form M&As
British Virgin Islands | May 01 2014

The Commercial Court recently handed down its ruling in C v W Inc. In that case a shareholder with more than 30% of the company's shares tried to exercise its power to requisition a shareholder meeting under Section 82(2) of the Business Companies Act 2004. However, the court held that in order to give effect to the requisition, a resolution of the board was required.

Door opened to foreign enforcement actions in the BVI
British Virgin Islands | March 06 2014

The law relating to the BVI courts' authority to enforce a foreign judgment has changed due to a successful court action in the Court of Appeal. The decision was quickly followed by a change in the civil procedure rules to reflect the judgment. The change in the law provides access to a raft of enforcement provisions such as charging orders, orders for sale and attachment orders.

The Commercial Court – interfacing with arbitration
British Virgin Islands | February 27 2014

Recent Commercial Court decisions have shaped the applicability and enforcement of arbitration clauses and how they interface with BVI statutory remedies and liquidations. Parties to arbitration should have one eye on the efficacy of future enforcement and be aware that blurred awards containing matters that may not properly have been subject of arbitration may prove to frustrate the ability to enforce in the British Virgin Islands.

BVI signs tax information exchange agreement with Poland
British Virgin Islands | February 20 2014

The BVI government entered into its 25th tax information exchange agreement with Poland on November 29 2013. The BVI-Poland agreement supplements similar treaties entered into by the British Virgin Islands in 2013 with Canada and Guernsey. This new treaty will enter into force three months after the completion of domestic implementation procedures by both the British Virgin Islands and Poland.

Multiple derivative actions: tried but not tested?
British Virgin Islands | January 09 2014

The Court of Appeal recently issued its ruling in Microsoft Corporation v Vadem Ltd. The judgment initially appears quite definitive – that "BVI law does not permit double derivative proceedings". However, the manner in which the case was presented and recent developments in English case law suggest that, while the BVI Business Companies Act 2004 does not provide for double derivative actions, at common law the jurisdiction may well live on.

New regulations for use of restricted words and phrases in company names
British Virgin Islands | November 07 2013

The Financial Services Commission has introduced new regulations for use of restricted words and phrases in company names. Under the guidelines, the registrar shall not register a company that contains a restricted word or phrase in its name unless the Financial Services Commission has granted prior written consent for its use.

Ready for business: following the EU AIFM Directive
British Virgin Islands | October 17 2013

Since the Phase II implementation of the EU AIFM Directive, interest in the directive has been as high as ever as investment fund managers seek to determine what effect it will have on their structures, as well as their ability to market within the European Union. This update serves as guidance on the BVI perspective and assesses the projected impact of the AIFM Directive om BVI funds.

BVI case notes
British Virgin Islands | September 12 2013

Recent cases from the BVI courts include further developments in Black Swan relating to free-standing relief, insolvency assistance to foreign office holders, economic torts and unjust enrichment and clarification of the meaning of 'member' under BVI company law.

Court clarifies the meaning of 'member' under the BVI Company Law
British Virgin Islands | September 05 2013

In a recent case the defendants' application for a stay in favour of arbitration in New York was refused because the defendants were not members of the respondent claimant company for the purposes of the articles of association and/or the BVI Business Companies Act 2004. The corollary of their inability to demonstrate membership was an absence of standing to invoke an arbitration clause in the articles of association.

Memoranda of understanding signed with 25 European countries
British Virgin Islands | August 15 2013

The BVI financial services regulators have announced memoranda of understanding with 25 European countries, which will enable the continued marketing of BVI funds throughout the majority of the European Union. The memoranda of understanding relate to the EU Alternative Investment Fund Managers Directive.

Commercial Court rules on third-party costs and freezing relief
British Virgin Islands | June 27 2013

Recent cases out of the BVI Commercial Court deal with issues including third-party costs and the applicability of Black Swan freezing relief in support of foreign derivative claims. The former has now become an authority for the proposition that a non-party cannot be liable for costs in proceedings where it has not been joined and which were not being conducted with its approval or for its benefit.

BVI signs new tax agreement with Canada
British Virgin Islands | June 20 2013

As evidence of its continued commitment to transparency in the financial services industry and its compliance with international standards, the British Virgin Islands has executed a much-anticipated tax information exchange agreement (TIEA) with Canada. The TIEA establishes a formal regime for the exchange of information between Canada and the British Virgin Islands relating to taxes and tax matters.

Derivatives, double derivatives and unfair prejudice
British Virgin Islands | May 09 2013

The BVI courts have recently handed down two decisions regarding the Business Companies Act. The first case concerned Microsoft's ability to bring a double derivative action in the Delaware Court of Chancery in the name of a BVI company. The second case involved the introduction of an unauthorised derivative claim into a personal claim by a shareholder. Both judgments provide greater clarity.

BVI launches approved manager regime for fund managers
British Virgin Islands | May 02 2013

A new 'regulation-light' fund manager regime recently came into effect. In addition to the Investment Business (Approved Manager) Regulations, which were published in 2012, the Financial Services Commission published the Approved Investment Managers Guidelines in January 2013. The new regime offers a welcome alternative to fund managers and advisers domiciled or doing business in the British Virgin Islands.

BVI to enter into FATCA Model I agreement with United States
British Virgin Islands | April 25 2013

Foreign financial institutions in all jurisdictions are required to report to the US Internal Revenue Service under the US Foreign Account Tax Compliance Act (FATCA). The BVI government recently announced that it will finalise a Model I intergovernmental agreement with the United States in response to FATCA. This is welcome news, as it will simplify FATCA compliance for a range of BVI financial institutions.

Court hands down key judgment on hedge fund insolvencies
British Virgin Islands | April 04 2013

A recent appeal court decision provided an important ruling on the question of where investors stand in the 'waterfall' of distributions in the liquidation of investment funds under BVI law. The court affirmed the widely held industry view that debts owed to former members for redemption proceeds confer on them deferred creditor status. The decision brings certainty and will be welcomed by investors and insolvency practitioners.

Court gives guidance on Section 175 procedure
British Virgin Islands | February 14 2013

Until recently, it was a matter of conjecture as to how the 'usual or regular course of business' exception to Section 175 of the Business Companies Act should be applied with respect to single purpose vehicles which hold a single asset. The BVI courts finally had an opportunity to express their view in on the matter in Ciban Management Corp.

Derivatives, double derivatives and unfair prejudice
British Virgin Islands | February 07 2013

In two recent cases the courts have considered the application of the Business Companies Act. In the first, Microsoft made an application for leave under Section 184C to bring a derivative claim in the Delaware Court of Chancery in the name of a BVI company; while in the second, the BVI High Court Commercial Division considered the issue of the interaction of Sections 184C and 184I of the act.

Obtaining information about a BVI company by court order
British Virgin Islands | December 06 2012

A search of the BVI Company Registry is likely to reveal only limited information. Thus, although confidentiality in BVI companies is still paramount, in limited circumstances a Norwich Pharmacal disclosure and production order can be obtained against third parties to identify, for example, the shareholders of BVI companies. Although rare, the courts have shown themselves willing to recognise such relief as a flexible and adaptable remedy.

Anticipating and avoiding shareholder disputes
British Virgin Islands | November 01 2012

Joint ventures will often involve a degree of commercial risk for the parties involved. In order to mitigate this risk as far as possible, shareholders should endeavour to anticipate and avoid common pitfalls when entering into a joint venture arrangement, and should be aware of the tactical options available to them should this relationship break down.

Indemnification and protection of company directors after resignation
British Virgin Islands | September 13 2012

A director has an element of control over a company, but once he or she resigns that is lost and it becomes important to have had in place an indemnification agreement. BVI law provides for directors, former directors and in certain cases other persons to be indemnified, and the applicable provisions are reasonably clear on this. However, the risks that former directors face after resignation are less clear.

Madoff feeder fund in major court reversal
British Virgin Islands | September 06 2012

In a series of decisions before the BVI Commercial Court and Eastern Caribbean Court of Appeal, the liquidators of Fairfield have suffered significant reversals in the claims against investors. The decisions are important for a number of reasons, including the staggering value of the claims.

White Collar Crime

Amended anti-money laundering and terrorist financing code gazetted
British Virgin Islands | May 01 2017

Schedule 2 of the Anti-money Laundering and Terrorist Financing Code of Practice 2008 sets out a list of jurisdictions with laws and regulations similar to those of the British Virgin Islands. The principal advantage of relying on Schedule 2 is that business coming from recognised jurisdictions will generally attract the application of reduced client due diligence measures.

Implementing EU anti-money laundering legislation in Cyprus
Cyprus | March 20 2017

Cyprus implements EU anti-money laundering directives through the Prevention and Suppression of Money Laundering Laws 2007 to 2013. The Advisory Authority for Combating Money Laundering is working with the local industry to transpose the EU Fourth Anti-money Laundering Directive and (in due course) the EU Fifth Anti-money Laundering Directive through amendments to domestic legislation.

Extension of compliance period under AML Regulations 2008
British Virgin Islands | May 30 2016

The Anti-money Laundering (AML) (Amendment) Regulations 2015 recently came into effect, amending the AML Regulations 2008. The schedule to the new regulations provides a compliance date for every 'relevant person' conducting 'relevant business', subject to any time extension sought. The Financial Services Commission recently issued guidance notes which modify the compliance date and outline the application conditions for an extension.

Changes to BVI anti-money laundering regime
British Virgin Islands | January 11 2016

The British Virgin Islands has announced amendments to its anti-money laundering regime in order to ensure continued compliance with the developing international standards on transparency and anti-money laundering regimes. The changes have the most impact on the eligible introducer regime – in particular, where a BVI-registered agent relies on third-party introducers to obtain and verify the identity of the client.

Asset tracing in the British Virgin Islands
British Virgin Islands | July 13 2015

Confidentiality of corporate documents and information is one of the key attractions of incorporating a company in the British Virgin Islands. In light of this, what means are available to a party in the British Virgin Islands which seeks to recover property which has been misappropriated, where the identity of the wrongdoer or the whereabouts of the misappropriated property is unknown?