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.
Interest in the setting up and distribution of initial coin offerings (ICOs) in the British Virgin Islands and other offshore locations has increased rapidly during 2017, and this is expected to continue. No ICO or blockchain-specific rules or guidelines have yet been issued by the government or regulator; however, there are several important issues for parties in the British Virgin Islands to consider, including the key laws and regulations surrounding the issue.
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.
The ability to continue a foreign company as a BVI company or to continue a BVI company as a company under the laws of another jurisdiction quickly and seamlessly is just one example of the many flexible features of the Business Companies Act 2004. This feature is particularly useful in the context of corporate reorganisations, and counsel should be aware of the process and requirements for continuations and discontinuations.
As the world's leading incorporation vehicles, BVI companies are listed on exchanges and conduct business around the world and may therefore expect to be occasionally involved in activist campaigns or other challenges from shareholders. However, many investors and their advisers may be less familiar with BVI company law than their domestic legislation.
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.
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.
The government recently enacted a measure regarding the fees payable for work permits in the British Virgin Islands. The amendment order replaces the employee flat fee system with an incremental calculation based on salary bands, which now generally assume a higher gross salary. It also replaces most exceptions to the previous scheme, keeping only those for domestic workers.
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.