Private Client & Offshore Services updates

Bahamas

Contributed by Lennox Paton
Payment of preferential debts out of assets subject to floating charge not permitted
  • Bahamas
  • October 26 2017

The Supreme Court recently considered whether preferential creditors have any claim against the moneys received by receiver-managers for the sale of assets subject to a charge. The court determined that a floating charge which crystallised before the making of a winding-up order takes priority over other creditors.

Privy Council clarifies Bahamian law on appealing interlocutory judgments
  • Bahamas
  • June 15 2017

There has been some debate over the lack of clarity regarding the concurrent jurisdiction of the Supreme Court and the Court of Appeal as to where and when applications for leave to appeal and stays should be made. A recent Judicial Committee of the Privy Council ruling has clarified this area of the law and given attorneys clear guidance regarding the proper procedure for appealing interlocutory judgments and applying for a stay pending appeal in the Bahamas.

Remittal of assets in cross-border insolvency proceedings
  • Bahamas
  • April 20 2017

The Bahamas Supreme Court recently considered the relationship between the statutory provisions in recognition proceedings which permit the turnover of property to a debtor (a foreign corporation or other foreign legal entity subject to a foreign proceeding in the country in which it is incorporated or established) and the common law power to direct remittal of assets to the foreign main proceedings where an ancillary liquidation is underway.

Hastings-Bass rule enshrined in law
  • Bahamas
  • April 13 2017

The recently enacted Trustee (Amendment) Act has clarified the law relating to trustee indemnities and given statutory effect to the rule in Re Hastings-Bass. With the passing of the act, the Bahamas has fortified its position as a leading offshore financial centre. It is expected that the codification of the rule will benefit trustees, protectors, beneficiaries and other persons who can apply to the court to unwind any perceived hard consequences flowing from an exercise of a fiduciary power.

Receiver-managers obtain court's blessing: self-dealing and fair-dealing rules not violated
  • Bahamas
  • December 15 2016

The joint receiver-managers of the assets of Baha Mar applied to the Supreme Court for a direction that the intended sale of Baha Mar's secured assets to a special purpose vehicle (SPV) would not amount to self-dealing or infringe the fair-dealing rule. The court was satisfied that the sale to the SPV was pursued by the joint receiver-managers in good faith and achieved after adequate precautions were taken to achieve the best price reasonably obtainable at the time.


Belize

Contributed by Courtenay Coye LLP
The importance of legal advice for timeshare rights
  • Belize
  • July 16 2015

The Supreme Court recently highlighted the need to comply strictly with essential legal requirements when investing in property abroad. It found that US citizens who had purchased timeshare interests in a residential resort could not exercise their purported rights in priority of a bank's mortgage interest on the property because they had not registered their timeshares or paid the required stamp duty.

Directors' indemnities foolproof
  • Belize
  • April 16 2015

The Belize Court of Appeal recently confirmed that indemnities given by a Belizean company to its directors deprived the company of a cause of action to pursue a claim against former directors for decisions taken during their term as company directors. Belize continues to recognise blanket indemnities given by a company to directors as legal.

Appeal Court clarifies procedural law on claims against foreign defendants
  • Belize
  • September 04 2014

The Belize Court of Appeal has provided guidance to litigants involved in multi-jurisdictional litigation. The court interpreted the rules applicable to commencing a claim against foreign defendants, and service of a claim form and interim injunction on parties outside the jurisdiction. Under the Civil Procedure Rules there is no need to obtain permission to issue a claim form for service abroad.

Enforcement of LCIA award refused as contrary to public policy
  • Belize
  • May 22 2014

The Caribbean Court of Justice has addressed the issue of whether New York Convention Awards should be enforced. The case is exceptional and should be confined to its unusual facts. However, it stands as highly persuasive authority for the proposition that violations of the constitutional order by a government when affording tax concessions to investors may afford a defence to enforcement of an arbitral award.

Caribbean Court of Justice rules government must arbitrate under treaty
  • Belize
  • August 08 2013

The Caribbean Court of Justice has delivered a landmark decision which narrows the circumstances in which a government may resort to its domestic courts to restrain international arbitration proceedings. The decision is an important victory for international investors in the Commonwealth Caribbean, since many bilateral investment treaties include clauses for resolution of disputes by international arbitration.


British Virgin Islands

Contributed by Harney Westwood & Riegels
Launching an ICO in British Virgin Islands
  • British Virgin Islands
  • December 14 2017

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.

BVI continuations and discontinuations – an overview
  • British Virgin Islands
  • October 26 2017

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 is particularly useful in the context of corporate reorganisations, and counsel should be aware of the process and requirements for continuations and discontinuations.

BVI exempts certain categories of people from work permit requirements
  • British Virgin Islands
  • September 07 2017

The government recently enacted the Labour Code (Work Permit Exemption) Order 2017, which excludes certain categories of people from the need to obtain work permits. In particular, the exemption for directors visiting the British Virgin Islands for board meetings supports the territory's position as the leading corporate domicile in the global economy.

Pacific Andes saga: forum shopping, Chapter 11 and just and equitable winding up
  • British Virgin Islands
  • August 31 2017

'Forum shopping' is the practice of choosing the most favourable jurisdiction in which to bring a claim. In principle, there is nothing wrong in seeking to have a case heard in the forum which is most favourable to the client. However, it can lead to some fierce jurisdictional battles, particularly in insolvency, where the choice between debtor and creditor-friendly procedures can be stark. The Commercial Court has been wrestling with this situation over the past 10 months.

Shareholder activism: considerations for BVI companies
  • British Virgin Islands
  • August 24 2017

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.


Cayman Islands

Contributed by Harney Westwood & Riegels LLP
Anti-money Laundering Regulations for unregulated investment and insurance entities to take effect
  • Cayman Islands
  • December 14 2017

Under new anti-money laundering legislation, the list of activities classed as relevant financial businesses has been expanded. Unregulated investment funds and some insurance entities have now been given a grace period until May 31 2018 to establish anti-money laundering compliance programmes. This is a welcome move, particularly for unregulated investment funds which were not bound by the preceding regulations and therefore may not have policies and procedures in place.

Foundation Companies Law enacted
  • Cayman Islands
  • November 23 2017

The Foundation Companies Law 2017, which recently came into force, approaches the creation of a foundation company in such a way that it may consequently be established for any lawful purpose. The foundation company shares many of its features with other types of Cayman company and fits seamlessly into the Cayman Islands' legal regime. It will therefore have the benefit of a considerable body of case law on companies.

New Anti-money Laundering Regulations come into force
  • Cayman Islands
  • November 16 2017

The government recently adopted updated Anti-money Laundering Regulations. The regulations demonstrate the Cayman Islands' ongoing commitment to comply with the highest international standards on combating money laundering and terrorist financing and aim to ensure consistency with the Financial Action Task Force 2012 recommendations. The move is part of an overall update of the territory's anti-money laundering regime.

Structuring an ICO through the Cayman Islands
  • Cayman Islands
  • November 02 2017

It seems that 2017 will be remembered as the year of the initial coin offering (ICO). The Cayman Islands is witnessing an upsurge in ICO-related business and structuring an ICO through the territory remains an attractive proposition. However, ICO-specific guidance is yet to be issued by the government or the regulator, and a number of legal uncertainties remain. Existing statutory and regulatory regimes must therefore be considered when structuring an ICO.

Beneficial ownership regime – an overview
  • Cayman Islands
  • October 19 2017

Under the Cayman Islands beneficial ownership legislation, certain Cayman companies are required to maintain details of their beneficial owners and relevant legal entities on a beneficial ownership register. Companies should determine whether they are within the scope of the legislation and familiarise themselves with the obligations for in-scope companies and those who hold interests in them.


Cyprus

Contributed by A G Paphitis & Co
Private investments in Cyprus – a bright future
  • Cyprus
  • December 14 2017

Cyprus saw its highest increase in gross domestic product in almost a decade in the first quarter of 2017. The dark days of the 2013 financial crisis appear to be in the past and foreign investment remains at the heart of government strategy, aided by factors such as the citizenship-by-investment programme, which will help to attract private investment in the property, retail and pharmaceutical sectors.

Tax residency can be obtained by staying in Cyprus for 60 days a year
  • Cyprus
  • September 07 2017

Foreign tax residents in Cyprus are exempt from taxation on their worldwide dividend and passive interest income. Parliament recently approved a bill granting tax resident status to individuals who spend at least 60 days a year in Cyprus, under certain conditions. Individuals who do not qualify as Cyprus tax residents under the 183-day rule now have the opportunity to consider the 60-day rule, which took effect on January 1 2017.

Cyprus international trusts – an overview
  • Cyprus
  • July 06 2017

Cyprus international trusts (CITs), also known as Cyprus offshore trusts, are regulated by the International Trusts Law, which complements the Trustees Law. CITs provide multiple benefits – such as anonymity, asset protection, flexibility and taxation incentives and benefits – which high-net-worth individuals around the world can use within the framework of their tax planning and investment strategies.

Cyprus offers tax exemption on worldwide income
  • Cyprus
  • June 01 2017

In order to provide high-net-worth individuals with additional incentives to relocate to Cyprus or continue conducting their business operations or investments in Cyprus, the government introduced non-domicile rules for the purposes of the Special Defence Contribution Tax Law. As a result, an individual may be resident, but not domiciled, in Cyprus. Tax residents who are not domiciled in Cyprus are exempted from the special defence contribution tax.