BVI’s place in the corporate/M&A landscape of SE Asia

By Michael Gagie, Maples Group

2018 was a busy year for deal making across Southeast Asia, with clients utilizing both new and existing British Virgin Islands (BVI) companies as part of their deal structures. According to figures released by the BVI Financial Services Commission, the jurisdiction’s regulator, by the end of the third quarter, 2018, a total of 28,499 new BVI companies had been incorporated in 2018 – a significant increase on new incorporation numbers for the first three quarters of the two previous years.

We, in the Singapore office of the Maples Group, were fortunate to act on deals involving BVI entities across the region, and across sectors including fintech, biotech, resources, manufacturing and real estate for both foreign investors coming into the region and existing regional players disposing of, or acquiring, assets.

Using BVI companies in deal structures

Michael Gagie Managing Partner Maples Group in Singapore
Michael Gagie
Managing Partner
Maples Group in Singapore
Tel: +65 6922 8402

As readers will no doubt be aware, typically, BVI companies are used at the top of investment structures, either to act as the ultimate holding vehicle for an institution’s or an individual’s stake in an underlying business or asset, or as the conduit or joint venture for investment monies (for an investor group) to be made available to the underlying business.

The following provisions of the BVI Business Companies Act, the BVI’s corporate law statute, are attractive in this context:

  • The absence of the concept of share “capital” (and use of no par value shares) so that subscription monies and other monies available in the company can be fully utilized for the benefit of the business;iness;
  • In an investor group context, the ability of directors of a BVI company to act in the best interests of the shareholder (of the company) that appointed them (as opposed to the best interests of the BVI company itself);
  • Ability to declare and pay dividends and distributions subject only to a solvency determination from the directors of the company – no concepts of share capital or premium to contend with;
  • Ability to repurchase or redeem shares subject only to the solvency determination referred to above; and
  • Privacy of ownership information – while BVI law requires that director and shareholder information for all BVI companies (including ultimate beneficial ownership information) is maintained in the BVI, this information is not available to the general public.

In addition to the tangible benefits of the act itself, the BVI retains its “brand” appeal and it continues to be internationally recognized as a reliable jurisdiction for the facilitation of cross-border transactions in Southeast Asia and, in addition, both investors and financiers of that investment can take advantage of the local availability of BVI legal advice and related services from providers here in Southeast Asia to incorporate, navigate and advise their companies on all corporate related transactions.

Using mergers

In terms of trends within the market, increased M&A activity has prompted clients to look at all possible options open to them under the act. One route to an acquisition (that we have seen in both a public and a private company context) is the use of a merger of two or more companies to effect an acquisition of the ultimate underlying business. The act provides that a BVI company can merge with another BVI company or a foreign company (where the domicile of the foreign company provides for the merger concept).

Under the act, a merger requires the approval of both the directors of the company and the holders of in excess of 50% of the votes attaching to shares. The act provides shareholders with the opportunity to dissent from a merger vote put to the shareholder body, and the dissenting shareholder to seek a “fair value” payment from the company for their shares while the merger transaction itself (subject to being approved by the requisite number of votes) progresses.

A merger ensures that an acquirer will acquire a 100% interest in the BVI company as it applies to all shareholders, regardless of the size of their shareholding. Shareholders of the BVI company being acquired by way of merger will either vote to accept the merger consideration (which is often, but not always, a cash payment in exchange for their company shares) or will receive “fair value” by way of the dissenting shareholder process.


A change in Singapore company law, introduced in late 2017, led to a number of enquiries over the course of 2018 and into this year. Contingent on certain thresholds being reached (as set out in the relevant Singapore law), it is now possible to redomicile BVI companies from BVI to Singapore. BVI has had the concept of redomiciliation available under the act since its passage into law, and clients in a number of jurisdictions including the Cayman Islands, Delaware, Jersey and Luxembourg have utilized the reciprocity of the redomicile provisions of their own companies law to move companies into, and out of, the BVI.

HNWs & Family Succession Planning

A growing trend that we see is an increase in the number of enquiries relating to probate and succession matters involving BVI companies. Historically, a number of Asian-based clients incorporated their BVI companies as sole shareholder or sole director entities so that the patriarch, matriarch or founder of a family business holds the role both of decision maker and appointor of the decision maker in their personal capacity.

As the underlying businesses held by these BVI companies have, over time, grown and become more complex, thought now needs to be given as to how to structure the holding companies and provide for succession. BVI private trust companies and VISTA trusts offer business owners the ability to plan for succession while enabling them to retain some control over the management of the business.

In addition, the act’s flexibility in terms of its treatment of the holders of different classes of shares has led to increased creativity in the drafting of the rights provided to share classes in BVI companies, so that the founder of a business can look to retain the voting rights (and therefore management) of the company while providing that family members holding a different class of share or shares receive some of the economic benefits accruing to the holding company (via the profits and distributions of the underlying businesses), which are distributed up to the holding company level.

In some instances, we have worked with clients to look at ways to “trigger” a movement of voting and full economic rights from one share class to another upon the occurrence of a specific event – i.e., a sale or transfer of assets, or upon the incapacity of the founder.

With several general elections taking place in Southeast Asia during the course of 2019, and other global economic considerations at play, we fully expect to see clients engage in further deal activity across the region during the course of this year, and welcome the opportunity to promote the advantages of doing so utilising BVI companies.

Michael Gagie is a managing partner of Maples Group in Singapore. He can be contacted at


Maples and Calder (Singapore)
1 Raffles Place #36-01,
One Raffles Place,
Singapore 048616