Maples chief sees Asian trend offshore

Michael Gagie

Maples Group’s new regional managing partner in Asia, Michael Gagie, sees the demand for incorporation of offshore vehicles from Asian companies continuing to grow.

Gagie, who was appointed to the role in March, told Asia Business Law Journal that his firm has been busy assisting Asian corporates in pre-listing and raising funds overseas.

“What we’ve been finding over the last couple of years is that there is increasing interest in the jurisdictions where we operate, particularly for businesses from Asia looking for exposure into, or access to, investors in Europe,” he said.

Gagie said the trend had been growing for the past five years, fuelled by the growth of Chinese businesses establishing pre-IPO structures to list in Hong Kong and the US with offshore vehicles. Maples is known with Asian clients for its Cayman Islands and British Virgin Islands (BVI) legal practices, but other jurisdictional offerings including Ireland, Jersey and Luxembourg and the Marshall Islands are starting to be recognised and to gain traction.

Gagie said the trend had persisted throughout the pandemic. For example, in Southeast Asia, he said there was a lot of interest from investors in tech in countries like Indonesia, due to its population size and increasing use of online financial and retail-related apps.

“A lot of tech companies are being funded by investors using Cayman vehicles and Cayman partnerships,” he said. “In turn, those tech businesses are then looking for access to public capital markets using offshore vehicles for their listings.”

“Cayman has been the first choice for private equity and hedge fund structures, and for public company work,” said Gagie. “I think the more sophisticated clients that we work with have both Cayman and BVI in their group structures.”

One of the reasons for this trend is the increased sophistication of offshore jurisdictions. Historically, a number of Asian businesses have used BVI companies purely as passive asset holding companies. Over time, there has been increasing use of those vehicles in a transactional context, taking advantage of the flexibility of the corporate legislation.