The BVI, along with some other international financial centres, has a presence in Asia to acquire business in the region. This publication caught up with the jurisdiction about its progress.

The British Virgin Islands, like some other international financial centres, has targeted Asia as a region from which it aims to win business. The BVI is the world’s fourth largest recipient of global foreign direct investment, receiving, it says, around $92 billion in 2013. Stressing its importance to China, the BVI, in its promotional literature, says it was the second largest investor into China from 2006 to 2012, providing $7.72 billion of inward FDI into China in 2012; it was also significant for such flows into Singapore, Indonesia and India, among other Asian jurisdictions. And the BVI argues that its role as a tax-neutral centre for international investment accelerates flows of money that produce real benefits.

Against such a backdrop, WealthBriefingAsia was pleased to recently catch up with Elise Donovan, who is director at BVI House Asia. She spoke at this publication’s recent conference in Singapore and took time out from her schedule to answer questions about her strategy for the Asia-Pacific region.

Please describe your role for the BVI

I am charged with promoting the BVI financial services industry in Asia. As director, I also represent the BVI in a diplomatic setting, with a special remit to strengthen the economic and political cooperation regionally and internationally. We established BVI House Asia in Hong Kong in September to deepen our long-standing relationship with this important region and also to expand our ties to key major economies including China.

What is the BVI’s Asia strategy? In which Asian markets/jurisdictions do you see particular promise for BVI-related services, and why?

Our core objective is to deepen the existing ties between the BVI and Asia. The BVI continues to play an indispensable role in helping Asian businesses, individuals and economies achieve financial success. We are seeing strong demand across the continent for our product. The main reason why we continue to be a popular product is due to our strong international reputation, cost effectiveness, efficiency, and the legal and commercial certainty, and also due to our tax and foreign exchange neutrality.

Does the British connection (albeit an indirect one) serve as a general plus factor?

The BVI has already got an established international reputation; however, the British connection is an important part of our proposition to the market. BVI clients are reassured by our legal system being based on English common law, which is by far the most easily understood by lawyers trained in other common law jurisdictions, such as Hong Kong and Singapore. The court system is designed to deal with matters expeditiously, economically and proportionately, and its highest court of appeal is the London Privy Council. This offers a higher degree of accountability when compared to other jurisdictions; it is tried and tested.

You have engaged a firm of consultants to help develop ideas. Is this the first time you have done this?

In Asia, the BVI has built up a robust network of practitioners who come from the world’s leading corporate firms, trust companies, law firms and accounting firms, as well as others involved in the financial services sector. 

One of the main reasons we are in Asia is to offer official support to these practitioners to solidify the connection between Asia and the BVI and to help explain our jurisdictional advantage to our stakeholders. These practitioners have helped Asian families do business for more than 30 years and they are market experts when it comes to understanding the use of BVI structures and the business and personal wealth needs of clients in Asia. 

Why is it so important for the BVI to make a success in Asia, beyond the obvious point about its fast growing wealth? Are there risks as well as challenges (such as if China’s economy stalls badly, or if there are restrictions on Chinese HNW migrants, etc)?

Firstly, it is important to note that the BVI facilitates the flow of capital from East and West, helping Asian companies gain access to Western capital or technology through foreign listings and acquisitions. We have played an important role in restructuring investment into Asia and this is evident when you look at the levels of foreign direct investment into the region.

For over 30 years, Asia has been a key contributor (over 40 per cent) to our financial services industry. While Asia is experiencing exponential growth in terms of wealth, the BVI has been the jurisdiction of choice and has played an indispensable role in helping Asian businesses, individuals and families achieve financial success. We expect this to continue to be the case in the future.

In China, the BVI plays a major role in FDI. Statistics show that China’s outward and inward FDI flows through the BVI have continued to increase in spite of the global financial crisis.

What is your impression about how Asian clients perceive the BVI? What progress have you made in raising the profile? What in particular remains to be done?

Asian clients continue to view the BVI as being an effective, efficient and proven structure and they also see that we offer the best value and quality of structure for money.
 
Since we established the BVI House Asia, we have worked to promote our advantage to both existing and potential Asian users of the BVI structure across Asia.