The winding up of BVI and Cayman Islands companies in Hong Kong
British Virgin Islands (BVI) and Cayman Islands companies have long been a valuable feature of commercial life in Hong Kong and China. Such companies offer many benefits, including flexibility, asset security and tax-neutral status. Both the BVI and the Cayman Islands enjoy advanced legal and regulatory infrastructures derived from the English common law, together with longstanding political and judicial stability, making them ideal jurisdictions for corporate domicile.
In most cases, the simplest and most cost effective route to wind-up such companies will be to commence proceedings against them in their home jurisdictions. Unaware of this fact, it is still relatively common for individuals to commence proceedings in respect of such companies in other jurisdictions, principally those jurisdictions in which they do business, seeking to rely on the foreign court’s jurisdiction to wind up a “foreign company”.
In several such recent cases, the Hong Kong Court of First Instance has confirmed that whilst it possesses an ‘exorbitant’ jurisdiction to wind up foreign companies, it will only do so where such companies have a sufficiently strong connection with Hong Kong…
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The Royal Court has declined to strike out proceedings brought by the successor trustee and manager of three unit trusts against the former trustee and manager of those unit trusts.
The Supreme Court and the Court of Appeal in England have recently considered the remedy of marshalling.