BVI companies for initial public offerings

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The British Virgin Islands (BVI) is home to more than 480,000 active business companies. This article considers the benefits of using a BVI company for an initial public offering (IPO).

The benefit is the flexibility of our company law — the BVI Business Companies Act 2004 (BC Act), which came into full force and effect on 1 January 2007. The BC Act is modelled on the Delaware statute but has been anglicised to take account of the fact that the BVI is a common law jurisdiction.

The capital structure of a business company is simple. The BC Act did away with the legal concept of share capital and premium and therefore the requirement for par-value shares. A business company is authorised to issue either a specific number of shares or an unlimited number of shares. A company that issues no par-value shares has the freedom to set the subscription price for its shares, which can provide an advantage in an IPO context when it comes to the offering and marketing of the shares…

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