Following on from news that the HKSE was considering an approval, an announcement was made yesterday that companies incorporated in the BVI will now be able to list on the HKSE. BVI has been popular as a corporate domicile for Asian businesses and this approval will attract more companies for incorporation in the BVI, the barrier to an IPO exit in Hong Kong now having been removed.
“By jurisdiction, BVI companies provide the second-largest source of foreign investment in China, at US$5.8bn in the year to June 2009,” said Barry Mitchell, partner at Maples and Calder. “This latest development could encourage more investment in China through BVI companies, as the option of an exit through an IPO is now available.” This approval also reduces the cost of pre-IPO restructuring to change the jurisdiction of the holding company.
“This significant development offers businesses considering a listing on the HKSE a greater choice of well-regulated and cost-effective offshore jurisdictions as their corporate domicile,” said Christine Chang, joint managing partner of the Hong Kong office of Maples and Calder.
The firm pushed this matter ahead by submitting an application to the HKSE for in-principle recognition of BVI as a jurisdiction for listing purposes. Maples and Calder also assisted the HKSE in its review of BVI shareholder protection standards, which is a necessary pre-condition to obtaining such recognition.
This work has been recognised by the BVI Financial Services Commission (FSC). “This is long something that the BVI authorities and industry practitioners have hoped would be possible,” said Robert Mathavious, FSC managing director and CEO. “Over the years industry personnel have championed the listing, I am particularly grateful to Maples and Calder for the important role it has played, not only in championing BVI listings, but also in making the Hong Kong authorities aware of the high standards and protections for shareholders that BVI companies offer.”
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