16 ASIAN LEGAL BUSINESS – NOVEMBER 2023 WWW.LEGALBUSINESSONLINE.COM continuing to domicile their funds in the Cayman Islands as it remains the global jurisdiction of choice for investment funds.” INCREASED REGULATION Offshore law firms are also welcoming the increased regulation in offshore centres, which have increased the credibility and comfort of these offshore bases, without reducing their effectiveness, among stakeholders doing business through them. “Regulation in the offshore jurisdictions in which we operate has increased in the past handful of years. Most clients see increased regulation as a positive development as it helps to minimise legal and regulatory risks and enhances shareholder protections,” says Padarin. “We have aimed to minimise the impact of such regulation on clients through seeking to the greatest extent possible to automate the necessary compliance tasks associated with such regulation,” he adds. A positive regulatory development has been the recognisance of virtual asset service providers in offshore jurisdictions, including BVI, Bermuda and the Cayman Islands. “In Asia and across our wider network of offices, we have seen a change in the nature of enquiries and a change in the attitude towards offshore regulation around virtual/digital asset services. There is now an increasing perception that in order to do business with reputable institutions and regulated clients, virtual/digital asset service providers themselves need to demonstrate credibility through reputable regulation,” McKenzie explains. He says that Carey Olsen has been seeing an increasing number of mandates to assist Asian digital asset companies on Cayman Island, BVI and Bermuda registrations and licensing applications involving novel, complex and innovative projects. “As a result, we continue to invest in our fintech and regtech practices in Asia,” McKenzie adds. GROWTH AREAS With increased political turbulence and regulatory scrutiny in Hong Kong, slowing down of China’s economy, and rising geopolitical tensions in the region, Singapore has emerged as the best choice for new offices for regional, international and offshore law firms. “Singapore is considered a favourable destination for doing business due to its political stability, strong legal framework, well-regulated financial sector, competitive tax rates, excellent infrastructure and pro-business policies that attract foreign investment. Singapore is close to the next wave of fastgrowing economies in Southeast Asia, is a stepping-stone to the India market and is ideally situated as a regional Asian play for international businesses,” McKenzie says. “The Cayman Islands government’s recent announcement to establish its first Asia office in Singapore is a positive development and underscores the importance of Singapore as Asia’s leading asset management and private client hub,” he adds. Nelson says that Asia’s markets are diverse, and clients are looking to invest across various emerging Asian markets outside Singapore as well. “The shift in jurisdictional focus and the types of players operating in different markets gives us an opportunity to grow into new markets and geographic areas and to target new entrants into certain more established ones.” He adds that increased economic distress has meant an increase in restructuring, banking and finance, portfolio management, litigation, secured debt enforcements and divestments, a trend he expects to continue in 2024. NEW THEMES Among emerging areas, ESG in offshore markets is growing along global lines, with environmental risk analysis and carbon reduction becoming a top agenda in parliaments and chambers of commerce. “I expect we will continue to see offshore law firms reinventing traditional practice groups to align with client sustainable investing and ESG needs,” Carey Olsen’s McKenzie says. The growth of ESG has also affected the drafting of deal documentation, says Ogier’s Nelson. “We have seen a flood of funds, investors and corporates doing ESG investments and a rise in the inclusion of so-called ‘ESG clauses’ in debt documentation. Several global megatrends are shaping this development, including the climate crisis, evolving regulation and growing investor demand, and we expect this trend to continue,” Nelson says. To harness this growing ESG demand, Ogier has also set up a Sustainable Investment Consulting team, “which means we are able to go beyond legal advice and support clients in translating ESG policy into operations and in navigating the evolving ESG regulatory landscape,” Nelson says. Along with ESG, artificial intelligence is another area that’s primed for growth. While maintaining that AI in legal is still in its nascent stage, Nelson says Ogier is undertaking research and development to assess how to maximise AI for its internal workflow and client services. “AI is something I see as becoming supplementary to, rather than replacing, the skills of our lawyers,” he says. OFFSHORE “We have seen a flood of funds, investors and corporates doing ESG investments and a rise in the inclusion of so-called ‘ESG clauses’ in debt documentation. Several global megatrends are shaping this development, including the climate crisis, evolving regulation and growing investor demand, and we expect this trend to continue.” — David Nelson, Ogier
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