Law Firm Hails 30th Birthday Of Transformative BVI Law

Tom Burroughes

17 July 2014

The jurisdiction may have been targeted by critics of offshore centers, but the British Virgin Islands is in a mood to party as the Caribbean financial hub marks 30 years of significant legislation.

The BVI’s International Business Companies Act, passed into law on 15 August 1984, gave rise to the BVI’s finance industry. The Act was born after the US cancelled its double taxation treaty with the BVI and other Caribbean nations in 1982. The Act was later repealed in 2006 and replaced with new legislation.

Harneys, a law firm whose partners helped to craft the IBC Act, has produced a micro-site with a video of key players involved in the legislation. The Act was developed by three Harney Westwood & Riegels partners – Michael Riegels, Neville Westwood and Richard Peters - along with then-BVI Attorney General Lewis Hunte and Paul Butler, a Wall Street lawyer from Shearman & Sterling.

The legislation sought to streamline incorporation procedures, remove the requirement of corporate capacity, abolish the need for corporate benefit, recognize that companies could exist without members and permit companies to provide financial assistance for the acquisition of their own shares.

Harneys points to data it says vindicates success of the Act: Incorporation numbers exploded in the decade following its enactment, with nearly 50 per cent growth year-on-year. In 1999 it was estimated that the BVI had amassed a 41 per cent global market share for offshore vehicles. By 2004 the BVI would have the 12th highest GDP per head of population in the world, Harneys said in a note.

Harneys said the Act has been copied by jurisdictions such as the Bahamas and Belize, as well as Anguilla, St Kitts, St Lucia and St Vincent and the Grenadines.