British Virgin Islands entities and structures are frequently used to hold assets located onshore, outside the BVI. Sometimes these assets represent the proceeds of wrongdoing including breach of fiduciary duty, breach of express trust, or pure fraud.
The vast majority of the 400,000 active BVI companies on the register tend to be holding companies, holding real property, investments, or shares in other companies including shares in trading companies.
As a result of these facts, BVI vehicles can often end up holding valuable assets onshore which feature in recovery litigation, whether the main proceeding is onshore or in the BVI. Although BVI law derives from, and is very similar to English law, it is not identical.
This article discusses recent developments in the availability of free-standing freezing orders in the BVI in aid of main proceedings onshore in “Black Swan Verses Broad Idea,” published by Oxford University Press’ Trust & Trustees. (Complimentary guest access link below.) It raises serious, practical consequences of these recent developments and considers possible future legislative steps that may be taken in the BVI. Given the frequency with which BVI vehicles appear as holding or receiving entities in asset recovery litigation, these developments will have considerable impact onshore, especially as it comes after 10 years of the ability to obtain free-standing freezing orders in aid of litigation onshore.
The full article, first published in Trusts & Trustees on 14 October 2020, can be found here.
