Why More Chinese Businesses Are Choosing the BVI for Offshore Investment: A Move To Quality

Over the last few decades, it is increasingly widely known that there has been a steady flow of Chinese businesses choosing to incorporate entities in the British Virgin Islands (BVI). And in tandem with the growing interest from Chinese enterprises looking to build businesses using the BVI, we are increasingly seeing more legal professionals based in China looking to become more knowledgeable about the uses and advantages of BVI structures for their clients' transactions.

According to the United Nations Conference on Trade and Development World Investment Reports, the BVI was the second largest investor in China from 2006 to 2012, providing $7.72 billion of inward foreign direct investment in 2012 alone. What's more, according to recent research by London-based economics consultancy Capital Economics, approximately two-fifths of all BVI business companies in 2017 had operations in mainland China, Hong Kong and Macau. Mainland Chinese and Hong Kong-based companies accounted for more than 40% of the $1.5 trillion in assets mediated through the BVI, according to the Vistra 2020 report The Disruption Advantage. But why have Chinese businesses chosen the BVI?