Ogier Asia Offshore Updater

Corporate & Commercial

In our last updater we highlighted various amendments to the Cayman Islands' Companies Law designed to keep Cayman at the forefront of the leading international finance centres.

The BVI is also currently in consultation regarding enhancements to its corporate legislation. While the BVI Business Companies Act 2004 has proved very popular in its modern and practical approach, the jurisdiction is keen to maintain its dominant position as a global corporate domicile. Proposed changes include the introduction of not-for-profit companies, developments in the use of foreign character names in recognition of the global appeal of BVI companies and the introduction of listed company regulations. The latter being an acknowledgement that BVI companies are now listed in public markets around the world. Please click here to read a summary of the proposed changes.

We are also seeing growing interest in special purpose acquisition vehicles (SPACs) and offshore jurisdictions such as the BVI, Cayman, Guernsey and Jersey are increasingly being used for both the creation and ongoing business structure of such vehicles. These jurisdictions have proven to be ideal for this type of funding structure due to their flexibility and tax efficiency. To read more about SPACs please click here.

Banking & Finance

We have recently expanded our Hong Kong finance team with the hire of Fiona Chan who joins us from Clifford Chance's banking team where she spent 10 years and Jessy Jiang also joining from Clifford Chance.

Given the current global economic outlook, many lenders are currently in the process of reviewing their loan books in advance of potential refinancings / restructurings and obtaining advice on their existing security. We attach a short briefing outlining some of the key issues for lenders to consider in the context of security reviews or refinancings / restructurings involving offshore entities.

There has also been increased interest from clients and their advisers in using offshore companies in cross-border restructurings. Ogier can arrange for the incorporation and administration of companies in BVI, Cayman, Guernsey and Jersey and advise on local law issues. Such companies can offer a number of advantages when used as part of a restructuring plan, including corporate flexibility, tax neutrality, bankruptcy remoteness and the flexible creation and enforcement of security. Please click here to read our short briefing on cross-border restructurings using offshore companies.

Investment Funds

In June 2011, the Cayman Islands Premier announced a proposal to require new and existing master funds in open-ended master/feeder structures to register with the Cayman Islands Monetary Authority, to bring the Cayman regime in line with the practice adopted in other jurisdictions. Following several months of consultation with industry and CIMA, the Mutual Funds (Amendment) Bill 2011 was passed by the legislature on 5 December 2011. Please click here for our briefing on this development.

Also in the funds context, the Cayman Islands court recently found the directors of a failed investment fund liable in damages for the fund's losses. While the judgement is likely to be appealed, this is a landmark decision with far reaching consequences for directors of funds giving some long overdue guidance as to, practically, what is required of directors of Cayman Islands investment funds and the steps they ought to take to ensure that they are properly discharging their duties. For further information on this judgment and guidance on the steps directors should take, click here.

Private equity work is a core part of Ogier's wider investment funds, corporate and fiduciary strategy in Asia. With that in mind, Ogier Hong Kong recently sponsored the 24th Annual AVCJ Private Equity and Venture Forum 2011 held at the Grand Hyatt between 7-10 November. Our annual "Overview of Private Equity Developments 2011" looks back at the past year in the context of Asian private equity and discusses topical offshore legal issues and other developments within the industry.

Ogier Private Wealth

Confidentiality is an issue of the utmost importance to many private wealth clients. A recent decision of the Jersey court provides some very useful guidance for trustees in relation to the extent of their powers to disclose confidential information, to whom it may be disclosed and in what circumstances. The judgment is examined in more detail in the attached client briefing.

Most modern trust deeds provide trustees with potentially very broad discretions. While the flexibility that comes from this is one of the very great strengths of the trust structure, the precise extent of those discretions and the way they may be exercised is sometimes an issue of concern - especially for settlors and beneficiaries who may feel vulnerable to the exercise of such potentially broad discretions. In particular, if a trustee makes a "final" decision to act in a certain way, to what extent does the trustee have the power to subsequently change its mind and adopt a different course? Can a beneficiary prevent such a change of mind? The attached client briefing considers these issues in the context of a recent case.

Most trusts established as part of private wealth planning structures last for many years. Consequently, it is not uncommon for there to be changes in trustee during the life of a trust whereby a trustee will resign and a successor trustee will be appointed in its place. But what happens if there is some inadvertent defect in the appointment of a successor trustee? Can the faulty appointment be rectified? If not, is some other remedy available? The Jersey court has considered these issues recently and held that a remedy was available so as to ensure that the parties' true intentions were achieved. A commentary on the case and the issues it raises is attached.

Deal highlights 2011