Ogier Asia Offshore Updater

Corporate & Commercial

Hong Kong IPO activity continues to grab the media's attention. Ogier's Hong Kong office has just acted as Jersey counsel on Glencore's London and Hong Kong listings - the largest IPO in the world this year valuing the company at US$60 billion and the largest ever IPO on the London Stock Exchange. We expect to see further interest in Hong Kong listings from non-Asian businesses seeking to tap into the investor appetite and favourable valuations on the HKEx.

In addition, we recently acted as Cayman counsel to MGM Resorts International in respect of the changes being made to the joint venture arrangements in connection with the listing of MGM China on the HKEx. The MGM China listing on the HKEx raised US$1.5 billion, making it the fourth-biggest gaming IPO globally. The largest was Sands China's $2.5 billion Hong Kong listing in November 2009 (again using a Cayman listing vehicle). It is also the third-biggest IPO in Hong Kong so far this year.

Prada's IPO has also been the subject of much press coverage which has highlighted a disclosure in the prospectus in relation to the levy of a capital gains tax of 12.5% in Italy which would apply to Hong Kong resident shareholders. It is worth stressing that none of our jurisdictions of BVI, Cayman, Guernsey and Jersey have capital gains tax. Equally, none of these jurisdictions apply a withholding tax on dividends unlike Luxembourg which is being used for the Samsonite IPO. We have prepared a briefing note which gives an overview of the reasons for using an offshore holding vehicle for an IPO - including the tax advantages - focusing on the key offshore jurisdictions of BVI, Cayman, Guernsey and Jersey. A Chinese version is also available.

The recent approval by the HKEx of Guernsey as an acceptable jurisdiction offers additional flexibility to prospective issuers. Ogier worked closely with, and provided legal input and assistance to, the Guernsey government in relation to its application for approval by the HKEx. This approval means that a Guernsey company wishing to list its shares on the HKEx can now follow a streamlined listing process.

Banking & Finance

Ogier is counsel to the International Swaps and Derivatives Association, Inc. ("ISDA") in Jersey, Guernsey and BVI and provides netting and collateral opinions which are available to members from ISDA's website and updated on an annual basis. We are often asked to advise on the enforceability of close-out netting and set-off provisions under ISDA and other standard form agreements (including prime brokerage agreements) against counterparties incorporated or registered in Jersey, Guernsey, BVI or the Cayman Islands.

This involves an analysis of the extent to which local laws recognise the enforceability of such provisions in pre- and post-insolvency circumstances. The relevant legislation from each jurisdiction is summarised in this briefing note. Upon request, we are able to provide opinions in respect of specific counterparties/types of counterparties and agreements.

Investment Funds

There are many options available to promoters when chosing a domicile in which to establish an investment fund and different factors, such as regulatory requirements, to consider.

We have produced an Offshore Investment Funds Overview which sets out the different investment fund product options available in the BVI, Cayman, Guernsey and Jersey and which also provides some background information on each of these jurisdictions.

The Cayman Islands Government has announced a proposal to require the registration of Cayman-domiciled master funds with the Cayman Islands Monetary Authority (CIMA). This will supplement the existing requirement for the registration of most Cayman feeder funds as regulated mutual funds under the Mutual Funds Law. For further details please click here.

We continue to see strong demand for private equity fund instructions. Historically, the most common structure used for private equity funds structured in the Cayman Islands was an exempted limited partnership. However, we have seen a shift recently towards structuring private equity funds as exempted companies. We have prepared a short briefing note that considers the advantages and disadvantages of both these investment vehicles.