BVI is more user friendly - BVI House Asia’s exclusive interview with Mr. Carson Wen, BBS, JP – Chairman of Sancus Group

Why did you choose / get involved with / the BVI?

The biggest competitive advantage of the BVI is an efficient government, effective regulatory regime and world-class infrastructure, in terms of law firms and corporate services providers. The same is not true of most other offshore jurisdictions.

What should we know about the Asian market today?

Asia, and in particular China, will be the largest market for the BVI. According to OIL's Offshore 2020 Report, the PRC alone accounts for some 40% of BVI companies, with another 9% for Hong Kong and 4% each for Taiwan and Singapore, in the run up to 2020. The BVI Government and the FSC should maintain a keen presence and engagement here in the region, which BVI House Asia has done exceedingly well. Again the goodwill and confidence of the PRC and other Asian authorities have to be well maintained. Click here to view full interview.

Tell us about your history of involvement with the BVI and BVI business companies?

I have been working with offshore jurisdictions since the late 1970s, starting with Panamanian companies. In the early 80s I started using Liberian corporations, so much so that when the International Trust Company of Liberia and International Corporation Services of Liberia, which were run out of Virginia, held their roadshows in Asia, I was on their panel. During the civil war in Liberia, its offshore sector collapsed and I have been using BVI companies since.

The International Trust Company of Liberia created the offshore sector in the Marshall Islands as a successor jurisdiction to Liberia, but it never quite caught on. I might have tried it a couple of times when it first started, but switched to the BVI when I found it more user friendly.

What must the BVI do to continue to position itself as a leader in the Asian market?

What the BVI needs to do to retain its status as the world’s leading offshore jurisdiction is to continue to innovate in terms of products and services. For example, it can explore opportunities in the offshore RMB market, as there should be a lot of offshore RMB in the Western Hemisphere, with China buying oil, gas and mineral resources from the likes of Venezuela, Brazil, Argentina and Mexico and being able to settle those transactions in RMB. To do so, the BVI Government would have to work with the Chinese Government to arrange currency swaps and other measures.

The BVI should also look at how it can continue upgrading its services in the hedge fund, private equity and other investment fund sectors, either by regulatory innovation or in supporting market players who are prepared to bet on the BVI’s competitiveness as an offshore asset management hub.

Another challenge would be the positions taken by many governments, both within the OECD and in countries like China and Russia, against offshoring of assets by their nationals. What the BVI should do is proactively engage with foreign governments and regulators to maintain their trust and goodwill, and to ensure that BVI financial services sector providers adhere to the highest standards of Know-Your-Customer (KYC) and compliance to maintain the good name of the BVI.

Lastly, the BVI should conduct effective public relations campaigns to manage public misconceptions regarding offshore financial services.

What should we know about the Asian market today?

Asia, and in particular China, will be the largest market for the BVI. According to OIL's Offshore 2020 Report, the PRC alone accounts for some 40% of BVI companies, with another 9% for Hong Kong and 4% each for Taiwan and Singapore. In the run up to 2020, the BVI Government and the Financial Services Commission (FSC) should maintain a keen presence and engagement here in the region, which BVI House Asia has done exceedingly well. Again, the goodwill and confidence of the PRC and other Asian authorities have to be well maintained.

What is your current view of the offshore industry? Where is it headed?

Notwithstanding the recent tightening of regulatory regimes on offshoring, there is a basic need and demand for offshore services, which are integral parts of the globalized economy.

The problem is the blossoming of minor offshore jurisdictions, and the lack of an authoritative coordinating organization, like OPEC for petroleum-producing countries, which can maintain some level of order in the sector. Unlike petroleum, which are geological endowments, there is little to prevent jurisdictions turning themselves into offshore havens.

The BVI, as the leading offshore jurisdiction, can consider playing an active role in the establishment of such a multinational body, perhaps in conjunction with other leading offshore jurisdictions such as Bermuda, Cayman Islands and the Channel Islands.

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Mr. Carson Wen, BBS, JP – Chairman of Sancus Group

Mr. Carson Wen has a distinguished career in law, business and politics. He has practiced law for 30 years at his own Hong Kong partnership and subsequently as partner and Chairman of China

Practice of a major US law firm, and then at Jones Day, a leading global law firm. Mr. Wen has been named as a leading adviser on Chinese law, mergers & acquisitions and capital markets work in Who's Who of the Law, Asia Pacific Legal 500, AsiaLaw Leading Lawyers, Chambers Asia and China's Top 200. He is also named in the International Who's Who and Who's Who of the World.

Mr. Wen has been working with the BVI for more than two decades.