Africa is ripe for investment and British Virgin Islands (BVI) corporate structures are viable to not only facilitate investment, but also scale businesses throughout Southern Africa.
A mixed panel of business professionals and financial services industry practitioners discussed the ways in which BVI corporate structures allow investors to maximise growth and mitigate risk during the July 13 Southern Africa CXO Roundtable, jointly hosted by BVI Finance and African Review.
BVI Finance’s Chief Executive Officer Ms. Elise Donovan remarked, “The roundtable was an excellent tool to showcase the BVI’s financial services offerings and to discuss the ways in which the jurisdiction can make an impact in this emerging market.”
Ms. Donovan added, “This event is part of an overarching strategy to build a greater rapport with key stakeholders, and to strengthen our partnership with Africa.”
BVI a Conduit for Africa Investment
The two-pronged discussion began with talks on the BVI’s role as a conduit for investment and Africa’s current investment opportunities.
Nicholas Kuria, Counsel at Conyers Dill & Pearman said that the BVI can play an integral role in Africa’s long-term development, while highlighting the BVI’s reputation for tax and commercial neutrality, its familiar role as a platform for international joint ventures, and a strong record for cross-border structures for development finances.
Mr. Kuria said the BVI’s viability was further supported by financial services products, such as the regulatory sandbox, which is specifically designed to support and facilitate investment, is open to foreign companies, and has a generous testing period of 18 months, with opportunity for an extension. Mr. Kuria also said that BVI law and BVI companies are “familiar to and are recognised by sophisticated lenders and facilitators all over the world.”
Adenike Sicard, Managing Partner at Sinclairs BVI echoed Mr. Kuria, stating, “BVI corporate structures are known globally.”
For businesses wishing to scale up quickly, Ms. Sicard said that BVI’s funds products are viable, adding that the BVI is a jurisdiction of choice for funds, has an established funds regime, and is experienced in the funds business.
Ms. Sicard also highlighted the use of BVI incubator funds for speed, economy and ease. She said that incubator funds use “light touch” regulation, easy to set up and while they are suitable for sophisticated investors, they are mainly used by investment managers who are eager to create a track record.
Incubator funds are also allowed to operate without a fund manager, limited to 20 investors and have a minimum investment of $20,000, and maximum of $20 million dollars.
Mitigating Risks
Greg Boyd, Partner at Harneys, said that the robust regulatory regime, the BVI Companies Act, along with the jurisdiction’s technological advances help with both mitigating risks and ease of doing business. To that end, Mr. Boyd referenced the electronic registry, which is accessible to end users around the globe, and the Electronic Transactions Act that facilitates electronic filing of documents.
Also highlighting why the BVI is attractive in mitigating risks, Matthew Gilbert, Partner at Maples Group, London, said that the BVI is a democratic, self-governing British Overseas Territory, with a business friendly government and global ties to leading trading nations. He also said that the BVI has a strong compliance culture and is cooperative with international regulatory authorities.
Investment Opportunities in Southern Africa
Clario Chauraya, Chief Financial Officer at Doves Holdings, affirmed that Southern Africa is a destination for future growth and advised that investors should “go in early, take advantage of low-hanging fruits”.
These “fruits”, Mr. Chauraya opined, are the existing natural resources including minerals, oil and agriculture.
He added that various governments in the region are working hard to attract more foreign direct investment, and pointed to the establishment of investment agencies and authorities that would inform potential investors of prospects in respective countries, a capital gains tax and tax incentives including deductibles for imported equipment.
Nicola Comninos, Group Chief Risk Officer of the Johannesburg Stock Exchange, said that Africa has just under 30 stock exchanges representing 14 nations; nine being members of the World Federation of Exchanges. To that end, Ms. Comninos said interested investors will have access to trade in these markets.
Jowayne Van Wyk, CFO and Executive Director of AEEI Group, said the fourth industrial revolution has been “fast-forwarded” by COVID, adding that it is a good time for investment and scaling of both agribusiness and technology in the region.
The Southern Africa CXO Roundtable discussion was sponsored by BVI Finance. The virtual event was moderated by African Review Editor Samantha Payne.
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