IFLR 1000
The Guide to the World's Leading Financial Law Firms

Over the course of the past year, the market has noted an increase in the number of firms on the British Virgin Islands (BVI). "There has been a surge of new entrances into the legal market, especially the large offshore firms," one partner notes....

Over the course of the past year, the market has noted an increase in the number of firms on the British Virgin Islands (BVI). "There has been a surge of new entrances into the legal market, especially the large offshore firms," one partner notes. At the end of 2011, Jersey-headquartered Bedell Cristin established a BVI partnership, followed by Cayman Islands-based Campbells' announcement that the firm is offering litigation services in the BVI through its joint venture with a local law firm, HPA Lawyers. In the middle of 2012, Carey Olsen, the largest law firm in the Channel Islands, started offering BVI legal services out of its Guernsey office, while US litigation firm Kobre & Kim launched an office in response to its increasing work in the jurisdiction from Asian clients.

Besides the growing presence of established firms from other jurisdictions, the BVI market has also witnessed a growing number of new firms set up by experienced former large-firm attorneys. One such example is Hempel and Boyd, a specialist corporate law firm established by two former Maples and Calder lawyers in February 2012, while another similar one is Lynton Spencer, an independent law firm established by other ex-Maples lawyers.

Despite the increasingly competitive market in the country, lawyers remain positive; noting that the growing number of firms coming into the islands helps to "underscore the importance of BVI" and "raise the reputation of the jurisdiction" and as another says: "Our market is not too crowded yet."

Additionally, the market has experienced quite a high level of turnover, with law firms including Appleby, Maples and Calder, Ogier and Walkers reporting plenty of major staff changes over the past year.

In an effort to keep the BVI's company regime up to date, the BVI Business Companies (Amendment) Act and the BVI Business Companies Regulations, 2012 are expected to come into force in late 2012.

CONTEXT AND TRENDS "Economic recovery remained patchy", was the overall summary of the last 12 months by one partner. However, there is consensus among lawyers that there has been an uptick in transactional work during the past year, with the British Virgin Island's (BVI) economy moving from restructuring to new deals born out of growth....

"Economic recovery remained patchy", was the overall summary of the last 12 months by one partner. However, there is consensus among lawyers that there has been an uptick in transactional work during the past year, with the British Virgin Island's (BVI) economy moving from restructuring to new deals born out of growth. "M&A activities have been reasonably strong," one partner points out. Another adds that there have been a lot of acquisitions related to Latin America, with investors buying up assets in the natural resource field.

Another area of growth has been company incorporations and the island's nickname of "the incorporation factory" is well earned. After the economic downturn in 2008, the number of firms being incorporated every day in the jurisdiction has dropped. However, according to statistics released by the BVI Financial Services Commission, incorporations in the country in 2011 and 2012 have increased significantly compared with the two previous years.

In addition, China continues to be a key contributor to BVI's client base despite the increasing scrutiny of IPOs related to a perceived lack of sufficient auditing of Chinese firms. Meanwhile, other emerging markets such as Russia and Brazil are becoming increasingly important sources of work for BVI lawyers.

In the funds sector, mutual fund work has contracted, although a steady stream of work is still coming through. Distressed fund work has kept lawyers busy in addition to work generated from the establishment of new funds.

In November 2011, the country had its general election, the result of which gave power to the opposition National Democratic Party (NDP) led by Orlando Smith. "Much, much more business-friendly" is how one partner describes the new administration, adding that while the last administration put their efforts into social justice issues, the new one is focused strongly on building the economy through large infrastructure projects, with two related to a local airport and a port in the pipeline.

MAJOR LATERAL HIRES

Tim Clipstone
From: Walkers
To: Maples and Calder

Clinton Hempel
From: Maples and Calder
To: Hempel and Boyd