More than 70 per cent of companies whose shares are listed on the Hong Kong Stock Exchange (HKEX) are incorporated in the Cayman Islands, Bermuda and the British Virgin Islands, and there are a substantial number of offshore companies listed on the New York Stock Exchange, NASDAQ, and other international exchanges.
In addition to publicly listed companies, there are significant numbers of privately held Asian entities established in Bermuda, the BVI and the Cayman Islands, including companies, funds, segregated cells, trusts and limited partnerships.
A perfect storm has been brewing in the first half of 2020, between Covid-19 and its global socio-economic impacts, US-China trade wars, the US’s Holding Foreign Companies Accountable Act, Hong Kong’s new National Security Law, prevailing economic conditions, and an increasing number of regulatory and legislative reforms in offshore jurisdictions.
This has already resulted in a number of corporate privatisation schemes, and distressed debt restructurings, involving Asian corporate groups incorporated in offshore jurisdictions, in which the traditional dividing lines of ‘contentious’ and ‘non-contentious’ legal practice areas have become increasingly blurred.
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2020: The Year of the Rat in Offshore Jurisdictions
This article was originally published in The Lawyer September 2020.