Amendments to the business regulation of segregated portfolios companies.

07.08.2012 The extensive reform of corporate law on the BVI affected the activities of segregated (separated) portfolios companies. Improvements refer primarily to segregated portfolios themselves: now you can wind up not only the company as a whole legal entity, but a separated  portfolio, if it is inactive. Note, that the definition "portfolio" includes some moments: there are claims (chose in action) and obligations of the company. Such rights and liabilities can be divided according to various criteria. The most striking example is a transaction: the rights and duties, such as bargain and sale of an aircraft - it is a segregated portfolio; the other transaction is another portfolio. The status of "inactive" means that the transaction is either completed successfully and both parties to the contract have no claims against each other, or that the transaction is a "stand still": the buyer does not pay and the seller does not deliver the goods. In order to throw off the debt ballast, the lawmaker gives the possibility of "strike off" an inactive portfolio company under the voluntary liquidation or judicially.

Expert’s opinion

It should be noted that the separate portfolios companies are not in all jurisdictions, and that's why its competent legal regulation can lead to attracting financial flows on the Islands, which is the ultimate goal of the BVI Government. It seems that the goal will be achieved soon: the clients who have business in the British Virgin Islands have the opportunity to "close a successful transaction" and get rid of the bargain burden, without touching general assets of the company, that is very important. Note, that the incorporation of a segregated portfolio company on the BVI offers the clients to secure the part of assets, because if the segregated portfolio is liquidated judicially, the recovery of general assets of a company will not be performed.

On the basis: http://www.bvifsc.vg/en-us/divisions/insolvencyservices.aspx

Julia Nepomnyaschikh ( the paralegal of Moscow office of Honest & Bright)