HKEx targeting mainland firms in approving BVI

The Hong Kong stock exchange's decision to accept British Virgin Islands companies for listing is largely a move to accommodate big mainland firms, according to industry players.

'Including BVI is to facilitate mainland listings,' said Steve Vickers, the president and chief executive of FTI-International Risk, a specialist in initial public offering due diligence.

Many mainland companies have subsidiaries incorporated in BVI. For example, Hong Kong-listed aluminium producer China Zhongwang Holdings is incorporated in the Cayman Islands but its wholly owned Zhongwang China Investment is incorporated in BVI. Similarly, Asian Citrus Holdings, incorporated in Bermuda, is listed both in Hong Kong and on London's Alternative Investment Market. But its subsidiary, NewAsia, is incorporated in BVI.

The addition is also beneficial for BVI companies that wish to be dual-listed in Hong Kong, because major exchanges such as the New York Stock Exchange, the Nasdaq Stock Market and the Singapore Exchange allow listings from BVI companies.

It took the exchange only a few months to approve BVI as an acceptable jurisdiction of incorporation, said Christine Chang, a joint managing partner of Maples and Calder, an offshore law firm that asked the bourse to extend the list to cover BVI.

'The exchange had no concerns at all about BVI as an eligible jurisdiction,' said Chang.

She said mainland companies incorporated in BVI would no longer need to restructure their businesses in another jurisdiction before listing.