Asian Growth Properties Limited, the Hong Kong based China property development and investment company, whose shares are listed on AIM, announced on 17 October 2016 that it intends to seek the approval of its Shareholders to de-register the Company as a BVI company, and re-register the Company in Bermuda, by way of continuation.
The Company’s management have cited the following reasons for its proposed migration to Bermuda:
“Recently, the British Virgin Islands came under a considerable amount of adverse publicity following the publication in early 2016 of a major leak of documents from a Panamanian law firm. A large number of people (including celebrities) have purportedly been suspected of using British Virgin Islands companies for tax avoidance and other illegitimate activities. Given this, the Directors believe that a British Virgin Islands domicile may no longer be suitable for publicly listed companies. As a result, being domiciled in the British Virgin Islands may be a barrier to certain investors wishing to invest in the Company. Having considered various alternatives, the Directors propose the Migration for the following reasons:
The Directors believe Bermuda has a highly regarded regulatory regime. It is also the domicile of choice of many listed companies, particularly those listed on The Stock Exchange of Hong Kong. Bermudan domiciled companies are also listed on a number of other stock exchanges ranging from the Singapore Stock Exchange to the Toronto Stock Exchange.
The Company may consider a listing on The Stock Exchange of Hong Kong Limited in the future. Given Bermuda’s general acceptance by the investment community in Hong Kong, which the Directors believe is greater than companies domiciled in the British Virgin Islands, the move to Bermuda will give the Company potential added flexibility in the future.
Like the British Virgin Islands, Bermuda does not impose any form of taxation on exempted companies not based in Bermuda. Accordingly, the move from the British Virgin Islands to Bermuda should have a neutral effect on the Company’s existing tax structure.
- Migration from the British Virgin Islands to Bermuda is relatively straight-forward.
Neither the British Virgin Islands nor Bermuda imposes withholding tax on dividends from companies incorporated in those jurisdictions, nor are transfers of shares in such companies chargeable to capital gains or other taxes in the British Virgin Islands or Bermuda. Therefore, the Migration should not affect the tax position of Shareholders in receiving dividends or other distributions from the Company or the tax position of Shareholders buying or selling shares of the Company. There are no applicable double taxation treaties in the British Virgin Islands or Bermuda for investors not domiciled in the British Virgin Islands or Bermuda”.