Financial Crime World

Due Diligence for Financial Transactions in the British Virgin Islands

As part of our financial services practice, we often conduct legal due diligence on companies incorporated in the British Virgin Islands (BVI) and issue opinions on their capacity to enter into specific transactions. In this article, we outline the key aspects of conducting due diligence in the BVI.

What Documents Are Required?

When conducting due diligence, we typically request a range of documents from the company, including:

Required Documents

  • Certificate of Incorporation
  • Memorandum and Articles of Association
  • Register of Members
  • Register of Directors
  • Register of Charges (for BVI companies)
  • Recent Certificate of Good Standing issued by the Registrar of Corporate Affairs in the BVI
  • Recent Certificate of Incumbency issued by its registered agent in the BVI

The list of required documents may vary depending on the nature of the company and the transaction.

What Information Can Be Obtained Publicly?

In the BVI, we can conduct searches at the Registry of Corporate Affairs to obtain certain information about a company. This includes:

Available Public Records

  • Certificate of Incorporation
  • Memorandum and Articles of Association (if filed voluntarily)
  • Register of Members (if filed voluntarily)
  • Register of Directors (if selected as a public document)
  • Certificates of Registration of Charge and its stamped particulars
  • Certificates of Release of Charge and its stamped particulars

We can also conduct searches of the electronic records of the Civil Division, Commercial Division, and Court of Appeal to confirm whether any litigation is pending against the company.

Conducting Due Diligence in the Cayman Islands

While we can obtain some information about a company incorporated in the Cayman Islands through public searches, we often require assistance from the company to provide additional documents. This includes:

Required Documents for Cayman Islands

  • Certificate of Incorporation
  • Memorandum and Articles of Association (not available publicly)
  • Register of Directors (available at the Registrar of Companies)
  • Names of current directors and their alternates

We can also inspect the Register of Writs and Other Originating Process maintained by the office of the Clerk of Courts to confirm whether any litigation is pending against the company.

If some constitutional documents cannot be obtained, it may impact our ability to provide a due diligence report or legal opinion. For example, we cannot opine on a company’s capacity to enter into a guarantee without having received and reviewed its current Memorandum and Articles of Association.

However, the impact will depend on what is outstanding and the nature of the transaction in question. In some cases, it may be acceptable to forgo receipt of certain documents, such as the Register of Charges, unless they are required for diligence purposes.

Conclusion

Conducting due diligence in the British Virgin Islands requires a thorough review of a company’s constitutional documents and public records. While some information can be obtained publicly, we often require assistance from the company to provide additional documents. By understanding the key aspects of conducting due diligence in the BVI, companies and their advisors can ensure a smooth and successful transaction process.