BVI revamps limited partnership regime

The British Virgin Islands (BVI) has launched a new limited partnership regime in a bid to increase the jurisdiction’s attractions for investment funds, particularly private equity funds and joint ventures

BVI Finance, the body responsible for marketing and promoting the BVI’s financial services industry, said new limited partnerships in the BVI ‘contain several key innovations which represent a step change in this area of law’.

The act contains provisions for the ability to choose legal personality, which means that a new partnership will have the capacity to hold assets and enter into contracts, and have the right to start legal proceedings in the name of the partnership. This provides partners with greater legal certainty and flexibility.

In addition, the new statute will allow limited partnerships to register charges, providing greater certainty for creditors, which will enable limited partnerships to borrow to fund operations. The specific common law position on penalties will not be applied, so forfeiture provisions typical in most limited partnerships will be enforceable.

The legislation also includes a model agreement, so a limited partnership can be set up rapidly if needed. 

M&A provisions from the BVI business companies act are applied in the new law, meaning limited partnerships can merge or consolidate with other limited partnerships.

Robert Briant, partner and head of the corporate department in the BVI office of law firm Conyers, Dill & Pearman, said: ‘Taken together, the provisions of the act combine to create a state of the art innovative limited partnership product. It has been drafted in the same style as our flagship BVI business companies act and will bring the benefits of being flexible, easy to set up and cost effective.’

Lorna Smith, interim executive director of BVI Finance, said: ‘The BVI is committed to ensuring that our business legislation is modern and fits market needs, reflecting the actual commercial landscape in which companies operate. That is why we have created new provisions for limited partnerships in the BVI that will be highly attractive to funds, particularly private equity funds.

‘We are particularly proud of progressing this important piece of legislation despite being devastated by two hurricanes last September. It shows that the BVI is very much open for business and continuing to innovate to help secure its place as a leading offshore financial centre.’

Report by Pat Sweet

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