Cayman and BVI: The Benefit for China in Times of Regulatory Change
International investors into China have traditionally favoured structuring their investments via holding companies or special purpose vehicles domiciled in jurisdictions outside China. Structures for investment into China have often used a combination of both Hong Kong and offshore companies – with the Hong Kong company holding the shares in the PRC WFOE to take advantage of the lower withholding tax on dividends under CEPA and an offshore vehicle, typically incorporated in the Cayman Islands ("Cayman") or the British Virgin Islands ("BVI"), as the ultimate parent.
Please see the attached feature for further information. This was originally published in Hong Kong Lawyer in September 2010.