One of the most significant pieces of legislation to shape the global offshore finance sector will reach its 30th anniversary this summer.
The British Virgin Islands’ landmark International Business Companies (IBC) Act, passed into law on 15 August 1984, gave rise to the BVI’s finance industry and created a successful model which was emulated in other jurisdictions.
The IBC Act was developed by three Harney Westwood & Riegels (Harneys) partners – Michael Riegels, Neville Westwood and Richard Peters — along with then-BVI Attorney General Lewis Hunte and Paul Butler, a Wall Street lawyer from Shearman & Sterling.
The IBC Act was radical at the time – it streamlined the incorporation procedure, removed the requirement of corporate capacity, abolished the need for corporate benefit, recognised that companies could exist without members and permitted companies to provide financial assistance for the acquisition of their own shares. It provided for true statutory mergers and created new statutory tools for restructuring and reorganisation.
The IBC Act generated a booming finance industry and unimagined prosperity for the BVI. Furthermore, its core components have been copied (often verbatim) by other jurisdictions seeking to build finance industries.