British Virgin Islands

In the British Virgin Islands there are various contractual and statutory mechanisms for implementing M&A transactions that will be familiar to legal practitioners in the United States, the United Kingdom and other common law jurisdictions. These include:

• an acquisition of shares and/or assets pursuant to a share purchase or asset purchase agreement (a “Purchase Agreement”);
• a statutory merger pursuant to sections 169 through 174 of the BVI Business Companies Act (as revised) (BCA; a “Merger”);
• a scheme of arrangement pursuant to section 179A of the BCA (a “Scheme”);
• a plan of arrangement under section 177 of the BCA (a “Plan”); and
• a takeover/tender offer to shareholders of a target (a “Tender Offer”).

The choice of the above structures for implementing an M&A transaction involving a BVI company is likely to be driven by the following considerations:

• Is the company publicly listed or privately held?
• What shareholder approvals are required for any transaction, and will it be necessary to implement a squeeze-out of minority shareholders?
• Are there any requirements to tailor the consideration offered to different shareholders?
• What are the considerations around timing and speed of execution?
• What is the assessment of any risk of dissenting shareholders and the exercise of statutory appraisal rights?
• What are the onshore tax and regulatory considerations?

We have set out further details of the five different structures below:

Purchase Agreement

An acquisition by way of contract pursuant to a share purchase or an asset purchase agreement is the default means of acquiring the shares and/or assets of a privately held BVI company that is closely held and where all of the shareholders are either consensual sellers or, alternatively, may be contractually dragged pursuant to a joint venture agreement and/or the company’s memorandum and articles of association. With respect to an asset sale, section 175 of the BCA provides that subject to the memorandum or articles of a company, any sale, transfer, lease, exchange or other disposition of more than 50% in value of the assets of the company requires the approval of the shareholders of the company. Absent a higher approval threshold in the memorandum or articles, this will be passed if approved by a majority in excess of 50% of the shareholders entitled to vote.

Mergers

A Merger is by far the most commonly used structure for an acquisition of a widely held company, including the take-private of publicly listed BVI companies and is modelled closely on Delaware law. Mergers can be implemented quickly via a registry-based process once any conditions in the merger agreement have been satisfied, and absent a higher approval threshold in the memorandum or articles, it is possible to obtain 100% control of a target with the approval of a simple majority of the shares voting at a quorate meeting or via written consents in lieu of such a meeting. The statutory merger regime also benefits from its flexibility with respect to different forms of consideration enabling tailoring of the consideration offered for different sellers. Dissenting shareholders may seek to exercise their statutory appraisal rights to require the company to pay fair value in cash for their shares.

Scheme of Arrangement

A Scheme is a compromise or arrangement between the company and its shareholders or creditors or any class of them. BVI law in relation to Schemes is heavily based on English law. A Scheme is implemented by a court-supervised procedure that, in relation to an M&A transaction, will (depending on the outcome of the shareholder vote in relation to it and the court’s approval) result in the acquisition of either all or none of the outstanding shares to which it relates.

A Scheme requires:

• the approval of a majority in number representing 75% in value of the members of each class who attend and vote in person or by proxy at meetings of the holders of each class; and
• the sanction of the court.

If the Scheme is approved by the requisite majority of shareholders and sanctioned by the court as described above, it will be binding on all shareholders and dissent rights do not apply.

While schemes of arrangement are now the dominant mechanism for a non-hostile takeover of UK-listed companies, there have been very few Schemes attempted under BVI law to implement M&A transactions, primarily due to the relatively high approval threshold when compared to the simple majority required to implement a Merger as well as the timing implications of pursuing a court-based process versus the speed of implementing a Merger via the registry-based process.

Plan of arrangement

A Plan is an alternative court-supervised procedure to the Scheme and is based on similar processes available in Canada.

The directors propose and approve a Plan, which must contain details of the proposed arrangement. The company then makes an application to the court for approval of the Plan. The court may then make an order in relation to the Plan and, in making that order, the court may:

• determine what notice, if any, of the proposed Plan is to be given to any person;
• determine whether approval of the proposed arrangement by any person should be obtained and the manner of obtaining such approval;
• determine whether any holder of shares, debt obligations or other securities in the company may dissent from the proposed Plan and receive payment of the fair value of their shares, debt obligations or other securities under a statutory procedure;
• conduct a hearing and permit any interested person to appear; and
• approve or reject the Plan as proposed or with such amendments as it may direct.

The court’s approval may involve two or more hearings at which the court may give directions in relation to the notifications and approvals required in relation to the Plan. In the context of an M&A transaction, such approvals will inevitably include that of the shareholders of the company.

As with Schemes, there have been very few Plans attempted under BVI law. Although it is possible to propose lower approval thresholds than those required by a Scheme, and dissent rights are at the discretion of the court, given the lack of a body of BVI precedent, the possibility or likelihood that a court would require similar approval requirements to that of a Scheme and/or would enable dissent rights to apply has reduced their popularity.

Tender Offers

A Tender Offer is a contractual rather than statutory transaction under which an offer is made to shareholders of the target to acquire their shares. Since the BVI does not have a takeover code, there is little restriction as a matter of BVI law on the terms of such an offer and how it is made. As such, it is generally the law, regulations or market practice of the jurisdiction where the BVI company’s shares are listed that are followed (subject to the company’s memorandum and articles of association).

Advantages of a Tender Offer include speed (it can sometimes be the quickest route to 50%+ ownership) and its availability in a hostile bid, subject to takeover defences in the company’s memorandum and articles of association. The main disadvantage is that it is invariably necessary to take a second step to obtain 100% control — either through a squeeze-out if 90% acceptances are reached, or through a second-stage Merger.

The British Virgin Islands as a jurisdiction broadly reflects macro themes for global investment and can be used as a proxy for the activity and deal flows across the wider global M&A market. Recent deal flow has been concentrated in certain sectors of the economy where competition for assets remains strong, including tech, life sciences and energy. In particular, we have seen strong institutional interest from traditional Wall Street players in targets with exposure to digital assets, a sector in which the BVI remains at the forefront of globally. This includes the acquisition by Ripple of BVI prime broker Hidden Road for USD 1.25 billion and the acquisition by Coinbase of on-chain capital-raising platform Echo for approximately USD 375 million that both completed in Q4 2025.

The authors continue to see a strong appetite for clients making use of the BVI statutory merger regime to facilitate complex cross-border M&A. This is a particularly popular tool for implementing take-private transactions of BVI companies that are listed on U.S. stock exchanges, providing a relatively quick and easy route to securing 100% of a BVI target company.

Key trends in the past 12–24 months include:

• continuing interest in take-private transactions of BVI companies listed on the world’s major stock exchanges;
• a shift in the buyers of assets from financial sponsors and private equity houses to corporates leveraging balance sheets to make strategic acquisitions;
• a concentration of deal flow in certain sectors of the economy where competition for assets remains strong, particularly in tech and life sciences, including greater interest from Wall Street in targets with exposure to digital assets; and
• an increase in distressed M&A, including sales out of liquidation and Chapter 11 U.S. bankruptcy proceedings, as a function of the higher interest rate environment.

As the leading offshore jurisdiction for holding companies and with a global reach spanning key financial centres, we expect BVI vehicles to feature prominently in cross-border M&A and capital markets transactions over the next 12–24 months. Indeed, the BVI offers a number of advantages including corporate flexibility making BVI vehicles suitable as ListCos, Special Purpose Acquisition Companies (SPACs) and other acquisition vehicles, scope for BVI issuers listed on U.S. stock exchanges to rely on home country corporate governance practices and a merger regime modelled on Delaware law suited to complex cross-border M&A transactions. These features, combined with a regulation-light, tax neutral environment, will make the BVI an attractive structuring jurisdiction. While the BVI tends to be a sector-agnostic jurisdiction, we expect to see sustained M&A and capital markets activity across the technology, life sciences, energy and mining, and digital assets sectors over the course of the next 12–24 months.

M&A activity involving a British Virgin Islands company is principally regulated under Part IX of the BCA. The key sections of the BCA contain rules relating to:

• mergers and consolidations (whether between BVI companies or between BVI companies and foreign companies (sections 169 – 174, BCA));
• forced redemption or “squeeze-out” of minority shareholders (section 176, BCA);
• schemes of arrangement and plans of arrangement (section 179A and section 177, BCA); and
• rights of dissenting shareholders (section 179, BCA).

The parties to an M&A involving a BVI target deal are free to agree the make-up of consideration for the transaction, which commonly consists of cash, securities, debt obligations or a combination of those things. In recent transactions we have also seen digital tokens used as a form of consideration on M&A deals. Note that where shareholders exercise dissent rights, they will be entitled to payment of cash in the amount determined by the fair value of their shares irrespective of the form of consideration used for the transaction.

Due diligence is a customary part of M&A transactions involving a BVI target and its scope and focus will be determined by a number of factors, including whether or not the BVI company is a listed entity, whether the BVI entity is regulated in the BVI and whether it is a holding company or an operating entity. While generally speaking there will be a data room containing information on the target, certain information is publicly available in the BVI, including:

• certificate of incorporation;
• certificate of good standing;
• memorandum and articles of association;
• current directors; and
• registered agent and registered office address.

From 1 April 2026, public access to a company's beneficial ownership information will also be available under a “legitimate interest” regime subject to a 25% ownership or control threshold. Disclosure will be subject to certain exemptions (including, for example, companies whose shares are listed on a recognised stock exchange or the subsidiaries of those companies) and the legislation also includes scope for exemption from disclosure of such beneficial ownership information in certain cases.

In addition public searches may be conducted on a BVI target at the Registry of Corporate Affairs and High Court Registry to identify historic filings, whether there are any registered security interests and whether there are any litigation or insolvency proceedings against the company.

Reviewing the memorandum and articles of association and any shareholders agreement will be key to understanding what corporate approvals will be required to implement the acquisition of a BVI target and, in particular if it’s a public M&A deal, to understand if there are any poison pill provisions that an acquiror needs to be aware of. In addition it will be critical to review key financing documents, security arrangements and any material contracts that may contain change-of-control provisions and/or require consents to consummate a sale.

The scope and focus of any regulatory review will depend on whether the BVI company is regulated in the BVI, in which case it may be necessary to obtain regulatory consents for the transaction. However, even if this is not the case it will be important to understand historic compliance with regulatory obligations such as economic substance and beneficial ownership filing requirements, where the consequences of failing to make such filings may include both fines and the company being struck off the register.

W&I insurance policies are relatively common in M&A deals, in particular exits by financial sponsors who want to eliminate any tail risk in order that they can distribute proceeds of a sale back to limited partners. However, warranty and indemnity policies do not generally have an impact on the negotiation of the BVI-specific reps and warranties, which tend to be fundamental representations and warranties in nature; for example as to title, capacity, authority and good standing of the applicable BVI entity.

There are no foreign-ownership restrictions, sector-based foreign investment screening regimes or governmental restrictions or review mechanisms solely due to foreign ownership, meaning that as a general matter foreign buyers may acquire 100% of a BVI company. However, the BVI does apply UK sanctions law and the practical consequence of this is that a transaction will not be able to proceed if it involves a designated person, a party owned or controlled by a sanctioned person or involves deal consideration or financing which touches sanctioned banks or jurisdictions. In addition to sanctions, all acquisitions of BVI companies are subject to robust Know Your Customer (KYC) standards on acquirers and ultimate beneficial owners by the BVI target’s registered agent. The consequence of this is that KYC diligence information on an acquirer and any ultimate beneficial owners will need to be provided in advance of closing of a transaction. Approvals may also be required where the BVI company holds real estate.

Public disclosure is not required under the BCA. The BVI does not have a stock exchange, but any company listed on a foreign exchange would have to follow the disclosure rules of the applicable exchange.

There are no regulations specifically regulating public M&A activity in the British Virgin Islands, which does not have an equivalent to the UK Takeover Panel overseeing the Takeover Code. The Financial Services Commission is the sole financial services regulator in the BVI and is responsible for regulating businesses in the banking, insurance, digital assets, trust, investment funds, investment business and corporate services sectors.

In circumstances where the target is operating in the regulated spaces specified, the Financial Services Commission may be involved in a transaction because a change-of-control application may need to be submitted under the applicable regulatory act as part of the M&A transaction.

Set out below are some further observations with respect to some typical deal terms on public M&A transactions involving BVI companies.

Break fees

Break fees are becoming increasingly standard in transaction agreements. For example, in the case of a proposed merger, the agreement and plan of merger may include a provision for a fee to be paid to the original bidder if the board of the target company changes its recommendation and supports a competing bid. When the board of a target is considering whether or not to agree to accept a break-fee provision, care must be exercised to ensure that the directors’ fiduciary duties at statute and common law are being properly discharged. This will depend on the circumstances of the transaction and the overall deal terms, taking all factors into consideration.

As a matter of practice, break fees in transactions involving BVI companies operating in the North American market tend to range from 1% to 4% of the merger consideration. If the BVI court were to determine that a particular break fee was excessive and did not operate to provide commercial compensation to a party on termination, instead constituting a penalty, the fee may be unenforceable.

“No shop” agreement

“No shop” agreements or “lock-out” clauses, whereby the target agrees not to solicit or engage with any other parties during a defined period of time, can be included in transaction agreements involving BVI companies. The restrictions will often include provisions to prevent the target company from soliciting a transaction or accepting a proposal from a third-party prospective bidder during a defined period of exclusivity.

“Fiduciary out” clause

Directors must be mindful of their fiduciary duties to the company during the course of any potential acquisition. In particular, directors will need to be careful to act in the best interests of the company, acting honestly and in good faith as required under the BCA. A “fiduciary out” provision allows the board of a target company to change its recommendation for the proposed bid and/or terminate the agreement if following through with the transaction would result in a breach of the directors’ fiduciary duties. While these provisions are usually the subject of intense negotiation in transactions, they are often accepted in principle.

Such provisions may require the target board to submit the transaction to its shareholders for approval, even when the board is no longer recommending the transaction; for example, where the target has received what it regards as a superior alternative proposal.

Litigation in the BVI in connection with M&A deals involving BVI companies is rare, not least because many deals will include provisions for arbitration for disputes arising out of or in connection with the deal and/or are likely to be governed by non-BVI law acquisition or merger agreements. In addition, BVI legislation provides statutory remedies to members of the company dissenting from a merger. Those remedies operate entirely without the court and involve the appointment of a panel of appraisers to determine fair value and are therefore not public in nature.

Incorporations of fintech and digital asset businesses has seen rapid growth in the British Virgin Islands over the past few years. That is now manifesting itself with significant consolidation in the sector and the acquisition of crypto-native companies by traditional finance players looking to develop payment infrastructure and provide tokenised real-world assets.

Statutory dissent rights apply to certain mergers, consolidations and asset sales, giving shareholders a right to a fair value appraisal for certain transactions. Unfair prejudice and derivative actions may also be available to aggrieved shareholders, though the courts are generally commercial and pragmatic and will seek to give effect to the business judgement rule where possible.