BVI companies have become increasingly popular as investment vehicles for PRC companies. Harneys' Ian Mann outlines the resulting growth in Chinese litigation offshore

The enormous popularity of British Virgin Islands (BVI) companies in mainland China for foreign investors, as well as domestic joint venture partners, is well renowned.

A popular investment structure is to incorporate a BVI company, which owns the shares in a People's Republic of China (PRC) company, (known as a wholly owned foreign enterprise, or WOFE) which in turn holds assets in the PRC, more often than not, a factory or some other such enterprise. There are tax and other advantages that are particular to using BVI companies in these investment structures, but there is a new and exciting awakening in the PRC that the shareholder remedies available for BVI companies in the BVI court is just as important as the initial attraction of incorporation advantages.