Seminal global offshore industry legislation to reach its 30th anniversary in August
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 born after the United States cancelled its double taxation treaty with the BVI and other Caribbean nations in 1982. Mr Butler suggested to his Harneys colleagues that the best way to respond was to offer a tax-neutral company that could provide a user-friendly, flexible corporate vehicle for multiple commercial purposes. The so-called “Gang of Five” mentioned above was tasked with developing legislation to create this new corporate product. The bulk of the work was done by Mr Peters, a tax barrister from London who was new to Harneys at the time, but later became the firm’s global managing partner for 21 years.
The draft was written, and reviewed with Mr Hunte in the Attorney General’s Chambers, to work it into suitable BVI legislative format. It was based on Delaware corporation law but incorporated additions from innovative company legislation elsewhere. 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. (Most of these innovations would not appear in English company law until the Companies Act 1986, and some did not appear until the Companies Act 2006.)