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BVI Facilitates USD55bn Rosneft M and A Deal

by Amanda Banks, Tax-News.com, London

03 January 2013


A British Virgin Islands holding company was involved in a complex transaction which resulted in the acquisition by Rosneft of Alfa Group, Access Industries and Renova's (AAR) 50% stake in Russian oil company TNK-BP, for USD55bn.

TNK-BP, Russia's third-largest oil producer, is owned by a holding structure established in the British Virgin Islands, reflecting the jurisdiction’s popularity as a domicile for international joint ventures.

Robert Briant, the head of Conyers Dill and Pearman in the British Virgin Islands, which advised the consortium, commented that: "The TNK-BP sale was an exciting transaction to work on and underscores Conyers’s pre-eminence in the British Virgin Islands in advising on large and complex joint ventures and merger and acquisition transactions. Not only is this one of the largest deals of recent times, but the twin track sale process by AAR and BP and the complex corporate governance arrangements of the group made this unique and interesting."

The acquisition of TNK-BP by Rosneft will result in it becoming one of the world’s largest oil producers, matching the output of Exxon. Completion of the transaction is expected in the first half of 2013 subject to approval from Russian and EU competition authorities.

The BVI Business Companies Act 2004 has effectively removed the distinction between offshore and onshore companies in the British Virgin Islands. However, in 2006, corporate income tax in the BVI was abolished, and both domestic and offshore companies pay licence fees to the government.

A comprehensive report in our Intelligence Report series, titled "Offshore For Corporates", discusses in depth the comparative merits of offshore HQs, with a Corporate Treasury section analysing how to get an optimal blend of tax-efficiency and profits and finally a study into how two types of international business can use onshore low-tax regimes in parallel with offshore jurisdictions to construct highly tax-efficient corporate structures, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report7.asp
TAGS: Russia | tax | holding company | mergers and acquisitions (M&A) | international financial centres (IFC) | Virgin Islands | offshore | British Virgin Islands

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