If you were wondering why Grand Cayman corporate service formation firms are forming companies for their clients in the British Virgin Islands (BVI), and not the Cayman Islands, where you would think they would prefer to incorporate, read on.
Take a good look at the Companies (Amendment) Law 2016; it removes the power of Cayman Islands exempted corporations to issue bearer shares. All existing bearer shares were required to be converted into registered shares before June 13,2016, or they will be considered void. Thus means that there are no companies formed in the Cayman Islands, with bearer shares, hereafter, and all the old one must be converted.
Now take the British Virgin Islands: it continues to be the jurisdiction of choice for financial professionals who must conceal the identity of their client, the beneficial owner. It is the favorite corporate formation destination of the dodgy lawyers at Mossack and Fonseca, according to the Panama Papers documents, because of the ability to form a company with bearer shares. It remains one of the last of the unreformed offshore financial centers, where "don't ask, don't tell" is the watchword of the day, for it pays all the bills in Road Town. THAT'S why the good people in the Cayman islands corporate services firms take all their illicit business to the BVI.