The HKSE recently issued a guidance letter confirming that it is considering accepting an application which would allow companies incorporated in the British Virgin Islands (BVI) to list in Hong Kong.

Barry Mitchell, a partner at international law firm Maples and Calder, and head of the firm's Hong Kong-based BVI team, explained that if the application were successful it would prove particularly attractive to the international private equity community. "Private equity firms have incorporated companies in the BVI for the purpose of investing into China and many of them are now looking for an exit", Mitchell said. "Foreign private equity investment is reaching a certain level of maturity in China and with exits sometimes difficult to achieve, the ability to list in a well regulated and cost effective jurisdiction such as Hong Kong should provide BVI companies with an exit strategy which has not been hitherto available without first undertaking a significant restructuring."

"Given that a listing on other exchanges can be less attractive in terms of costs and regulation," Mitchell believes "this is a welcome development and an option that will be very attractive".