Jul 2022
Nicholas Kuria discusses BVI Vehicles and Digital Business in Africa with Africa Legal.
Corporate and technology, media and telecommunications (TMT) expert Nicholas Kuria recently discussed the evolution of digital business in Africa and the benefits of British Virgin Islands vehicles with Craig Sisterson.
Using a corporate entity based in the BVI could help innovative African technology businesses gain greater access to international funding, among other benefits, says Nicholas Kuria, a counsel in the BVI office of Conyers.
“When funding becomes more global for these African companies, they’re going to have to balance local management, and maybe initial local shareholders and what they want, with investors coming in from the US, from Asia, who may not all be comfortable with a local African company being the vehicle in which they hold their shares,” said Kuria, who worked in the London offices of large international law firms before relocating to the Caribbean.
Kuria explained that the BVI provides an ideal neutral platform for investment on a cross-border basis, where shareholders and investors from all over the world can pool investment funds with shared confidence in the entity they’re investing in. Globally recognised, BVI entities are listed on the New York, London, and Hong Kong stock exchanges.
“These are all significant corporates now, but some of them began as start-up entities,” said Kuria, “so that really is the runway we offer to some of these start-up companies in Africa.”
Through his role at Conyers, a leading firm with expertise in the largest transactions involving BVI entities, Kuria has already seen African businesses in other sectors like heavy industry and mining, utilise BVI companies to facilitate external lending and investment. He believes there’s increasing interest now and moving forward in African digital businesses.
“Fintech has become a significant driving force for the African internet economy broadly, contributing directly to GDP growth and trickling down to other sectors as well,” he said. “What we’ve seen is that fintech start-ups have been attracting a lot of funding, particularly now as you’re seeing a lot more cross-border investment, not solely from African sources.”
While Covid battered businesses and national economies all across the globe, the digital sector “bounced back” relatively quickly, and has shown rapid growth.
This article was first published in Africa Legal.