Snapshot: enforcement of security over shares in a BVI company

Enforcing security over shares in a BVI company is a common feature of cross‑border financing, and lenders typically rely on well‑established remedies under BVI law when a borrower defaults.

This snapshot outlines when enforcement rights arise, the duties owed by a secured party or receiver when selling charged shares, and the treatment of any surplus proceeds.

When enforcement rights arise under BVI law

In relation to a secured party enforcing its rights under a mortgage or charge of shares in a BVI company, the secured party will typically exercise its rights under BVI law to sell the shares or to appoint a receiver in respect of them.

Such rights may generally only be exercised after a default has occurred and has continued (without rectification for 14 days following notice of the default) for a period of at least 30 days. These time periods can be shortened by contractual agreement in the relevant security document.

Sale of shares

If the right to sell the shares secured pursuant to a mortgage or charge of shares in a BVI company is exercised, whether by the secured party or an appointed receiver, such seller is under an obligation to the chargor of the security to act in good faith and to obtain the best price reasonably obtainable on the day it exercises its power of sale (that is, the seller must not merely aim to recover the amount of the debt due).

Sale proceeds and return of surplus

There is no statutory authority in the BVI in respect of what would extinguish the good faith requirement and no legal requirement to obtain third party valuations or run specific auction or marketing processes in respect of any sale.

If the sale proceeds are sufficient to discharge the secured obligations in full, the secured party or an appointed receiver would be obliged to return any surplus sale proceeds to the chargor of the security.

How Ogier can help

For advice on enforcing security over shares in a BVI company, including the exercise of sale rights, receivership appointments, or compliance with good‑faith duties - contact our BVI Banking and Finance team. Our BVI‑qualified finance lawyers operate across our global network of 13 offices, with on‑the‑ground experts in the Caribbean, Hong Kong, London and the Channel Islands.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice