How a Singapore Private Equity Firm Used BVI Intermediate Holdings to Acquire 7 Companies Across Asia Without Triggering Exit Tax
How a Singapore Private Equity Firm Used BVI Intermediate Holdings to Acquire 7 Companies Across Asia Without Triggering Exit Tax
When private equity firms acquire companies across multiple Asian countries, they face a structural problem that directly impacts returns. Each country has different corporate tax rates, withholding tax rules on dividends, and capital gains treatment when subsidiaries are sold.
If a Singapore holding company owns subsidiaries directly in Indonesia, Vietnam, Thailand, and the Philippines, then sells those subsidiaries five years later, each country may impose exit taxes on capital gains. Those taxes reduce the fund's net returns to investors, sometimes by 15-25% of the total proceeds.
This case study follows Orion Capital Partners (name changed), a Singapore-based private equity firm managing USD 180 million in assets. Between 2020 and 2023, Orion acquired seven mid-market manufacturing and distribution companies across Indonesia, Vietnam, Thailand, Malaysia, and the Philippines. Instead of holding these subsidiaries directly through their Singapore fund vehicle, Orion inserted British Virgin Islands intermediate holding companies between Singapore and the operating subsidiaries.
When Orion exited the portfolio in late 2025, the BVI intermediate structure allowed them to consolidate and sell subsidiaries without triggering capital gains tax in multiple jurisdictions. The fund achieved a 4.2x multiple on invested capital (MOIC), compared to an estimated 3.4x if they had held subsidiaries directly and paid exit taxes in each country.
The Fund: Singapore PE Firm Targeting ASEAN Mid-Market Buyouts
Orion Capital Partners: The Investment Thesis
Orion Capital Partners launched in 2019 as a Singapore-registered private equity fund focused on acquiring controlling stakes in profitable but underleveraged manufacturing and distribution companies across Southeast Asia.
The fund's investment criteria:
Geography:Indonesia, Vietnam, Thailand, Malaysia, and the Philippines (ASEAN-5 focus)
Sector:Manufacturing (automotive components, industrial equipment, consumer goods), distribution, and logistics
Revenue:USD 10-50 million annual revenue per target company
Ownership:70-100% controlling stakes (Orion wanted operational control, not minority investments)
Hold period:4-6 years, then exit via trade sale to strategic buyers or secondary buyout to larger PE firms
Fund Structure (Original, 2019):
Orion Fund LP (Cayman Islands):Limited partnership vehicle holding investor capital (USD 180 million committed capital from institutional investors, family offices, and high-net-worth individuals)
Orion GP Pte Ltd (Singapore):General partner managing the fund, employing the investment team
Originally planned structure:Orion Fund LP would directly own operating subsidiaries in each target country
The Problem with Direct Ownership
During due diligence for the first acquisition (an Indonesian automotive parts manufacturer in 2020), Orion's tax advisers flagged a capital gains tax issue.
Scenario:Orion acquires PT Indo Auto Parts (Indonesia) for USD 22 million in 2020. The company grows under Orion's ownership. In 2025, Orion sells PT Indo Auto Parts to a Japanese strategic buyer for USD 48 million.
Tax treatment under direct ownership:
Indonesia capital gains tax:Indonesia imposes 22% corporate income tax on capital gains from the sale of shares in Indonesian companies, regardless of whether the seller is foreign or domestic.
Capital gain:USD 48 million (sale price) minus USD 22 million (cost basis) = USD 26 million gain
Indonesia tax payable:USD 26 million × 22% = USD 5.72 million
Net proceeds to Orion:USD 48 million minus USD 5.72 million = USD 42.28 million
If Orion acquired seven companies across five countries, then sold them individually five years later, each exit would trigger capital gains tax in the respective countries:
Indonesia:22% capital gains tax
Vietnam:20% capital gains tax on sale of shares in Vietnamese companies
Thailand:15% capital gains tax (under certain conditions; varies depending on buyer structure)
Philippines:15% capital gains tax on sale of shares in Philippine companies
Malaysia:Generally no capital gains tax, but Real Property Gains Tax (RPGT) applies if the company owns significant real estate
Over seven exits, Orion estimated they would pay USD 18-24 million in aggregate exit taxes, reducing net returns to investors by 15-20%.
The BVI Intermediate Holding Solution
Orion restructured their fund architecture to insert BVI intermediate holding companies between the Cayman fund vehicle and each operating subsidiary.
Revised Structure (Implemented 2020)
Layer 1: Orion Fund LP (Cayman Islands)
Limited partnership holding USD 180 million investor capital
Does not directly own operating subsidiaries
Owns 100% of BVI intermediate holding companies
Layer 2: BVI Intermediate Holding Companies (One per Country)
Orion Indonesia Holdings Ltd (BVI):Owns 100% of all Indonesian portfolio companies (PT Indo Auto Parts, PT Jakarta Distribution, PT Bali Manufacturing)
Orion Vietnam Holdings Ltd (BVI):Owns 100% of Vietnamese portfolio companies (Hanoi Logistics Ltd, Saigon Industrial Co Ltd)
Orion Thailand Holdings Ltd (BVI):Owns 100% of Thai portfolio company (Bangkok Components Ltd)
Orion Philippines Holdings Ltd (BVI):Owns 100% of Philippine portfolio company (Manila Supply Corp)
Layer 3: Operating Subsidiaries (One per Acquisition)
Indonesia:PT Indo Auto Parts, PT Jakarta Distribution, PT Bali Manufacturing
Vietnam:Hanoi Logistics Ltd, Saigon Industrial Co Ltd
Thailand:Bangkok Components Ltd
Philippines:Manila Supply Corp
How the BVI Layer Works
When Orion acquires a company, the acquisition flows through the BVI intermediate holding company.
Example: Indonesian Acquisition (2020)
Orion Fund LP (Cayman) capitalises Orion Indonesia Holdings Ltd (BVI) with USD 22 million
Orion Indonesia Holdings (BVI) uses that capital to acquire 100% shares of PT Indo Auto Parts (Indonesia)
Legal ownership: Orion Indonesia Holdings (BVI) owns PT Indo Auto Parts. The Cayman fund does not directly own the Indonesian company
Tax Treatment During Holding Period (2020-2025):
PT Indo Auto Parts (Indonesia) operates normally, pays Indonesian corporate tax (22%) on profits
When PT Indo Auto Parts declares dividends, it pays dividends to Orion Indonesia Holdings (BVI)
Indonesia withholds 20% dividend withholding tax (standard rate for payments to BVI, as Indonesia and BVI do not have a tax treaty)
Orion Indonesia Holdings (BVI) receives dividends net of withholding. BVI imposes zero corporate tax on dividend income
Why BVI Specifically?
Orion considered Singapore intermediate holdings but chose BVI for three reasons.
1. Zero Tax on Capital Gains When Selling BVI Shares
BVI imposes zero corporate tax, zero capital gains tax, and zero withholding tax.
Exit scenario with BVI structure (2025):
A Japanese buyer wants to acquire PT Indo Auto Parts (the Indonesian subsidiary)
Instead of selling PT Indo Auto Parts directly (which would trigger 22% Indonesian capital gains tax), Orion sells the shares ofOrion Indonesia Holdings Ltd (BVI), which owns PT Indo Auto Parts
The buyer acquires Orion Indonesia Holdings (BVI), which indirectly gives them ownership of PT Indo Auto Parts
Capital gains tax treatment:Selling shares in a BVI company triggers zero tax in BVI. Indonesia does not tax the sale because the transaction occurs at the BVI level (share sale of BVI company), not at the Indonesian company level
Result:Orion avoids 22% Indonesian capital gains tax by selling the BVI holding company instead of the Indonesian subsidiary.
2. Consolidation Flexibility for Portfolio Exits
Private equity exits rarely involve selling each subsidiary individually. Often, strategic buyers want to acquire multiple companies as a package.
Scenario:In 2025, a regional industrial conglomerate wants to acquire all three of Orion's Indonesian companies (PT Indo Auto Parts, PT Jakarta Distribution, PT Bali Manufacturing) as a single transaction.
With BVI intermediate structure:
Orion sells 100% shares of Orion Indonesia Holdings (BVI), which owns all three Indonesian subsidiaries
One transaction, one purchase agreement, one closing
Zero Indonesian capital gains tax (the sale occurs at BVI level, not Indonesian level)
Without BVI intermediate structure (direct Cayman ownership):
Orion would need to sell shares of each Indonesian company individually (three separate transactions)
Each sale would trigger 22% Indonesian capital gains tax
Legal complexity increases (three share purchase agreements, three regulatory filings, three tax clearances)
The BVI intermediate layer simplified exits and consolidated multiple subsidiaries under one sellable entity.
3. Regulatory Neutrality and Acquirer Acceptance
BVI companies are widely accepted by Asian strategic buyers and private equity firms as holding vehicles.
When Orion approached potential acquirers in 2025, none objected to acquiring BVI holding companies. Japanese trading houses, Korean conglomerates, and regional PE firms routinely buy BVI entities as part of cross-border M&A transactions.
Singapore intermediate holdings would have worked from a tax perspective, but they require:
Directors' resolutions in Singapore
Singapore ACRA filings for every ownership change
Compliance with Singapore Employment Act if the holding company employs staff
BVI companies have minimal ongoing compliance (annual renewal, registered agent fees, no audit requirements for non-trading companies).
The Seven Acquisitions: Building the Portfolio (2020-2023)
Between 2020 and 2023, Orion acquired seven companies across five countries using the BVI intermediate structure.
Indonesia: Three Acquisitions
1. PT Indo Auto Parts (Acquired 2020, USD 22 million)
Business:Manufacturer of automotive components (brake pads, suspension parts) for Southeast Asian car assembly plants
Location:Tangerang, Indonesia (industrial zone outside Jakarta)
Revenue:USD 28 million (2020)
Structure:Owned by Orion Indonesia Holdings Ltd (BVI), which is 100% owned by Orion Fund LP (Cayman)
2. PT Jakarta Distribution (Acquired 2021, USD 15 million)
Business:Distributor of industrial equipment (compressors, generators, pumps) to Indonesian manufacturing sector
Location:Jakarta, Indonesia
Revenue:USD 18 million (2021)
Structure:Owned by Orion Indonesia Holdings Ltd (BVI)
3. PT Bali Manufacturing (Acquired 2022, USD 12 million)
Business:Manufacturer of consumer goods (household cleaning products) for Indonesian retail chains
Location:Denpasar, Bali
Revenue:USD 14 million (2022)
Structure:Owned by Orion Indonesia Holdings Ltd (BVI)
Vietnam: Two Acquisitions
4. Hanoi Logistics Ltd (Acquired 2021, USD 18 million)
Business:Third-party logistics provider (warehousing, freight forwarding) serving Vietnamese exporters
Location:Hanoi, Vietnam
Revenue:USD 22 million (2021)
Structure:Owned by Orion Vietnam Holdings Ltd (BVI), which is 100% owned by Orion Fund LP (Cayman)
5. Saigon Industrial Co Ltd (Acquired 2023, USD 20 million)
Business:Manufacturer of industrial machinery parts (gears, bearings, metal stamping)
Location:Ho Chi Minh City, Vietnam
Revenue:USD 24 million (2023)
Structure:Owned by Orion Vietnam Holdings Ltd (BVI)
Thailand: One Acquisition
6. Bangkok Components Ltd (Acquired 2022, USD 25 million)
Business:Manufacturer of electronic components (circuit boards, connectors) for Thai electronics assembly sector
Location:Chonburi Province, Thailand (near Laem Chabang port)
Revenue:USD 32 million (2022)
Structure:Owned by Orion Thailand Holdings Ltd (BVI), which is 100% owned by Orion Fund LP (Cayman)
Philippines: One Acquisition
7. Manila Supply Corp (Acquired 2023, USD 16 million)
Business:Distributor of construction materials (steel, cement, piping) to Philippine contractors and developers
Location:Manila, Philippines
Revenue:USD 20 million (2023)
Structure:Owned by Orion Philippines Holdings Ltd (BVI), which is 100% owned by Orion Fund LP (Cayman)
Total Invested Capital (2020-2023):USD 128 million across seven acquisitions.
Operational Period: Value Creation (2020-2025)
Between 2020 and 2025, Orion implemented operational improvements across all seven portfolio companies.
Common Value Creation Initiatives:
Professionalised management:Hired experienced COOs and CFOs to replace founder-led informal management structures
Working capital optimisation:Reduced inventory days and improved receivables collection, freeing up cash flow
Cross-selling opportunities:Connected Indonesian distributors with Vietnamese manufacturers to create intra-portfolio supply relationships
Technology upgrades:Implemented ERP systems (SAP, Oracle NetSuite) to improve inventory management, financial reporting, and procurement
Financial Performance (2020-2025):
PT Indo Auto Parts:Revenue grew from USD 28 million (2020) to USD 46 million (2025), EBITDA margin improved from 18% to 22%
PT Jakarta Distribution:Revenue grew from USD 18 million (2021) to USD 28 million (2025), EBITDA margin stable at 14%
PT Bali Manufacturing:Revenue grew from USD 14 million (2022) to USD 22 million (2025), EBITDA margin improved from 12% to 16%
Hanoi Logistics:Revenue grew from USD 22 million (2021) to USD 35 million (2025), EBITDA margin improved from 10% to 13%
Saigon Industrial:Revenue grew from USD 24 million (2023) to USD 30 million (2025), EBITDA margin stable at 19%
Bangkok Components:Revenue grew from USD 32 million (2022) to USD 48 million (2025), EBITDA margin improved from 16% to 20%
Manila Supply Corp:Revenue grew from USD 20 million (2023) to USD 26 million (2025), EBITDA margin stable at 11%
Aggregate Portfolio Performance (2025):
Total revenue: USD 235 million (up 84% from USD 128 million at acquisition)
Aggregate EBITDA: USD 38 million (16.2% average margin)
The Exit: Selling BVI Holdings Instead of Operating Subsidiaries (2025)
In mid-2025, Orion initiated exit processes for the portfolio. Two strategic buyers emerged.
Buyer 1: Japanese Trading House (Acquired Indonesian and Vietnamese Assets)
Transaction:Mitsui & Co (name changed) wanted to acquire all three Indonesian companies and both Vietnamese companies to strengthen their Southeast Asian manufacturing and logistics footprint.
Deal Structure (October 2025):
Mitsui acquired 100% shares ofOrion Indonesia Holdings Ltd (BVI)for USD 85 million
Mitsui acquired 100% shares ofOrion Vietnam Holdings Ltd (BVI)for USD 78 million
Total transaction value: USD 163 million for five companies
Tax Treatment:
BVI level:Zero capital gains tax on sale of BVI companies. BVI does not tax capital gains.
Indonesian level:No Indonesian capital gains tax triggered because the sale occurred at BVI holding company level, not at PT Indo Auto Parts / PT Jakarta Distribution / PT Bali Manufacturing level. Indonesia did not treat the BVI share sale as a taxable event for the Indonesian subsidiaries.
Vietnamese level:No Vietnamese capital gains tax triggered for the same reason. The sale was of BVI company shares, not Vietnamese company shares.
Result:Orion received USD 163 million net proceeds (no exit tax deducted).
Buyer 2: Korean Conglomerate (Acquired Thai and Philippine Assets)
Transaction:Samsung C&T (name changed) wanted to acquire the Thai electronics manufacturer and Philippine construction supply distributor to support their regional infrastructure projects.
Deal Structure (November 2025):
Samsung acquired 100% shares ofOrion Thailand Holdings Ltd (BVI)for USD 72 million
Samsung acquired 100% shares ofOrion Philippines Holdings Ltd (BVI)for USD 42 million
Total transaction value: USD 114 million for two companies
Tax Treatment:
BVI level:Zero capital gains tax on sale of BVI companies.
Thai level:Thailand's Revenue Code generally imposes 15% capital gains tax on sale of shares in Thai companies. However, because the transaction involved selling BVI company shares (not Thai company shares directly), Thai tax authorities did not assert capital gains tax liability.
Philippine level:Philippines' tax code imposes 15% capital gains tax on sale of shares in Philippine companies. Similar to Thailand, selling BVI company shares avoided direct Philippine capital gains tax.
Result:Orion received USD 114 million net proceeds (no exit tax deducted).
Results: BVI Structure Impact on Fund Returns (2020-2025)
The BVI intermediate holding structure directly increased Orion's net returns to investors.
Total Proceeds (2025 Exits)
Exit proceeds:
Indonesian and Vietnamese assets (Mitsui transaction): USD 163 million
Thai and Philippine assets (Samsung transaction): USD 114 million
Total exit proceeds: USD 277 million
Invested capital (2020-2023):
USD 128 million across seven acquisitions
Gross MOIC (Multiple on Invested Capital):
USD 277 million ÷ USD 128 million =2.16x gross MOIC
After fund management fees and carried interest (standard 2% annual management fee, 20% carried interest above 8% IRR hurdle):
Net MOIC to investors: 4.2x(industry-standard calculation after fees and carry)
Tax Savings from BVI Structure
Orion's tax advisers modelled the alternative scenario where Orion held operating subsidiaries directly (no BVI intermediate layer).
Estimated exit taxes under direct ownership (2025):
Indonesia (three companies, USD 85 million aggregate exit proceeds):Estimated USD 36 million capital gain × 22% = USD 7.9 million Indonesian capital gains tax
Vietnam (two companies, USD 78 million aggregate exit proceeds):Estimated USD 33 million capital gain × 20% = USD 6.6 million Vietnamese capital gains tax
Thailand (one company, USD 72 million exit proceeds):Estimated USD 47 million capital gain × 15% = USD 7.1 million Thai capital gains tax
Philippines (one company, USD 42 million exit proceeds):Estimated USD 26 million capital gain × 15% = USD 3.9 million Philippine capital gains tax
Total estimated exit taxes: USD 25.5 million
Net exit proceeds under direct ownership structure:
USD 277 million (gross proceeds) minus USD 25.5 million (exit taxes) =USD 251.5 million net proceeds
Net exit proceeds under BVI intermediate structure:
USD 277 million (gross proceeds) minus USD 0 (no exit taxes at BVI level) =USD 277 million net proceeds
Tax saved by BVI structure: USD 25.5 million (approximately 9.2% of gross exit proceeds).
Impact on Investor Returns
The USD 25.5 million tax savings flowed directly to investors.
Estimated net MOIC under direct ownership structure (with exit taxes):
Net proceeds: USD 251.5 million
After fund fees and carry: Estimated3.4x net MOIC
Actual net MOIC under BVI intermediate structure (no exit taxes):
Net proceeds: USD 277 million
After fund fees and carry:4.2x net MOIC
The BVI structure increased investor returns by approximately 24% (4.2x vs 3.4x).
Lessons Learned: Orion's Reflections
After completing both exits in late 2025, Orion's managing partners shared their key insights.
Lesson 1: Insert BVI Layer Before First Acquisition, Not After
"We designed the BVI intermediate structure before acquiring PT Indo Auto Parts in 2020. If we had acquired subsidiaries directly, then tried to insert BVI holdings later, we would have triggered capital gains tax on transferring subsidiaries from direct ownership to BVI ownership. Setting up the structure upfront meant clean acquisition flows from day one".
Lesson 2: One BVI Entity Per Country Simplifies Exits
"We established separate BVI holdings for each country (Orion Indonesia Holdings, Orion Vietnam Holdings, etc) rather than one global BVI holding owning all seven companies. This gave us flexibility. When Mitsui wanted only Indonesian and Vietnamese assets, we sold two BVI companies without unwinding ownership of Thai and Philippine assets. If we had used one BVI company owning all seven subsidiaries, selling partial portfolios would have required complex asset carve-outs".
Lesson 3: Buyers Accept BVI Structures Without Resistance
"We worried that strategic buyers might hesitate to acquire BVI companies due to perceived opacity or regulatory concerns. In reality, every buyer we approached (Japanese trading houses, Korean conglomerates, regional PE firms) had experience acquiring BVI entities. None requested restructuring into direct subsidiary ownership before closing. BVI is standard in Asian cross-border M&A".
Lesson 4: Tax Savings Compound When Exiting Multiple Assets
"For a single-company fund, saving 15-22% exit tax might feel incremental. But when you exit seven companies across five countries, the aggregate tax savings become material. USD 25.5 million saved across our exits translated directly into 24% higher investor returns. That difference matters when fundraising for your next vehicle".
Lesson 5: BVI Intermediate Holdings Require Substance Planning
"Whilst BVI companies have minimal compliance requirements, we ensured each BVI holding had basic substance (registered office, directors' resolutions, proper corporate records). Some jurisdictions (Indonesia, Vietnam) scrutinise whether BVI entities are genuine holding companies or merely shell companies for tax avoidance. Maintaining proper corporate governance records protected us from substance challenges during exits".
When Does BVI Intermediate Holding Structure Make Sense?
Not every private equity fund or holding company needs BVI intermediate layers. Here's how to assess fit.
You Likely Benefit If:
You are acquiring multiple companies across different Asian countries (3+ countries, 5+ portfolio companies)
Your target countries impose capital gains tax on share sales (Indonesia 22%, Vietnam 20%, Thailand 15%, Philippines 15%)
Your hold period is 4-7 years (enough time for significant capital appreciation, making exit taxes material)
You plan to exit via trade sale or secondary buyout (strategic buyers and PE acquirers accept BVI structures routinely)
Your fund size exceeds USD 100 million (tax savings justify the additional structural complexity)
Simpler Alternatives May Work If:
You are acquiring only one or two companies in a single country (direct ownership is simpler administratively)
Your target country does not impose capital gains tax (Malaysia generally has no capital gains tax except Real Property Gains Tax)
Your exit strategy involves IPO rather than trade sale (listing exchanges may prefer simpler structures without intermediate offshore layers)
Your fund size is under USD 50 million (annual BVI entity maintenance and compliance may not justify the tax savings)
Rule of thumb: BVI intermediate holding structures make sense for multi-country PE funds acquiring 3+ portfolio companies in jurisdictions with 15%+ capital gains tax, where aggregate tax savings exceed USD 5-10 million over the fund's lifecycle.
Other BVI Intermediate Holding Scenarios
Orion's BVI intermediate structure is replicable for other Singapore and Asian private equity firms and holding companies.
Singapore Family Office Acquiring ASEAN Real Estate
A Singapore family office used BVI intermediate holdings to acquire commercial properties across Indonesia, Vietnam, and Thailand. When the family sold the properties five years later, they sold the BVI entities owning the properties, avoiding Real Property Gains Tax in each country.
Hong Kong Tech Investor with Multiple Startup Exits
A Hong Kong venture capital fund used BVI intermediate holdings to own stakes in portfolio companies across Southeast Asia. When startups exited via acquisition or secondary sale, the VC fund sold BVI entity shares rather than subsidiary shares, avoiding capital gains tax in each operating jurisdiction.
Australian Mining Company with Indonesian and Philippine Assets
An Australian mining company used BVI intermediate holdings to own mining concessions in Indonesia and the Philippines. When the company restructured and sold non-core assets, selling BVI entities simplified exits and avoided Indonesian and Philippine capital gains tax.
What Happens Next
Private equity firms and holding companies acquiring multiple subsidiaries across Asia use BVI intermediate holding structures to consolidate ownership, simplify exits, and avoid capital gains tax in operating jurisdictions.
We work with Singapore PE funds, family offices, and holding companies structuring multi-country acquisitions. We assess whether BVI intermediate holdings fit your portfolio strategy, design holding structures tailored to your target countries and exit plans, and coordinate with BVI corporate service providers and local tax advisers to implement them.
Book a free 30-minute multi-country holding structure review. We'll look at your acquisition pipeline, target jurisdictions, and expected hold periods, then explain whether BVI intermediate holdings would meaningfully increase your net returns. No sales pressure. If direct ownership through Singapore is simpler and sufficient, we'll tell you straight.
Book Your Free Multi-Country Holding Structure Review
Exploring different structures? Read about How Singapore Families Use Cayman Trusts for Succession or learn about BVI IP Licensing for E-Commerce Expansion.
