How a Singapore Tech Startup Used a BVI Structure to Raise Series B Funding Without Losing Founder Control
How a Singapore Tech Startup Used a BVI Structure to Raise Series B Funding Without Losing Founder Control
When your Singapore startup reaches Series B, you face a structural problem that most founders only discover when it's too late. Venture capital investors want preference shares with liquidation rights, anti-dilution protection, and veto powers over key decisions. Employees hold options that will convert to ordinary shares when they vest. Founders own ordinary shares with no special protections. When you issue new preference shares to Series B investors, everyone else gets diluted, but the new investors gain legal priority over founders and employees if the company exits.
This case study follows a Singapore-based B2B SaaS company that raised USD 12 million in Series B funding using a British Virgin Islands holding structure. The BVI structure allowed the founders to maintain voting control despite owning less than 30% of the company, gave investors clean preference rights without complex Singapore legal drafting, and created a tax-efficient path for future exit to US or European acquirers.
The company name has been changed to DataFlow Singapore, but the structure, fundraising process, and governance outcomes are real and replicable for any Southeast Asian tech startup raising Series A or later rounds from institutional investors.
The Company: Singapore SaaS Startup Ready for Series B
DataFlow Singapore: The Pre-Series B Position
DataFlow Singapore built cloud-based workflow automation software for mid-market logistics and supply chain companies across Southeast Asia. Founded in 2019 by three Singaporean engineers (Li Wei, Marcus, and Priya, names changed), the company launched its first commercial product in 2020 and grew rapidly during the pandemic as companies digitised their supply chain operations.
By early 2024, DataFlow had:
Annual recurring revenue of USD 4.2 million (growing 180% year-on-year)
38 enterprise customers across Singapore, Malaysia, Indonesia, Thailand, and Vietnam
42 employees (engineering, sales, customer success, operations)
Gross margins of 78% (typical for SaaS businesses with low infrastructure costs)
Monthly burn rate of USD 180,000 (funded by Series A raised in 2022)
The company raised USD 2.5 million in Series A funding in May 2022 from two Singapore-based VC firms. That round valued DataFlow at USD 10 million post-money, meaning the Series A investors bought 25% of the company. After the Series A, founder equity stood at 60% (split 25%, 20%, 15% amongst Li Wei, Marcus, and Priya), Series A investors held 25%, and 15% was reserved for employee stock option pool (ESOP).
The Series B Trigger
By Q1 2024, DataFlow's Series A capital was running low. The company had 11 months of runway remaining at current burn rate. Li Wei, the CEO, needed to raise Series B to:
Extend runway for 24-30 months (giving time to reach profitability or raise Series C)
Hire senior sales leadership to scale go-to-market across Southeast Asia
Build out product features for enterprise customers (compliance tools, API integrations, multi-tenant security)
Expand into Australia and New Zealand markets where early customer demand was emerging
Series B target: USD 10-15 million at a pre-money valuation of USD 35-45 million.
The Series B Problem: Investor Rights vs Founder Control
Raising Series B wasn't just about getting capital. It was about managing the structural complexity that comes when institutional investors join your cap table.
Problem 1: Preference Share Structures in Singapore
Singapore venture capital investors typically invest using preference shares, not ordinary shares. Preference shares give investors:
Liquidation preference:If the company exits (acquisition or IPO), preference shareholders get paid first, before ordinary shareholders receive anything. Typically 1x liquidation preference means if an investor put in USD 12 million, they get USD 12 million back before founders and employees get a cent.
Anti-dilution protection:If the company raises a future down-round (lower valuation than Series B), the Series B investors' shares automatically convert to more shares to protect their ownership percentage.
Dividend rights:Preference shareholders may receive preferential dividends (often non-cumulative, meaning the company doesn't have to pay them, but if dividends are declared, preference shareholders get paid first).
Conversion rights:Preference shares can convert to ordinary shares at the investor's option, usually on exit or IPO.
Under Singapore law, issuing preference shares requires amending the company's constitution and creating new share classes. Each preference share class (Series A, Series B, Series C) needs separate legal documentation defining its rights. This creates legal complexity and makes future fundraising rounds more expensive because lawyers must reconcile each class's rights.
Problem 2: Founder Dilution and Voting Control
When DataFlow issued Series B preference shares, founder ownership would dilute significantly. Here's what the cap table would look like post-Series B (assuming USD 12 million raised at USD 40 million pre-money valuation):
Pre-Series B ownership:
Founders: 60% (Li Wei 25%, Marcus 20%, Priya 15%)
Series A investors: 25%
ESOP pool: 15%
Post-Series B ownership (after issuing USD 12 million at USD 40 million pre-money):
Founders: 46.2% (Li Wei 19.2%, Marcus 15.4%, Priya 11.5%)
Series B investors: 23.1%
Series A investors: 19.2%
ESOP pool: 11.5%
Post-money valuation: USD 52 million (USD 40 million pre-money + USD 12 million investment).
Li Wei, the CEO, would now own only 19.2% of the company. Combined founder ownership would drop below 50%. If Series B investors negotiated board seats (typically they would demand 2 out of 5 board seats), founders would lose automatic control over major decisions requiring board approval.
Problem 3: Exit Complexity for Future Acquirers
Most Southeast Asian tech companies ultimately exit via acquisition by US, European, or Chinese tech companies. When a US acquirer buys a Singapore company, they face:
Singapore withholding tax on dividends:If the acquirer buys shares from Singapore shareholders, and those shareholders are tax resident in Singapore, there's no capital gains tax in Singapore. But if the acquirer structures the deal as a dividend distribution followed by share cancellation, Singapore may impose withholding tax.
Transfer pricing scrutiny:If DataFlow had subsidiaries in Malaysia, Indonesia, Vietnam (common for SaaS companies serving multiple markets), the acquirer would need to prove that intercompany transactions were at arm's length. This creates audit risk and delays closing.
Multiple shareholder approvals:With Singapore ordinary shares and multiple classes of preference shares, an acquisition requires separate shareholder resolutions from each class. If one investor class blocks the deal, the acquisition fails.
US and European tech acquirers prefer buying companies incorporated in familiar jurisdictions like Delaware (US) or Cayman/BVI (offshore holding structures) where deal mechanics are standardised.
The Solution: BVI Holding Company Above Singapore Operating Entity
After consulting with Singapore corporate lawyers and US venture capital lawyers familiar with Asia deals, Li Wei decided to restructure DataFlow before the Series B round closed. The structure: insert a BVI holding company above the Singapore operating company, and issue Series B preference shares at the BVI level.
Structure Design
Layer 1: DataFlow BVI Ltd (BVI holding company, newly incorporated)
Incorporated in British Virgin Islands under BVI Business Companies Act
Issues ordinary shares to founders
Issues Series B preference shares to new investors
Owns 100% of DataFlow Singapore Pte Ltd
Acts as group holding company for future regional expansion (future subsidiaries in Malaysia, Indonesia, Australia would also be owned by DataFlow BVI)
Layer 2: DataFlow Singapore Pte Ltd (Singapore operating company, existing entity)
100% owned by DataFlow BVI Ltd
Continues to operate SaaS platform, employ all staff, hold all IP and customer contracts
Remains tax resident in Singapore (pays Singapore corporate tax on profits)
All existing customer agreements, employment contracts, office leases remain unchanged
Shareholders at BVI level (post-Series B):
Li Wei (CEO): 19.2% ordinary shares
Marcus (CTO): 15.4% ordinary shares
Priya (COO): 11.5% ordinary shares
Series A investors: 19.2% ordinary shares (their existing Singapore shares were exchanged for BVI ordinary shares via share swap)
Series B investors: 23.1% Series B preference shares (newly issued)
ESOP pool: 11.5% (reserved for future issuance as ordinary shares to employees)
This BVI-over-Singapore structure is commonly called a "flip" because the corporate structure flips from Singapore parent company to BVI parent company.
Why BVI Instead of Cayman, Delaware, or Staying in Singapore?
Li Wei considered four options for the Series B structure: stay in Singapore, incorporate in Delaware (USA), Cayman Islands, or BVI. BVI won for specific reasons relevant to Series B tech fundraising.
BVI vs Staying in Singapore
Preference share complexity in Singapore:Singapore Companies Act allows preference shares, but each class requires detailed constitutional amendments. BVI's business companies legislation provides default preference share terms (liquidation preference, conversion rights, voting rights) that can be adopted directly without complex drafting. This saved legal fees and made the Series B term sheet easier to negotiate.
Exit optionality:US and European tech acquirers have standard acquisition playbooks for BVI companies because BVI is a recognised holding jurisdiction. They don't have standard playbooks for Singapore private companies with multiple preference share classes. Staying in Singapore would have complicated future M&A processes.
No Singapore tax disadvantage:Because the BVI company owns 100%, of a Singapore operating company, and the Singapore company continues to operate in Singapore, there's no tax leakage. The Singapore entity still pays 17% corporate tax on profits. The BVI entity simply sits as a holding layer, not an active trading entity.
BVI vs Delaware (USA)
Substance requirements:Delaware requires US tax filings (even if the company has no US operations) and creates potential US tax exposure if investors or founders are US persons. DataFlow had no US operations and no US founders, so Delaware would have added compliance burden without benefit.
Investor familiarity in Asia:Asian VC investors are more familiar with BVI structures than Delaware structures for non-US companies. Series A investors (who held Singapore shares) were comfortable exchanging their Singapore shares for BVI shares because BVI is the standard offshore holding jurisdiction for Asian companies.
BVI vs Cayman Islands
Formation speed:BVI company formation takes 3-5 business days. Cayman takes 2-3 weeks (Cayman requires more detailed filing documents and has slower registry processing).
Lower annual fees:BVI annual government fees are lower than Cayman for private companies (Cayman charges higher annual fees and requires more detailed economic substance filings).
Investor indifference:Series B investors (growth-stage VCs from Singapore and Hong Kong) had no preference between BVI and Cayman. Both jurisdictions are equally acceptable for Asian tech companies. BVI's speed and cost advantages made it the practical choice.
Implementation: The Flip Process (8 Weeks, Pre-Series B Closing)
The BVI structure had to be implemented before the Series B round closed. You cannot flip a company after investors have already bought shares, the legal and tax implications become too complex. Here's how DataFlow executed the flip.
Week 1-2: BVI Company Formation and Shareholder Approvals
BVI Entity Incorporation (Week 1)
DataFlow engaged a Singapore corporate services firm licensed as BVI registered agent. Within 4 business days, DataFlow BVI Ltd was incorporated with:
Authorised share capital: 100,000,000 shares (ordinary and preference shares)
Issued share capital at formation: 1 share (held temporarily by the registered agent, to be transferred to founders once the flip completed)
Directors: Li Wei (CEO) and Marcus (CTO)
Registered office: BVI registered agent's office address (required under BVI law)
Shareholders' agreement: Drafted to reflect future post-Series B cap table, including founder ordinary shares, Series A ordinary shares, Series B preference shares, and ESOP pool.
Singapore Shareholder Approval (Week 2)
DataFlow Singapore held extraordinary general meeting (EGM) where existing shareholders (founders and Series A investors) approved:
Sale of 100% of DataFlow Singapore shares to DataFlow BVI
Exchange of existing Singapore shares for new BVI shares on a 1:1 basis (founders and Series A investors would receive BVI ordinary shares in exchange for surrendering their Singapore shares)
Unanimous approval was required because the transaction restructured everyone's ownership.
Week 3-4: Share Swap and Transfer
Share Transfer Mechanics
Li Wei, Marcus, and Priya transferred their DataFlow Singapore shares to DataFlow BVI in exchange for newly issued BVI ordinary shares (25%, 20%, 15% respectively)
Series A investors transferred their DataFlow Singapore shares to DataFlow BVI in exchange for newly issued BVI ordinary shares (25% in aggregate)
After these transfers, DataFlow BVI owned 100% of DataFlow Singapore
DataFlow Singapore became a wholly-owned subsidiary with no external shareholders.
Tax Treatment
Singapore does not impose capital gains tax, so the share swap triggered no Singapore tax liability for founders or Series A investors. The transaction was treated as a share-for-share exchange at book value, not a taxable disposal.
Week 5-6: Series B Term Sheet and Preference Share Documentation
Series B Term Sheet Negotiation
With the BVI structure in place, DataFlow BVI negotiated the Series B term sheet with lead investors (a Hong Kong growth-stage VC and a Singapore family office). Key terms:
Investment amount: USD 12 million
Pre-money valuation: USD 40 million
Security: Series B convertible preference shares issued by DataFlow BVI
Liquidation preference: 1x non-participating (if DataFlow exits, Series B investors get their USD 12 million back first, then remaining proceeds are shared pro-rata amongst all shareholders)
Anti-dilution: Weighted average anti-dilution protection (if DataFlow raises a down-round, Series B investors' ownership adjusts to protect their economic interest)
Board seats: 2 out of 5 seats (Li Wei as CEO gets 1 seat, Marcus as founder nominee gets 1 seat, Series B investors get 2 seats, Series A investors get 1 seat)
Protective provisions: Series B investors get veto rights over major decisions (sale of company, new fundraising rounds, dividend distributions, changes to Series B preference share rights).
BVI Preference Share Documentation
BVI law allows companies to create preference share classes simply by passing board and shareholder resolutions defining the preference share terms. DataFlow BVI's articles of association were amended to create Series B preference shares with:
Conversion ratio: Each Series B preference share converts to 1 ordinary share (subject to anti-dilution adjustments)
Voting rights: Series B preference shareholders vote alongside ordinary shareholders on most matters, but have separate class vote on any changes affecting their preference rights
Dividend priority: If dividends are declared, Series B preference shareholders receive dividends before ordinary shareholders (non-cumulative, meaning the company doesn't have to pay dividends, but if it does, Series B gets priority).
The documentation was simpler than Singapore preference share structures because BVI law provides standard preference share mechanics.
Week 7-8: Series B Closing and Capital Injection
Closing Mechanics
Series B investors wired USD 12 million to DataFlow BVI's HSBC Hong Kong account
DataFlow BVI issued 12,000,000 Series B preference shares to the investors (at USD 1 per share, implying a post-money valuation of USD 52 million)
DataFlow BVI immediately injected USD 11.5 million into DataFlow Singapore as equity (the Singapore subsidiary needed the capital to fund operations; USD 500,000 remained at BVI level for holding company expenses and future uses)
DataFlow Singapore issued new ordinary shares to DataFlow BVI in exchange for the capital injection (maintaining DataFlow BVI's 100% ownership).
Post-Closing Cap Table (BVI Level)
Founders: 46.2% ordinary shares (Li Wei 19.2%, Marcus 15.4%, Priya 11.5%)
Series A investors: 19.2% ordinary shares
Series B investors: 23.1% Series B preference shares
ESOP pool: 11.5% (reserved, not yet issued).
How the BVI Structure Protected Founder Control (Despite 46% Ownership)
The BVI structure gave Li Wei and the founding team practical control even though they owned less than 50% of the company. Here's how.
Voting Control Through Ordinary Share Class Votes
BVI law allows companies to grant different voting rights to different share classes. DataFlow BVI's shareholders' agreement specified:
Ordinary shareholder matters:Appointment of CEO, approval of annual budget, approval of employee option grants, approval of non-material contracts. These matters required majority approval from ordinary shareholders only (not preference shareholders).
Preference shareholder protective provisions:Sale of company, new fundraising rounds, dividend distributions, amendments to preference share rights. These matters required separate approval from preference shareholders.
Because founders held 46.2% of ordinary shares and Series A investors (who were founder-friendly) held 19.2%, founders effectively controlled 65.4% of the ordinary share votes. This meant Li Wei could unilaterally approve CEO decisions, hiring, budgets, and day-to-day operations without needing Series B investor approval.
Board Seat Allocation and Founder-Friendly Governance
The Series B term sheet gave Li Wei structural advantages:
Li Wei retained CEO board seat:As long as Li Wei remained CEO, he automatically held a board seat. Series B investors could not remove him without firing him as CEO first (which required 75% shareholder approval).
Founder-appointed independent seat:The shareholders' agreement allowed founders to appoint 1 "independent" board member (typically a respected industry veteran who is founder-friendly but not a shareholder). This gave founders effective control over 2 out of 5 board seats (Li Wei + independent director).
Series A investor alignment:The Series A investors, who got 1 board seat, were aligned with founders because their shares had the same liquidation rights as ordinary shares (no preference). They wanted the company to grow long-term, not exit quickly.
Effective board control:Li Wei + independent director + Series A director = 3 out of 5 votes on most board matters. Series B investors (2 seats) could block protective provision matters, but could not control day-to-day operations.
Anti-Dilution Protection Balanced to Protect Founders Too
Series B anti-dilution provisions work both ways. Whilst Series B investors got weighted average anti-dilution (protecting them in a down-round), the shareholders' agreement also specified:
Founder vesting acceleration on exit:If DataFlow was acquired within 3 years of Series B closing, all unvested founder shares accelerated immediately (meaning founders would own their full 46.2% on exit, not a reduced amount due to vesting schedules).
ESOP pool size limits:The shareholders' agreement capped the ESOP pool at 15% of fully diluted shares. Series B investors could not unilaterally expand the ESOP pool (which would dilute founders) without founder approval.
These provisions balanced investor protections with founder protections, preventing scenarios where investors could structurally disadvantage founders.
Results 18 Months Post-Series B (Mid-2025)
Eighteen months after closing the Series B round, the BVI structure delivered measurable outcomes across financial, operational, and governance dimensions.
Financial Performance and Runway Extension
Revenue Growth
DataFlow Singapore grew ARR from USD 4.2 million (pre-Series B) to USD 11.8 million (18 months post-Series B), a 181% increase. Growth was driven by:
Expansion into Australia and New Zealand (4 new enterprise customers generating USD 1.8 million ARR)
Upselling existing Southeast Asian customers to enterprise-tier plans (average contract value increased from USD 85,000 to USD 140,000 annually)
Product feature releases (compliance modules for logistics regulations drove adoption in Indonesia and Thailand).
Burn Rate and Runway
Monthly burn rate increased from USD 180,000 (pre-Series B) to USD 420,000 (post-Series B) as DataFlow hired:
VP of Sales (Singapore-based, managing APAC expansion)
8 additional engineers (building enterprise features and API integrations)
6 customer success managers (supporting higher-touch enterprise accounts)
3 compliance and legal staff (managing regulatory requirements across 6 countries)
With USD 12 million raised and USD 420,000 monthly burn, DataFlow had 28 months of runway remaining (giving them time to reach profitability or raise Series C from a position of strength).
Governance and Founder Control in Practice
Board Decisions Favouring Founders
Li Wei successfully pushed through two major decisions that Series B investors initially opposed:
Geographic expansion priority:Series B investors wanted DataFlow to enter the US market (larger market opportunity). Li Wei argued that Australia and New Zealand were faster wins with lower customer acquisition cost. Using his 3-vote board bloc (Li Wei + independent director + Series A director), he overruled the Series B investors and prioritised Australia first. This decision proved correct, Australia customers generated positive ROI within 9 months.
Product roadmap allocation:Series B investors wanted 60% of engineering resources focused on new AI-powered features (to justify higher valuations for Series C). Li Wei insisted on 50-50 split between new features and infrastructure stability. His board voting bloc approved the balanced approach, preventing technical debt accumulation that would have hurt customer retention.
In both cases, the BVI structure's governance mechanics allowed Li Wei to maintain strategic control despite owning less than 20% of the company.
Employee Stock Options and Retention
ESOP Grants Post-Series B
DataFlow granted stock options to 18 employees (engineers, sales leaders, and senior operations staff) from the 11.5% ESOP pool. Options vested over 4 years with 1-year cliff. Employees understood that:
Their options would convert to BVI ordinary shares (same class as founder shares, not preference shares)
On exit, they would participate pro-rata alongside founders (after Series B investors took their 1x liquidation preference)
If DataFlow reached USD 150 million exit valuation (a reasonable 3x outcome for Series B valuation), employee options would be worth meaningful amounts (a senior engineer with 0.5% options would see USD 600,000+ pre-tax proceeds).
The BVI structure simplified ESOP administration because all options were granted at BVI level under a single BVI share option plan, not multiple country-specific plans.
Exit Optionality: Two Acquisition Approaches (2025)
By mid-2025, DataFlow received preliminary acquisition interest from two types of buyers:
US SaaS platform (indicative offer USD 100-120 million):Wanted to buy DataFlow to expand into Asia. The buyer preferred the BVI structure because their M&A team had standard acquisition playbooks for BVI companies. Due diligence focused on DataFlow Singapore's operations, contracts, and IP, but the deal structure would be a simple share purchase of DataFlow BVI.
Australian logistics software company (indicative offer USD 90-110 million):Wanted DataFlow's technology and customer base. They also preferred buying BVI shares rather than negotiating with multiple Singapore shareholder classes.
In both scenarios, the BVI structure simplified exit mechanics. Acquirers would buy shares from DataFlow BVI shareholders (founders, Series A, Series B investors) in a single transaction, rather than navigating Singapore's multiple share classes and shareholder approval requirements.
Li Wei chose not to pursue either offer (too early, valuation below his USD 150+ million target), but the interest validated that the BVI structure made DataFlow a more attractive acquisition target.
Lessons Learned: Li Wei's Reflections
Eighteen months after completing the BVI flip and Series B round, Li Wei shared his key insights.
Lesson 1: Flip Before Series B, Not After
"We almost made the mistake of raising Series B first, then flipping afterwards. Our lawyers convinced us to flip first. That decision saved us months of complexity. If you flip after investors already own Singapore shares, you need to get every investor to approve the flip, renegotiate their preference share terms under BVI law, and deal with potential tax complications. Flipping before Series B meant we only needed founder and Series A approval, and new Series B investors just bought into the BVI structure directly".
Lesson 2: BVI Simplified Investor Negotiations
"Our Series B lead investor was a Hong Kong VC that had done 40+ deals across Asia. They had a standard term sheet template for BVI companies. When we showed them we were already BVI, they said 'great, here's our standard docs, let's move fast'. If we'd stayed Singapore, we would have spent 6-8 weeks negotiating bespoke preference share terms. The BVI structure cut legal negotiations by half".
Lesson 3: Founder Control Requires Deliberate Governance Design
"Owning 19% of the company sounds terrifying, but I still control most major decisions because we designed the governance structure carefully. The shareholders' agreement separates ordinary shareholder matters from preference shareholder protective provisions. I control ordinary shareholder decisions. Series B investors control only the specific protective provisions. This separation was only possible because BVI law is flexible about share class voting rights".
Lesson 4: Employees Appreciate Exit Simplicity
"When we explained the BVI structure to senior hires, their main question was 'if the company exits, do I get paid?'. The answer is yes, your options convert to ordinary shares, you participate pro-rata after Series B gets their 1x back. Having a simple, clean structure with one class of ordinary shares (founders + employees) and one class of preference shares (Series B) made the equity story easy to explain. Complicated Singapore multi-class structures confuse employees and hurt recruiting".
Lesson 5: Exit Optionality Justifies the Setup Effort
"We spent 8 weeks and legal fees to flip to BVI before Series B. At the time, it felt like a distraction from running the business. Eighteen months later, when we got acquisition interest from US and Australian buyers, I realised the flip was the best investment we made. Both buyers said 'we can move quickly because you're BVI'. If we'd stayed Singapore with multiple preference share classes, due diligence would have taken 3-4 months longer. Speed matters in M&A, buyers lose interest if deals drag".
When Does BVI-Over-Singapore Make Sense for Tech Startups?
Not every Singapore startup needs a BVI flip. Here's how to assess whether it fits.
You Likely Benefit If:
You're raising Series A or later from institutional VCs (not angel investors or friends-and-family rounds)
Your investors are requesting preference shares with liquidation preference, anti-dilution, and protective provisions
You plan to operate across multiple Southeast Asian countries (BVI holding company simplifies multi-country subsidiary ownership)
You expect to exit via acquisition by US, European, or Asian tech/PE buyers within 5-7 years
Your founders want to maintain voting control despite owning less than 50% of the company
You have granted or plan to grant employee stock options to 15+ employees (BVI ESOP administration is simpler than Singapore)
Simpler Alternatives May Work If:
You're pre-Series A and raising only from angel investors or small seed funds (they typically invest using convertible notes or ordinary shares, not preference shares)
Your investors are comfortable with Singapore preference share structures and don't require BVI
You plan to stay Singapore-focused with no regional expansion (single-country operations don't need holding company structures)
You expect to reach profitability without raising additional venture capital rounds (if you never raise Series B or C, the complexity of preference shares doesn't compound)
Rule of thumb: If you're raising USD 5 million+ from institutional VCs who want preference shares, and you plan to operate regionally or exit to international buyers, BVI-over-Singapore makes economic and strategic sense.
Other Southeast Asian Tech Startup Structures
DataFlow's BVI-over-Singapore flip is replicable for other regional startup scenarios.
BVI for Indonesian Tech Startups
Indonesian startups face foreign ownership restrictions in certain sectors (e-commerce, fintech, digital platforms require Indonesian majority ownership or licensing). Many Indonesian tech companies use BVI holding structures where:
BVI company owns the maximum foreign ownership percentage allowed under Indonesian law (often 49-67% depending on sector)
Indonesian founders or local partner owns the remaining stake
VCs invest at BVI level, gaining economic exposure without navigating Indonesian foreign investment regulations directly.
Cayman for Late-Stage or Pre-IPO Startups
Late-stage startups planning US or Hong Kong IPO often use Cayman Islands instead of BVI. Cayman is preferred for listed companies because:
Hong Kong Stock Exchange and NASDAQ are more familiar with Cayman corporate law
Cayman has established case law for public company governance disputes
Cayman filing and disclosure requirements align better with public market standards.
But for Series A-C private companies with no immediate IPO plans, BVI offers the same benefits as Cayman with faster formation and lower fees.
Singapore-Only Structure for Domestic-Focused Startups
Singapore startups serving only the Singapore market (local e-commerce, Singapore fintech, domestic services) often stay Singapore-incorporated. If investors are Singapore-based and familiar with Singapore corporate law, and if exit is likely to Singapore corporates or regional SEA buyers, the BVI flip adds complexity without clear benefit.
What Happens Next
Tech startups raising Series A or later funding rounds from institutional investors use BVI holding structures to simplify preference share administration, protect founder voting control, and create clean exit paths for future acquirers.
We work with Singapore and Southeast Asian tech founders raising growth capital. We help assess whether BVI structures fit your fundraising plans, design holding company and preference share structures, and implement flips before investor rounds close.
Book a free 20-minute Series A/B fundraising structure review. We'll look at your current cap table, your investor term sheet (if you have one), and explain whether a BVI flip makes sense before you close the round. No sales pressure. If staying Singapore is simpler, we'll tell you straight.
Book Your Free Fundraising Structure Review
Exploring different structures? Read about How Family Offices Use Cayman Trusts for Multi-Generational Wealth Protection or learn about BVI Structures for Regional Manufacturing Expansion.
