Asian private equity and offshore finance structures are showing great potential for growth, with the right offshore strategies having the capacity to achieve positive solutions onshore, according to the global offshore law firm Walkers.

Asia has enjoyed significant growth in foreign direct investments over the last five years, with China leading the way. Over this time, thousands of companies have been incorporated in the British Virgin Islands and the Cayman Islands to facilitate such investments, although legal restrictions have been conditions challenging.

"Arguably, the enforcement of domestic security in Europe and North America is more dependable than domestic security in developing markets. However, where there is some uncertainty about the enforceability of domestic security, which is sometimes the case in developing Asian markets, offshore security and structuring are integral," said John Rogers, the head of finance and corporate for Walker's Singapore unit, in a statement.

The recent worldwide financial crisis has created a shift in financial centres, placing Asia at the helm. Moving forward, these changes are likely to also impact on how financial agreements are forged.

According to Walkers, achieving the right outcome involves working together with the onshore lawyers in the relevant market from the outset. The offshore enforcement strategy for an Indonesian asset, for example, may be different than the strategy for a Chinese asset or an Indian asset.

"Offshore-onshore interaction has become a necessity to favorably resolve restructuring and insolvency issues, particularly in the Asian markets. When it comes to pre-emptive enforcement of offshore security, the Cayman Islands and the British Virgin Islands are seen as creditor friendly jurisdictions," said Antonia Hardy, head of Walkers' Global Finance & Corporate Group.

"Offshore services often provide part of the solution. However, the strategic analysis prior to the enforcement is absolutely crucial," she added.