Kate Clouston highlights key benefits of Guernsey’s private client offering
THE LATIN AMERICAN market is a rapidly growing area of interest for private client business. RBC Wealth Management and Capgemini’s World Wealth Report 2015 underlined this fact, reporting that there are more than 530,000 high-net-worth individuals (HNWIs) in the region, with wealth of around USD8 trillion. Guernsey has a long tradition of providing services to Latin American clients. For many such clients, Guernsey’s proven stability, close proximity to London and access to all the major markets have been key factors. Guernsey service providers also employ staff with the language skills to make doing business in the region easier, and conduct regular visits to Latin America to meet clients. For those seeking to do business in Europe, Guernsey also offers geographical advantages without all the implications of operating in a jurisdiction that is a full member of the EU. HIGH STANDARDS Latin American clients are increasingly looking beyond the perceived advantage of lower pricing in Caribbean finance centres and recognising the compelling proposition offered by jurisdictions like Guernsey. HNWIs understandably seek solutions that can provide safe and secure succession, inheritance and asset planning in a jurisdiction fully compliant with international standards. For example, Guernsey is recognised by international organisations as meeting robust standards in terms of regulation and tax transparency – achievements with added significance following the global financial crisis. In 2011, the International Monetary Fund reported Guernsey as being ‘compliant’ or ‘largely compliant’ with 47 out of 49 of the Financial Action Task Force’s Recommendations on combating money laundering and countering the financing of terrorism – so far the highest standard of any jurisdiction assessed. In October last year, Guernsey was also one of 51 jurisdictions to commit to the OECD’s new Common Reporting Standard as part of the ‘early adopters group’. OVERSEAS INVESTMENT Recently, investors have increasingly set their sights overseas, aiming in particular to acquire and hold international residential and commercial property. Guernsey’s finance industry, established for over 50 years, has built up considerable expertise in working with foreign investors in this area. The past decade has seen a number of Guernsey wealth-management and real-estateacquisition structures established to facilitate investments, as individuals and their families seek to place assets in reputable jurisdictions that offer experienced, knowledgeable service providers. For foreign investors, direct ownership of real estate has to be considered in terms of unforeseen tax implications – e.g. property taxes, stamp duty and inheritance tax. In Guernsey, the structures primarily used to hold real estate and address these matters are companies, limited partnerships, private trusts, limited liability partnerships and unit trusts, such as the Guernsey property unit trust. It is also possible to use a Guernsey incorporated real estate investment trust. FAMILY OFFICES Besides international property investment, Latin Americans often seek a family office service from their wealth managers. This can involve help with planning the succession of the business empire,
“Guernsey’s proven stability and access to all the major markets are key attractions”
handling the family’s property and liquid wealth, attending to the needs of family members, philanthropy coordination and asset protection. Guernsey’s finance industry has such depth and breadth that it is well placed to provide the widest scope of family office services – at a high quality. This is particularly the case as the island continues to develop its world-leading investment fund and private equity sectors, the success of which is due in part to the wide variety of robust tax-neutral structures available under local legislation, which can be used to hold assets and investments of all types. INNOVATION Guernsey’s wealth-management sector is made up of 150 lead corporate licensees, ranging from local, boutique providers to large, multinational organisations. The island is renowned for being dynamic and forward-thinking, as demonstrated by its tailored foundations law, the launch of 2-REG, the Channel Islands Aircraft Registry, and our world-first image-rights legislation and register. Such developments indicate that Guernsey’s hard-won reputation for creating an environment synonymous with innovation and high standards is set to last.