thought leadership by Carlyle Rogers Barrister CARLYLEROGERS
WHERE SHOULD CITIZENSHIP BY INVESTMENT (CBI) SIT WITHIN A HIGH-NET-WORTH INDIVIDUAL’S (HNWI) WEALTH MANAGEMENT STRATEGY?
he answer to this question is plain and simple: CBI should sit at the centre of a HNWI wealth management strategy as opposed to being on the periphery where it has always traditionally been. In other words, consideration of CBI options should be the driving force, or at least one of the central driving forces of any such strategy. While in the past, tax rates and financial privacy issues were vital in the crafting of a wealth management strategy, recent changes in the international tax architecture have made that approach unfeasible. Therefore, in order to understand why CBI must and can only sit at the centre of a HNWI wealth strategy, one must examine these changes. Driven by the European Union, G20 and promulgated through the Organisation for Economic Cooperation and Development’s BEPS (Base-Erosion and Profit Shifting) project, economic substance rules in the jurisdictions of domicile for companies engaged in activities such as banking, insurance, fund management, financing and leasing, shipping, intellectual property business, distribution and service centres business, headquarters etc, have been implemented. Saying that, I predict that in the future, all companies, irrespective of the activity they are engaged in, will have to comply with these newly implemented economic substance rules. In the past, the wealth management industry and CBI didn’t exist side by side but in two parallel and separate
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THE CITIZEN
