The Ultimate Guide to Offshore family offices for wealth management

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Wealth management has evolved rapidly in a modernized, globalized world. The practice has become essential for high-net-worth individuals (HNWIs) in order to maintain and enhance their wealth. The increase in economic instability, financial regulations, oversight, and creditors has prompted many HNWIs to pursue offshore wealth management solutions, such as setting up family offices abroad. Family offices are boutique financial firms that handle the wealth and assets of HNWIs and their family members. This may include:

  • Asset management
  • Tax planning
  • Estate planning
  • Investment advisory and administration
  • Financial advisory

By setting up a family office abroad, an HNWI can add another complex layer to their wealth management framework, enabling them to double the security around their wealth and open various routes to enhancing it through shrewd, borderless investments and the utilization of tax regimes. There are a plethora of wealth management tools offshore family offices can utilize to help their HNW clients, and this piece will take a closer look at two of those - international mortgages and offshore trusts.

International Mortgages

Real estate has always been a solid way to diversify one's asset portfolio in a safe and profitable fashion. It is an excellent hedge against inflation, especially if done at the correct time with a beneficial leverage rate. The global investment in real estate in 2019 reached $800 billion, and the total current value of the global real estate market is approximately $3.7 trillion. It is a massive investment area that many HNWIs take advantage of to mitigate economic instability. Investing in real estate abroad adds a layer of diversification to that plan, allowing investors to choose dynamic markets with higher ROI rates and arbitrage gains. However, many may shy away from the idea since obtaining financing as a foreigner is more difficult abroad. That is where international mortgages come in. By financing a property abroad, an investor has the ability to choose a favorable country through a mortgage that offers suitable rates. International mortgages work similarly to local ones, with the sole difference being that they are borderless. They allow investors to invest in areas that are more economically stable and provide consistent ROI without having to put up large amounts of money upfront. At NTL Trust, we offer our clients international mortgage services as well as insights into the world's housing markets, providing them with packages that elevate their asset management process to a whole new level.

Offshore Trusts

There are various destinations that are excellent for offshore trusts, but Nevis, the smaller island of the Caribbean nation of St Kitts & Nevis, takes the cake. A secluded island adorned with lush Caribbean greenery and serene beaches, one may assume Nevis is a great tourism destination (which it is) but nothing more. That is folly. Nevis boasts one of the world's most private and exclusive financial sectors. The financial and banking regulations are extremely favorable to investors, and the offshore trust environment is excellent. Establishing an offshore trust in Nevis allows investors to diversify and protect their assets. They can obtain a level of privacy that is unmatched, shielding their assets from creditors and foreign courts. Trusts in Nevis are not bound to foreign court jurisdictions, hence, creditors aiming to target the trust will have a hard time getting to it as they have to file a legal claim within Nevis to do so, but even that comes with its many challenges. To sue a trust in Nevis, an applicant must put up a bond of at least $10,000, and the government reserves the right to increase that value as it sees fit up to $250,000. Creditors then have just one year to follow up on their claim, making it a tedious task by any standard. Trusts in Nevis are extremely safe and private, but they are also highly profitable. Not only does the country have a lenient tax regime, but it is also economically open. St Kitts & Nevis does levy global income, wealth, capital gains, or inheritance taxes, and it is a very crypto-friendly nation. This allows trusts in Nevis to conduct unhindered business on behalf of the investor to maximize their profit and enhance their wealth. St Kitts & Nevis also has a citizenship by investment program, which is very affordable and lightning quick, awarding investors and their family members with a passport and citizenship within a few months in exchange for a contribution to the country's economy. Opening a trust in Nevis is a savvy move, but doing so as a citizen of the country increases the overall security and makes it even more difficult for foreigners to sue, as now they have to address that claim against a financial tool of a citizen. Combining offshore trusts with international mortgages is an excellent way to expand one's portfolio without needing to put one's name on the line, as the trust can conduct that business on behalf of the investor as it is its own entity. To know more about international mortgages and offshore trusts and how NTL Trust can help you manage your wealth within those two categories, contact us today to speak with an expert.