Number 27

ISSUE 27

DON’T KNOW WHERE, DON’T KNOW WHEN...

NEW

HOT SEAT

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PRIVATE WEALTH DISPUTES IN MAINLAND CHINA AND HONG KONG

HNW RELOCATION AND MOBILITY DURING THE ERA OF CORONAVIRUS

EDITOR’S INTRO

Don’t know where, don’t know when WELCOME TO YOUR PCD MAGAZINE. IN THIS EDITION DAVID BELL REMINDS US THAT WE WILL MEET AGAIN. OF COURSE, THE DETAILS OF WHERE AND WHEN THIS WILL HAPPEN ARE ONLY JUST EMERGING, BUT PERHAPS THE BIG QUESTION MIGHT BE ‘WILL WE RECOGNIZE EACH OTHER WHEN WE DO?’

We will meet again!

I’m working with a team of marketeers on a project for a big data business at the moment – we all speak online almost daily, but I’ve met none of them in person. Neither has their marketing director – someone recruited during lockdown who has never even been able to visit the firm’s offices. I’ve also just helped rebrand one of the Geneva private banks – I’m lucky to have started this project back in 2019, so I have experienced their working environment and met everyone in the flesh – doing something as emotionally subtle as this virtually would have been so much harder without the opportunity of being

EDITOR’S INTRO

there and the nuance of a conversation in person. We’ve all adapted brilliantly to life on screen – creating backdrops (both real and digital), choosing work-fromhome ‘uniforms’, and learning the choreography and etiquette of multiple Zoom and Teams meetings. But is the ‘us’ that appears onscreen the same ‘us’ that will walk into an office, club, café or restaurant when lock-down ends? And what about hand-shakes and kisses? Right now – family aside - I can hardly imagine touching another human being. What will be the new greeting norm, and will we recognize one another? I can’t wait to find out!

Thankfully, digital is here to stay.

Social media has come a long way and the events of the past twelve months have no doubt fueled a big digital leap forward. This month the Privateer takes a close look and some of the latest updates and new players.

Read article

I was fascinated to read some of the statistics on HNW individuals’ desire to change location. We’ve witnessed something of a house market frenzy here in the UK, but things are clearly on the move internationally as well.

Read article

The insight into attitudes to passing wealth on in China is compelling too – as someone who is used to working in European wealth management with clients who make intergenerational wealth transfer a top priority, this offers a valuable alternative perspective.

Read article

As ever, there’s so much new to learn from PCD. I hope you enjoy this edition and the exciting digital events we have planned for the weeks ahead. And I hope that, like us, you’re making plans to meet again in person too.

Stay safe!

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WHAT ’S NEXT BY DAVID BELL

What’s next

by David Bell PLENTY OF REASONS TO BE CHEERFUL IN THE UK THIS MONTH AS THE VACCINE ROLL OUT CONTINUES AND THE GOVERNMENT SETS THE PATH OUT OF LOCKDOWN. WE ARE ALL DESPERATE TO BE MEETING AGAIN.

on Unexplained Wealth Orders and their impact for international investors.

Jess Miller, Founder of Strela, gave some advice on Reputation and Risk Management alongside a panel of legal experts discussing the latest cases and developments.

As many of our new webinar series gather pace, we were excited to launch our Entrepreneurs Series sponsored

by Waverton, with guest speakers representing Bosham Capital Advisors, Charles Russell Speechlys and BDO.

We are hopeful to bring our Live event program back in London on Wednesday 1 September at the Langham Hotel.

Keep everything crossed for that! We will keep members posted as we move through the Spring but confidence in a return of events by the end of this year is building.

Watch here

Finally, we are building our team and have hired Amy Rea as Marketing On the Digital front, our content Manager, who will be featuring in our remains as global and popular as ever. meet the team next month. Onwards and In February we launched a 3 part series upwards! on Global India with Barclays Private Bank in Dubai. The first session focused on wealth planning and will cover real estate and other areas as we move through the spring.

We hosted an excellent session with Strela Advisory 4

UPCOMING EVENTS

24 March 2021

UK & EU Series: Move to Switzerland 26 March 2021

UK & EU Series: English Country Estates 31 March 2021

Global India Series: Destination India

View all events 5

H NW R E LO CAT I O N A N D M O B I L I TY D U R I N G T H E E R A O F CO R O N AVI R U S

HNW relocation and mobility during the era of coronavirus THERE WAS AN OVERALL RISE IN RELOCATION ENQUIRIES IN 2020, PROMPTED BY THE COVID-19 PANDEMIC, VARIOUS GOVERNMENTS’ REACTIONS Visit our website TO THE PANDEMIC, CONCERNS OVER THE COSTS OF GOVERNMENTS’ REACTIONS, AND THE IMPACT ON INDIVIDUAL ECONOMIES. Looking forward in 2021, what impact will the year the world has just experienced together have on HNW relocation and mobility? Together with David Conway, Associate Director in the Private Client team at Buzzacott, we’ve reached out to a network of experts for their insight and projections.

of the year. In most years, the bulk of the firm’s enquiries come from emerging markets like India, South Africa, Bangladesh, Pakistan, and Nigeria. In 2020, it was different. Although India remained the firm’s busiest market, its second busiest market was the US market (235% rise in enquiries), its sixth busiest Britain (38% rise), and its eighth busiest Canada (74% rise).

Appetite for relocation

Of course, the factors behind an HNW individual’s decision to relocate varies depending on their country of birth. For example, in 2020, American HNWIs were especially motivated to enquire about relocation because of worries over the general political climate, tax rate hikes if Joe Biden was elected President, and widespread civil protests following the death of George Floyd. British

International residence and citizenship planning firm Henley & Partners reported that, in the nine months to September 2020, they had experienced a near 50% rise in the number of HNW individuals seeking advice on relocating to another country. Globally, enquiries to the firm rose by 25% over the course 6

H NW R E LO CAT I O N A N D M O B I L I TY D U R I N G T H E E R A O F CO R O N AVI R U S

enquirers were particularly concerned about the then unknown effect of Brexit as the deadline for a trade deal was pushed back time and time again.

100 schemes of these types in existence with varying levels of financial risk to a would-be relocator depending on the economic transparency of the jurisdictions offering them. 19 of the G20 nations have specific programmes to appeal to HNWIs, UHNWIs, and other high earners whose skills are particularly sought by individual nations.

The COVID-19 pandemic also prompted many people to change carefully developed plans to relocate in 2020. Tom Hogarth, Wealth Planner at Cazenove Capital says that they “have seen instances where individuals were planning to leave the UK last year for a sustained period of time, either for work or personal reasons, who had their plans put on hold given the restrictions brought about by the pandemic. A number of these individuals will have undertaken planning beforehand following discussions with their various trusted advisers and at times, where deemed appropriate, restructured their assets and investments accordingly so that they were more aligned with their future plans and the jurisdictions where they planned to reside.”

Residency by investment programmes provide HNW individuals with the right to reside in a particular country without being required to actually live there. They're popular among investors who don't want to move themselves and their families abroad but who want the option of living in that country just in case.

The list of countries offering residency by investment programmes includes Canada, Cyprus, Greece, Malta, New Zealand, Portugal, Singapore, Spain, Switzerland, the United Kingdom, and the United States of America.

Relocation options

Citizenship by investment programmes grant (sometimes immediate) citizenship to individuals and their families. As citizens, they and their families then qualify for a second passport and they enjoy all the rights and responsibilities of citizens born in the country. Perhaps the most famous example of such a programme

Countries seeking to attract HNWIs to live in and invest in their countries will offer one or both of the following schemes – citizenship by investment and residence by investment.

According to the OECD, there are over

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H NW R E LO CAT I O N A N D M O B I L I TY D U R I N G T H E E R A O F CO R O N AVI R U S

is in Cyprus where, for an investment the number of HNWIs enquiring of €2,150,000, you can be granted about citizenship-by-investment as citizenship after just six months. opposed to residence-by-investment programmes has increased by 25%.

Countries offering citizenship by investment programmes include the According to Andres Gutierrez, United Kingdom, Malta, Bulgaria, an investment immigration Montenegro, Turkey, Grenada, consultant with CSB Group Dominica, Antigua and Barbuda, Saint in Malta speaking to Mansion Kitts & Nevis, and Vanuatu.

Global, "clients are diversifying... in a pandemic, clients have realised that For countries not offering a citizenship- [citizenship by investment regulations] by-investment programme, you gives an edge against geopolitical risk and would first apply for the residency-by- volatility. They want investment stability, investment programme. In many of they want options for their children." these countries, this involves making an initial investment, living in the HNW relocation, sometimes called country for a specified period of time investment migration, offers “value to to be granted permanent residence, and both investors and their families and then continuing to reside there for long (to) sovereign states and their citizens… enough to apply for citizenship. investment migration is now a standard consideration for international HNWIs For example, in Switzerland, you have who are looking to hedge volatility, create to either form a company employing short term value as well as long term Swiss nationals or pay an annual tax yield through enhanced global mobility”, of between CHF 150,000 and CHF 1 according to Dr. Juerg Steffen, CEO of million to apply for residence. Then you Henley & Partners in an interview with have a wait of 12 years before you can the Investment Migration Council. Dr. finally apply for citizenship. The path to Steffen states that “alternative residence citizenship from residence varies from and citizenship encompass portfolio country to country. diversification, global investment and operations, and the creation of a new inheritance and identity for the family.”

Motivations for relocating

So, in 2021, what will the prime motivations behind HNW relocation be?

Since the outbreak of COVID-19, Many of them will remain just as before.

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H NW R E LO CAT I O N A N D M O B I L I TY D U R I N G T H E E R A O F CO R O N AVI R U S

Tax is an ongoing factor which is why a key part of the Cayman Islands' pitch to HNW individuals is its taxation system. James O’Brien, Sales & Investment Consultant at IRG, told us that "Cayman is a favourable location for HighNet-Worth Individuals for a multitude of reasons, including a myriad of very attractive lifestyle attributes, but one considerable reason is the tax benefits.

Cayman is a tax-neutral jurisdiction that allows companies to operate without local Corporate Tax, Income Tax, Payroll Tax, or Sales Tax. For residents, this also means no Property or Capital Gains tax.

These concessions make operating from Cayman an enticing option".

A connectedness to the rest of the world also offers HNW individuals business opportunities and opportunities to network with like-minded people. In the way we think of Silicon Valley as a hub for technological innovation, the cities and countries to which HNWIs relocate create investment hubs which benefit the host nation and beyond.

To benefit the host nation, it needs to offer relocating HNWIs political stability. On that point, Christopher Fisher, Middle East Director and Relationship Manager at Standard Chartered Private Bank, stated that "with the tragic explosion in Beirut last summer, the ongoing banking crisis there combined with the COVID-19 pandemic, we have seen an increase in clients from Lebanon seeking safety and stability by moving to the UK".

International mobility is particularly important. For HNW individuals investing in citizenship in Malta for example, their passports will give them access to 174 countries (including passport free travel across the EU Schengen Zone). In contrast, a Pakistani HWNI and passport holder only has visa free access to 32 countries around the world. A second passport means a much greater freedom to travel.

Safety and security are also paramount concerns of relocators – no-one would want to move to a country where they or their family members feel unsafe walking the street or feel that their property and assets are under threat.

Monaco and many of the most popular HNW relocation destinations are transport hubs or very close to transport hubs – for example, Monaco is a 7-minute helicopter ride away from Nice Airport.

Read in full online

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HOT SEAT WITH SIMON RODERICK

Hot Seat with Simon Roderick and Sue Nickason PCD Founder David Bell catches up with Simon Roderick, Managing Director of Fram Search with 20 years’ financial services recruitment experience.

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David Bell meets with Sue Nickason of Dart Real Estate; a Cayman Islands-based investor and real estate developer.

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Get involved and raise your profile If you fancy sitting in The Hot Seat, simply contact members@pcd.club to explore how PCD Club can help you raise your professional profile.

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QUIZ

Quiz Cryptic Cartoon: Former political leader

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THE PRIVATEER

The Privateer In the old world, the public uncovered the latest news via TV, radio and television and media gatekeepers controlled the flow of information across these platforms. With the rise of social media and the declining engagement with traditional media, the new focus is firmly on user generated content blended with the sources of information which we historically relied upon.

presented by the rise of the importance of such platforms.

The dispute revolved around access to information via social media platforms and who should pay for access to the output of Australian news outlets.

Why is the growing domination of social media platforms relevant to professionals?

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The dispute between Facebook and the Australian government illustrates the challenges

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The primary reason is the amount of attention they command from our clients and

THE PRIVATEER

Very few can credibly contacts via their Whether or not argue that their clients phones. Very few can Clubhouse is the are “not online” credibly argue that next big thing, one their clients are “not thing is for certain; online”; it is more a question of which platforms change in their dominance platforms they access on a regular basis. over time. Professionals need to be surveying all the available tools in this The second reason is that challenging time for marketing. Email the cost of producing inboxes become swamped and subject content for these platforms to spam filters, potentially blocking is extremely low and the improved prospects from seeing your corporate quality of cameras, mics and editing or official communications. Linkedin software make it possible to quickly is a core bedrock of professional profile create engaging video and articles building online, but how many consider with minimal cost. The opportunity is which other channels they could use therefore readily available. to promote themselves professionally?

How can the various platforms fit There is a lot of hype together to help present a consistent at the moment about professional image? the voice only app “Clubhouse”. If you The secret is having a footprint across haven’t heard of it, Clubhouse is an many of these platforms to give your invite only app with a wide variety of client or prospect the maximum rooms which people can join where opportunity to see you or your company members are discussing topics ranging reinforcing their views of your service. from marketing to religion. Users can You can’t rely on just one method. It dip into any room that looks of interest takes time to build a presence and and participate in the conversation guidance on where to find your clients via a moderator. Many new users online. If you want to learn more about are still trying to work out how to how to utilise social media platforms use Clubhouse most effectively in a to grow your business, tune into The professional setting, but it has some Power Hour, our new monthly webinar definite advantages over video or where we bring ideas from marketing written media: it is quick to produce, and business development specialists live, interactive and disposable. which you can readily implement.

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Contact members@pcd.club for more information 13

P R I VAT E W E A LT H D I S P U T E S I N M A I N L A N D C H I N A A N D H O N G KO N G

Private wealth disputes in Mainland China and Hong Kong THE RISE OF THE CHINESE ECONOMY IN RECENT DECADES HAS SEEN THE COUNTRY APPROACH WHAT MANY INTERNATIONAL OBSERVERS BELIEVE IS “SUPERPOWER” STATUS ALONGSIDE THE UNITED STATES OF AMERICA. GDP has risen every year without exception since 1977 and under the leadership of a government which describes itself as practising “socialism with Chinese characteristics”, the country now has over 150,000 HNWIs with assets worth between $10-$50m, over 11,000 with assets of $50m-$100m, over 6,000 with assets of $100 to $500m, and over 700 with assets in excess of $500m.

reporter He Huifeng. However, in this environment of general concern and uncertainty, many Chinese HNWIs may not currently perceive a greater threat to their wealth - their spouses and family members.

Despite this run of success, Chinese HNWIs are applying for foreign citizenship in greater numbers than before to safeguard their wealth from government-led asset seizures and to “escape a perceived harsher environment In our Greater China series of webinars, for private entrepreneurs at home”, sponsored by Barclays Private Bank, according to China Macro Economy a panel of experts introduced by

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P R I VAT E W E A LT H D I S P U T E S I N M A I N L A N D C H I N A A N D H O N G KO N G

Mark Tucker, Global Head of Wealth Advisory, examined private wealth disputes in China.

Moderated by Richard Grasby (legal consultant at Facey and Associates in Hong Kong) the speakers consisted of:

In Ruben’s experience, “(with) the sorts of internationally mobile families that we're dealing with, when a relationship breaks down, one or both of the parties will often find that he or she is in a position to start divorce proceedings in any number of different jurisdictions.”

Callum McNeil, Partner Walkers in Hong Kong,

at “There's a big difference in terms of financial outcome, depending on where a couple divorce. As a result, we’re Ruben Sinha, Senior Associate at seeing far more wealthy clients ‘forum Bryan Cave Leighton Paisner in shopping’ and often litigating to secure London. the jurisdiction which will be financially most advantageous for them’’.

John Han, Partner at Kobre & Kim in Hong Kong, also discussed ‘’This is particularly relevant for private wealth disputes involving international Chinese families who third-party and governmental litigation perhaps have connections both in the PRC which we cover in a later article. and to Hong Kong. For the financially weaker spouse, there are significant Among the major issues the panel advantages to securing jurisdiction in considered was the threat posed to Hong Kong. The courts there will as a HNW wealth by divorce. starting point take all assets – wherever they are in the world and regardless of who built them up and when they were Marital breakdown acquired - into account and, also, can award maintenance orders often for Ruben Sinha highlights that very lengthy periods of time. Conversely, “matrimonial disputes and across the border in the PRC, the courts family litigation are becoming generally won’t take into account assets far more international in outside China or pre-acquired and gifted nature…very often now we'll wealth. Similarly, maintenance orders be dealing with families who have aren’t generally made’’. connections, assets, and interests often around the world. This in itself raises a This has led to a situation where “the range of issues when litigation starts.” financially weaker spouse will often be

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rushing to file proceedings in Hong Kong in an attempt to secure jurisdiction there.

It’s not that difficult to secure jurisdiction in Hong Kong. For example, it is possible for a party to secure jurisdiction if he or she (or their spouse) has a substantial connection to Hong Kong. So if there are business interests that the family may have in Hong Kong or they spend time there or they have a home in the region, that may be sufficient to start proceedings there. This often comes as a surprise to many wealthy international families. As a result, we’re increasingly seeing intra PRC Hong Kong forum disputes. The difference in terms of outcome can be many, many millions of pounds, so wealthy families will often take a commercial view and decide they’re prepared to litigate these issues at the outset of a case’’.

pre- and postnuptial agreements are not automatically binding in Hong Kong. There is still sometimes a bit of a misconception that these agreements are not that useful or won’t prove effective in the event of a divorce in Hong Kong. That isn’t the case. If a prenup is entered into freely and with a proper understanding of its terms and, broadly speaking, those terms are fair, then the parties will likely be held to the terms of the agreement. The law is developing in this area and is really in a state of flux at the moment. I expect the use of these agreements – particularly as part of wider wealth and succession planning - will become more and more commonplace and the traffic in Asia is very much moving in that direction’’.

According to Ruben, “there's a lot of litigation at the moment around existing agreements and the enforceability of them. Given the kind of wealth which is at stake in the region, I suspect this is a trend that's set to continue and increase over the coming years.”

“Families and their other professional advisors are slowly tuning into the fact that divorce is, putting it bluntly, arguably the single biggest threat to family wealth. As result, they are looking at ways to mitigate that exposure and asset protection in this context has moved up the agenda’’.

International cooperation Wealth disputes are often caused by one or both of the following factors: first, imprecise drafting of the relevant contractual documentation and second, a belief that a beneficiary is in some way being disadvantaged by an agreement. The dispute is then handled

Pre- and post-nuptial agreements have, as a result, “really taken off, particularly in Asia in the last few years”.

“These agreements are recognised and enforceable in China. Currently,

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PRC judges are more likely to recognize BVI decisions if the vice versa is true, and that is what has happened.

via arbitration or through the courts and it is subject to the prevailing law in the applicable jurisdiction. Where assets are held around the world and the case is being heard in China, it gets a lot more complicated. On that subject, Callum McNeil shared his insights on the emergence of cooperation between jurisdictions on private wealth disputes. He stated that recently, “for the first time, a decision of the PRC courts was recognised by the British Virgin Islands Commercial Court. And that was a matter that I was very pleased to be involved in because it is the first time, to the best of our knowledge, that a decision of the PRC courts has been recognized and enforced at common law in the British Virgin Islands (BVI).

“Working with our friends and colleagues in the onshore and mid-shore jurisdictions we are typically finding ways that we can maximise our clients ability to recover their position to make themselves whole, using the tools that are available to them in the jurisdictions that are relevant. What we find is that we can do a number of different things where we have some proceedings in Hong Kong (insolvency is a good context) and parallel proceedings in the Caribbean jurisdiction so that the courts are cooperating together, getting in the value of whatever assets might be out there to satisfy creditors. Typically, it’s not a competition between jurisdictions - it’s really a tool bag and finding in that bag the right tools for each matter and each jurisdiction.

Working co-operatively across jurisdictions we can really leverage our clients’ positions.

“We had an individual who had been arrested in the PRC and subjected to compulsory measures who had guaranteed vast sums to a PRC bank.

The bank had sued in the PRC all the way through to the ultimate appellate Court in the PRC, and had in hand a certificate stating that this was the final judgement The pandemic and and that it could not be revisited. With Chinese history that document in hand we sued at common law in the BVI and succeeded An Kelles, Hong Kong-based business in obtaining a judgement against that development director for Greater China individual, and other related relief. It was at Jersey Finance... an important one because we’re trying to get BVI judgements recognized in the Read in full online PRC as well. This is a reciprocity issue -

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Available now Ideas, energy and inspiration in online marketing & business development bringing you insight from specialists who focus on helping advisors & firms win new business With special Guest: Melanie Goodman, Founder of Trevisan, Geneva

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MEEEETT O OU UTR M MEEM MBBEERRSS• •M

Meet our Members: Laetitia Mikail possible abroad in order to return to Monaco with additional knowledge and experience.

This is very much welcome by our clients as they feel that as a local I am able to assist them with their personal and business affairs both in Monaco and abroad, whilst having a real understanding the Monegasque peculiarities.

What has been your greatest achievement?

Being asked to lecture the course of What do you do for Abacus Trust Wealth Management Planning to Group/Moores Rowland? final year bachelor students at the I work as an International Legal International University of Monaco.

Consultant in the Legal and Corporate department of Moores Rowland in How has your business adapted in Monaco. I joined the company in 2015 light of COVID-19? after qualifying as an attorney-at-law in We shifted to remote working from New York State and solicitor in England the start of lockdown. Whilst it was & Wales. completely new to us, I was delighted to see how we have all adapted smoothly What do you love most about your and fairly quickly. With the immense role? help of the technology team in Monaco Being able to bring my overseas and across the group, it was pretty much experience and qualifications to good ‘business as usual’ within a day or... use in my very hometown. I had always dreamt of learning as much as Read in full online

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E: hello@peregrine.co.im W: www.peregrine.co.im T: +44 (0) 1624 626586 Why not find us on What’sApp? You can now send us a message on +44 (0) 1624 626586 - we’d love to hear from you.

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HEAR FROM OUR MEMBERS

Hear from our Members Monaco Residency: Official Confirmation for British Applicants

By Abacus: Andrew Tailby-Faulkes, Group CEO; Mary-Rose McLean, Head of Legal, Corporate and Yachting Services; Laetitia Mikail-Capparelli, International Legal Consultant; Frederic Mege, Director, Monaco

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The potential impact of an ESG policy on investment strategy

By Oak Group

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“David and his team at PCD have helped Barclays Private Bank pivot to the new ‘virtual’ reality we find ourselves in.”

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