Contributing Editors Anthony Thompson and Nicole Aubin-Parvu
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GETTING THROUGH THE DEAL Private Client Private Client Private Contributing editors Anthony Thompson and Nicole Aubin-Parvu 2016 2016 Private Client 2016 Contributing editors Anthony Thompson and Nicole Aubin-Parvu Wragge Lawrence Graham & Co LLP Publisher Law The information provided in this publication is Gideon Roberton general and may not apply in a specific situation. [email protected] Business Legal advice should always be sought before taking Research any legal action based on the information provided. Subscriptions This information is not intended to create, nor does Sophie Pallier Published by receipt of it constitute, a lawyer–client relationship. [email protected] Law Business Research Ltd The publishers and authors accept no responsibility 87 Lancaster Road for any acts or omissions contained herein. 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Printed and distributed by First published 2012 Encompass Print Solutions Dan White Fourth edition Tel: 0844 2480 112 [email protected] ISSN 2051-5472 CONTENTS Overview 4 Jersey 59 Anthony Thompson and Nicole Aubin-Parvu Edward Devenport and Giles Corbin Wragge Lawrence Graham & Co LLP Mourant Ozannes Bermuda 6 Liechtenstein 63 Jane Collis and Louise Charleson Philip Georg Raich MJM Limited Gasser Partner British Virgin Islands 10 Monaco 66 Hélène Anne Lewis Peter Walford SimonetteLewis Wragge Lawrence Graham & Co LLP Cayman Islands 14 Netherlands 70 Carlos de Serpa Pimentel and Robert Lindley Frank Deurvorst, Lourens de Waard, Jules de Beer and Appleby (Cayman) Ltd Dirk-Jan Maasland Bluelyn England and Wales 17 Anthony Thompson, Nicole Aubin-Parvu, Katie Coles and Nigeria 76 Alistair Robertson Olufemi Adekeye and David Emagun Wragge Lawrence Graham & Co LLP Hughes Partners (Barristers, Solicitors & Arbitrators) France 25 Russia 81 Maryse Naudin Kira Egorova, Olga Pimanova, Anastasia Petrova, Tirard, Naudin - Société d’Avocats Ekaterina Vasina and Elena Skoptsova ALRUD Germany 31 Andreas Richter and Katharina Hemmen Switzerland 86 P+P Pöllath + Partners Natalie Peter, Michael Hamm and Gian Andri Töndury Staiger Schwald & Partner AG Gibraltar 35 Nyreen Llamas Ukraine 91 Hassans Ivan Kasynyuk, Iryna Moroz and Dmitry Koval AGA Partners Law Firm Guernsey 39 Matthew Guthrie, Catherine Moore and Mark Torode United Arab Emirates 96 Mourant Ozannes Anthony Thompson and Alastair Glover Wragge Lawrence Graham & Co LLP Ireland 43 Aileen Keogan United States 100 Aileen Keogan Solicitor & Tax Consultant Stephen K Vetter and Eric Dorsch Kozusko Harris Duncan Italy 48 Marco Cerrato and Alessandro Bavila Maisto e Associati Japan 52 Kenichi Sadaka, Kei Sasaki and Akira Tanaka Anderson Mōri & Tomotsune 2 Getting the Deal Through – Private Client 2016 OVERVIEW Wragge Lawrence Graham & Co LLP Overview Anthony Thompson and Nicole Aubin-Parvu Wragge Lawrence Graham & Co LLP* As advances in technology and communication contribute to an ever- successor generation and an awareness of the vital importance of a stable shrinking world, more people than ever are living an international exist- jurisdiction in which to locate their wealth. ence, owning property in several different jurisdictions and dividing their Particularly in the case of Muslim and many Latin American countries, time between them. At the same time, their children are moving to differ- the law imposes strict inheritance rules upon their assets, either through ent places and starting lives and relationships in countries with widely dif- shariah law in the case of Muslim countries, or a civil system of forced heir- fering cultures and legal and tax systems. ship. While many wealthy individuals are happy to comply with these rules Wealthy people who are deciding where to live or invest, or both, to a greater or lesser degree, they may, nevertheless, wish to maintain some tend to make their decisions according to a number of factors that remain degree of control over the disposition of their property. Accordingly, they largely true across the world: may choose to invest in jurisdictions without such rules and seek wealth • stability of the economy and tax system; structures that can assist them to plan as they wish to. • security of the person and property within the jurisdiction and a strong For individuals in all of these jurisdictions, and as a general rule rule of law; among the wealthy wherever they live, confidentiality and privacy are of • respect for family life and a developed educational system; and great importance. This importance may be heightened by fears of kidnap • a thriving environment in which to do business. – a significant concern in Latin America – or, not uncommonly, as a result of uncertainty over the rule of law within their own country. Whatever the In many cases, not all of these factors will exist in the same jurisdiction. cause, it tends to lead to a focus on careful structuring of assets through For example, a country may be a good place in which to do business but not asset-holding vehicles in order to maintain privacy and protection. necessarily an ideal place to bring up a young family or to own property. Accordingly, many wealthy people divide their lives and investments Tax and the global fight against its evasion and avoidance between different jurisdictions. As a result, they find that they may be Over the past decade the fight against tax evasion and avoidance has regarded as resident in more than one country for the purposes of tax, and become global. Governments realise that as their citizens increasingly that different systems of law apply to the succession of their property in hold business and personal interests in different countries, the reach of different jurisdictions. For example, an individual’s domicile may be the the tax system also has to become international. Since the global banking critical factor in determining succession to his or her property in one juris- crisis in 2008, the subsequent recession and ongoing financial problems diction, while nationality may be the key determinant in another. One within certain countries in the EU and elsewhere, the need for individual country may permit complete freedom of disposition over an individual’s countries to refresh their coffers by extracting as much tax revenue as pos- estate, while another has strict rules as to the categories of heirs who may sible has added to their determination to seek out sources of additional tax. inherit property, and in what shares. The early targets of the fight were the international offshore finance Accordingly, before wealthy individuals move to or invest in property centres providing low-tax safe havens for international assets. The efforts in a new country, it is vital that they understand how the rules that apply to of the Organisation for Economic Co-operation and Development (OECD) their personal lives, their property and their tax status may change. and the Financial Action Task Force (FATF) have borne fruit, forcing such jurisdictions to comply with stringent international regulatory require- Wealth trends ments and information exchange obligations in order to avoid being black- For many generations, the developed countries of the West were the pri- listed as uncooperative tax havens. mary focus of private client lawyers and other professionals focused on The OECD in particular has done much to encourage jurisdictions, individual and family wealth. It was in the West that concepts such as trust whether ‘tax havens’ or otherwise, to sign tax agreements enabling law in the common law world and the civil law foundation developed as exchange of information between countries regarding the ownership of vehicles to protect and manage wealth for the benefit of generations to assets. Initially, in the United Kingdom and other countries, so-called ‘tax come. amnesties’, both unilateral and bilateral, such as the present Liechtenstein While North America and Europe still contain the largest, and growing, Disclosure Facility (LDF) and offshore disclosure facilities between the number of ultra-high net worth (UHNW) individuals (those with invest- UK and each of its Crown dependencies (the Isle of Man, Guernsey and able assets of US$30 million or more), it is the economies of the Middle Jersey), have enabled taxpayers to repay their undisclosed tax liabilities, East and Africa, where the UHNW populations are growing the fastest, particularly those offshore, with lower rates of interest and penalties than despite circumstances in both regions that raise uncertainties about their would otherwise have been the case. These facilities are due to close at long-term growth potential, not least, in the Middle East, the crisis in Syria. the end of December 2015. Other initiatives, such as agreements between Asia ranks third in terms of its UHNW population and wealth, but per- Switzerland and a number of other European countries, including the UK, formed less well than expected last year, largely due to slower growth than have sought to ensure that tax obligations are regularised for the future as the regional average in Japan and China. Latin America and the Caribbean well as the past. are increasingly jurisdictions for the wealthy and, despite the growth rate The US Foreign