Q: How do private banking services and offshore private wealth structures work together?
A: Private banking services and offshore private wealth structures work very well together and complement each other.
Private Banks are able to offer a wide range of banking, investment and financial services to maximise the growth and value of a client's investments.
Offshore private wealth structures (such as companies, trusts and foundations in the BVI, Cayman, Guernsey or Jersey)
provide the legal framework for the ownership, control and protection of those investments for the benefit of the client.
For example, a private bank may provide investment and wealth management advice in relation to a portfolio of securities and those securities may be owned by an offshore private wealth structure such as a BVI law trust or a Guernsey foundation for the benefit of the client and his family. The private banking services provide investment expertise. The offshore private wealth structure (a trust or foundation in this example) provides the client with security and certainty by ensuring that the assets are available to benefit the client and his family but are held in a safe, well regulated, tax free jurisdiction with internationally respected laws and independent courts.
Q: What are the potential benefits for Chinese individuals of using private banking services and offshore private wealth structures?
A: The principal benefits of private banking are breadth and depth of service. Breadth of service meaning the wide range of specialist banking and financial services which are available (including investment advice, wealth planning, access to specialist financial products, forex and treasury services, art and collectibles advice, philanthropy advice, etc). Depth of service in relation to the degree of time and attention that the bank's staff can devote to each client and the degree to which the bank can offer products and services that are best suited to the client's specific needs.
The primary benefits for a client of offshore private wealth structures are:
- Succession planning - the potential to transfer assets to children, grandchildren or other family members at the time and in the way which is best for the client and which is certain and secure and which avoids costly family disputes;
- Asset protection - the potential to protect assts from the claims of creditors;
- Taxation - the potential to avoid, minimise and/or defer tax in a way which complies with relevant tax laws;
- Confidentiality - the potential to limit the amount of publicly available information about the client's assets and affairs;
- Continued client involvement - the potential for the client to remain involved to some extent in the decision-making relating to assets even after the offshore private wealth structure is established;
- Certainty - the leading offshore financial centres (such as BVI, Cayman, Guernsey and Jersey) are politically and financially stable, independent, have clear laws, have experienced, independent and efficient courts and have well regulated service providers (such as lawyers, trustees, etc).
Q: As for Chinese clients, what are their biggest considerations in terms of choosing offshore legal and fiduciary service providers? What are their favourite jurisdictions now?
A: When Chinese clients choose their offshore legal and fiduciary service providers, it is very much relationship driven, in that they are looking for a trusted advisor who they can communicate well and being able to rely upon on a long-term basis. It is important to Chinese clients that you can speak in their own languages, meet with them face to face, and understand their cultures and the onshore environment in which they operate in (including some of the relevant Chinese regulations that may impact the use of offshore structures). In Asia, according to a number of independent research reports, Cayman and BVI are ranked as top jurisdictions of choice.
Q: As for Ogier, what are you going to do to expand your client base, especially those from China and other Asian countries? What are your advantages in terms of providing services to Chinese clients?
A: Ogier has recognised the needs of Chinese clients and therefore was the first Offshore law firm to have opened an office in mainland China with full-time staff on the ground. We can explain the use and benefits of offshore structures in their own languages and providing long-term client support on the ground.