Tax compliance is one of the highest priorities for Asian high-net-worth individuals (HNWI) and ultra- high-net-worth individuals (UHNWI) when considering an overseas structure, according to Jersey Finance which was formed in 2001 to represent and promote Jersey as an international financial centre of excellence.
“The future for International Financial Centres – Views from Asia’s Wealth Management Market” reports says this is driven by a number of recent global and local regulations, covering disclosures and cross-border exchange of data.
According to the report’s survey findings, most respondents believe their wealth clients in Asia are looking for better structures to adapt to the new global regulatory rules and compliance conventions. HNWI’s are now motivated by tax transparency and compliance in their use of International Finance Centres (IFCs).
More than 46% of respondents believe succession planning is the key motivator for selection of an IFC for Asia’s HNWI and UHNWI. Only 4% believe their clients are searching for privacy and confidentiality.
89% of respondents said their Asian clients are fully aware that they need to address issues relating to transparency, tax and existing structures. However, 80% of the respondents think Asian clients are not well prepared for wealth transition from one generation to another.
Despite this, the findings show that younger generations, those in their 20s to early 40s, are far more globalised and increasingly appreciate the importance of transparent wealth preservation and planning.
Additionally, half of those surveyed indicated that Chinese HNWI families will adapt “slowly and painfully”. This is largely because many are only recently mobilising their wealth and families into a more globalised context.
Geoff Cook, CEO of Jersey Finance said: “Chinese HNWI and ultra-HNWI clients have been looking for new wealth management options, especially cross-border solutions, to diversify, protect and grow their wealth for some years.
“In the face of a more sophisticated Asian market, practitioners and IFCs need to clearly show their quality of service, depth of expertise and consistency of advice to match the dynamic client needs. In particular, there is a clear opportunity for Jersey to provide some vital leadership with its forward-thinking approach to compliance with international regulations, which sets it apart from the competition.”
The survey, conducted by Jersey Finance and publisher Hubbis, focuses on Asia’s wealth management community’s view on the future for offshore structures, as well as key motivations and barriers of HNWI and UHNWI when considering their investment options.