Securing The Future: Why Asian HNWIs Are Turning To Offshore Jurisdictions

• Published date: 08 March 2023
• Subject Matter: Wealth Management, Family and Matrimonial, Wealth & Asset Management, Family Law
• Law Firm: Carey Olsen
• Author: Ms Rachel Yao

Here, Carey Olsen counsel Rachel Yao reflects on the impact of recent global events such as the pandemic on Asian high net worth individuals and the move towards offshore jurisdictions as a solution for securing wealth by diversifying the geographic location of assets in response to changing priorities.

WHAT KIND OF MARKET VOLATILITY AND GEOPOLITICAL RISKS ARE ASIAN HNWI'S MOST CONCERNED ABOUT TODAY, AND IN WHAT WAYS ARE THEY IMPACTING THEIR APPROACH TO GROWING WEALTH AND SUCCESSION PLANNING?

Rachel Yao (RY): HNWI migration in Asia was a rising trend over the past decade and has not slowed down as a result of Covid-19 border closures and lockdowns. The inability to travel and the rapid growth of virtual meeting applications and software over the past three years caused many HNWIs to reconsider and reshape their lifestyle. Migration flows are expected to increase in 2023 and beyond as families and investors prepare for the post-Covid world.

As US-China and other regional tensions in Asia remain high, wealth and succession planning will become equally important to Asia HNWIs as creating wealth. Affluent individuals are extremely mobile and capital is moving faster than ever to safer destinations.

IN WHAT WAYS ARE YOU HELPING CLIENTS NAVIGATE THROUGH THIS PERIOD OF TUMULT? CAN YOU TALK A BIT ABOUT SOME OF THE INNOVATIVE APPROACHES YOU ARE USING?

RY: Geopolitical and Covid-related difficulties that HNW families have faced over the past few years have resulted in an increased emphasis on succession planning.

Clients' needs during and post pandemic are and will be more sophisticated than ever. Allocation of capital and migration of family members will always have to be considered as an overall package. There is increasing demand from wealthy families in Asia to obtain a second passport or change their citizenship (for a different passport entirely) to enable them to move freely. Being admitted in China, England & Wales, BVI and Bermuda allows me to consider client needs from a multi-jurisdictional perspective and connect those clients with a range of intermediaries to achieve their objectives.

As many Asian HNW families are already familiar with Cayman, BVI, and Bermuda structures, they continue to be used during these tumultuous times and are flexible enough to allow for the changing needs of HNW families. Cayman foundations, as an alternative to trusts, are particularly popular amongst Asian HNWIs familiar with civil law principles and who are open to...