Cases

Location Evaluation for the Trust Structuring Division of a Bank on behalf of an International Management Consulting firm

Challenge

A European bank was looking to identify and evaluate Trust Locations and Booking Center Locations as alternatives to the existing offshore financial centers. Their Trust Structuring Division catered mainly to high net worth individuals, with sizeable offshore assets, from Germany, UK, France, Italy and other EU nations. The Bank short listed New Zealand as an option for Trust Location, and also wanted to evaluate Singapore and Hong Kong as Booking Center Locations. The Bank was also looking to develop a wealth structuring strategy for their clients that ensured minimal disclosure, and define some generic trust structuring options. The Bank also wanted to be clear about client information required for such services at the locations identified, and the subsequent disclosure requirements to the governments of the Trust Location as well as the Booking Center Locations.

Our Approach

To undertake a location evaluation for the trust structuring division, UC adopted the following approach:

  • Understood the generic drivers for creation of offshore wealth management structures, with a focus on Trusts
  • Conducted exhaustive secondary research on New Zealand’s jurisdiction and other characteristics such as a Trust Location. Key evaluation parameters included – the economic climate, the trust law, taxation and disclosure requirements; and highlighted the advantages of New Zealand as a Trust Location
  • Also reviewed Singapore and Hong Kong as Booking Center Locations based on their – economic and political stability, infrastructure and communication facilities, legislation governing offshore funds, banking privacy and disclosure laws, taxation policies and other legal risk parameters
  • Interviewed wealth structuring experts for their perspective on the locations evaluated
  • Defined a set of trust structuring options based on generic client objectives, highlighting the features and pros and cons of each
  • Summarized the disclosure requirements for each option, depending on the combinations of locations used for formation of the Trust and for booking of client assets

Impact

The client received a detailed understanding of dynamics of wealth management structures in the three locations.