Expanding the global presence of family offices can bring many potential opportunities, but there are also challenges and complexities to consider, a report from Citi Private Bank has highlighted.

Its whitepaper, Asset location & global mobility, explored the key considerations for wealthy families and their offices when living, doing business, and investing worldwide.

Three key trends were identified: The rise of the global family, global transparency and information exchange, and global instability and ‘black swan’ events.

The key characteristics of the world’s most popular family office locations, including the UK, were outlined in the paper, as well as potential exit strategies and contingency plans.

Citi noted that, with more and more people having connections to multiple jurisdictions, individuals needed to understand and address the requirements of the various nations to which they are connected.

Investment portfolio exposure in multiple jurisdictions means that such assets should be examined from the perspective of the jurisdiction in which they are held or domiciled.

When considering the location of family offices, Citi highlighted the importance of assessing jurisdictions’ stability, including economic and political systems, and convenience in terms of where family members live, work and play.

Furthermore, understanding the financial and legal infrastructure, including access to sophisticated financial centres, legal, and regulatory environment was key, alongside administrative considerations.

The exchange of information between countries concerning taxpayers has become “the new normal”, the report noted, driven by technological advancement and governments' needs to boost tax revenues.

“The international exchange of information shows no sign of abating, still less reversing,” the whitepaper continued.

“Indeed, we see further expansion underway, such as the establishment of beneficial ownership registries in numerous jurisdictions, which collect and store data on the true owners of companies, trusts and other entities.”

When looking at expanding into new jurisdictions, the paper outlined several considerations to think about in advance, such as lifestyle, investment, lending, taxes, estate plans, and external advisers.

Finally, the report highlighted the increased global instability since the mid-2010s, most notably the Covid-19 pandemic.

“While we are all still dealing with the full ramifications of the pandemic, many individuals are keenly focused on how to address future black swan events,” it stated.

---