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CRE Insights Blog

Family Offices in Offshore Tax Havens

This video talks about whether most family offices are based in offshore tax havens or not. It was created in the Cayman Islands while Richard C. Wilson was traveling there to speak at an industry event.

Hello, this is Richard Wilson and today I’m coming to you from the Grand Cayman Islands. I’m here on seven mile beach, where I just gave a speech yesterday on capital raising and family office investing. And what I want to talk to you about today is really answering the question; are family offices based in offshore tax havens? Being in one right now in the Cayman Islands, I’ve gotten more perspective on this question. And traveling around meeting with clients and giving speeches in different countries that are known for being tax havens to some degree, has given me some more insights as well. So I wanted to make it really clear.

Basically, no one offshore tax haven is the same, but many times these niche small places such as Bermuda, or Malta, or the Cayman Islands don’t have that many family offices actually based on the island with physical teams here and serving clients face-to-face here. There are a lot of banks, there’s a lot of banking activity, and there’s a lot of family offices and fund managers, investment fund managers, that have legal fund formations here. But really, there’s not that many teams on the ground serving ultra high net worth clients here in the Cayman Islands. There’s a few reasons for that.

Most of the time, ultra high net worth individuals are served by a family office that’s relatively close to their home base. And a family office needs to grow their clientele, assuming they’re a multifamily office, by attracting more ultra high net worth individuals. And the reality is in the Cayman Islands, there’s not that many people that actually live here. There’s not that many people that work here. There’s not a great big school system, there’s not a large workforce. There’s not a lot of large businesses creating a ton of wealth for the business owners here on the island, except for in banking and some tourism exceptions.

So, if you look around the world, lots of times, if you want to narrow it down to the tax haven locations that might have a lot of family offices versus not, I would really focus on where the most ultra high net worth professionals are bases versus not. So in Zurich or in Monaco or in Singapore, there is more of an ultra high net worth population in those locations and they are tax efficient environments. Versus other places such as Malta and Cayman Islands and Bermuda, or places like Panama, there’s just not as many ultra high net worth individuals.

That’s something that’s going to be obvious to some of you who work in the industry or who run family offices, but I get that question quite often of how many family offices are based in places like this and why aren’t there more or, how can we work with family offices in that area? So I hope this clears up that issue. This is Richard Wilson, and thanks for joining me.

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Richard Wilson

Richard Wilson

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