Private Client and High-Net-Worth Individuals’ Malta Solution

The rapidly evolving regulatory environment in the private wealth sphere has created a shift in the way that high-net-worth individuals (HNWIs) manage their wealth.

While many of their concerns about wealth management and administration have remained constant over the last quarter century, it has become critical that the solutions to these concerns be reframed in a more current, proactive and, most importantly, regulatory-compliant manner. Solutions centered upon tax-optimization, once a key area of focus, have arguably become less important and effective at addressing HNWIs’ concerns.

What types of regulatory changes are impacting HNWIs?

These massive shifts in the regulatory landscape have been led by changes to the anti-money laundering rules. Additionally, tax authorities’ worldwide drive to claim tax revenues together with the diminishment of bank secrecy have pushed wealth management structures towards full transparency. This is just the tip of the iceberg with the more recent addition of beneficial ownership rules adding to the regulatory deluge.

As a result, wealth administration services must factor in these ever-changing regulations in order for wealth planning strategies to be properly executed.

Where can HNWIs turn for relief from these burdens?

Alter Domus’ Przemyslaw Koger explains the trends observed in the private wealth space of late.

“We’ve seen several clients looking for a viable jurisdiction for the repatriation of their private wealth structures into Europe and with the uncertainty surrounding the Brexit decision in the UK, we’ve seen many of them turning to Malta as their jurisdiction of choice.”

Malta presents significant benefits to those in the private wealth sphere. Many of the benefits are derived from Malta’s EU membership, highly skilled workforce and flexible legal system which recognizes both common and civil law entities.

In Malta, company legislation is based on English Law concepts, allowing for the simplified and streamlined re-domiciliation of entities. Re-domiciliation rules in Malta allow companies incorporated outside the European Union to easily enter into the EU. Under certain circumstances, re-domiciliation even provides an opportunity for the revaluing of assets to market value.

Recently, re-domiciliation rules were extended further to allow foreign organizations such as foundations to re-domicile in Malta, increasing the options for HNWIs looking to continue their wealth management structures into Malta.

In which scenarios are HNWIs re-domiciling?

Recently, Alter Domus Malta handled a mandate to re-domicile a Guernsey trust structure to Malta. The trust was created to hold property settled by the settlor for the present and future needs of family members.

The entities that were brought into Malta also included a private trust company (PTC). The PTC was re-domiciled within a period of three-months following the submission of required documentation to the Malta Registry of Companies (MRC) and the Malta Financial Services Authority (MFSA). As a result, the PTC was able to re-domicile in the EU without the need for any major changes to its structure. It immediately began to benefit from the flexibility associated from the semi-regulated status granted through the MFSA registration.

Few jurisdictions are able to provide the capability of re-domiciling existing structures with minimal intervention in the structure and the avoidance of traditionally high legal and administrative costs.

What can Alter Domus do?

Not only can Alter Domus’s teams of experts help ease the process of re-domiciling entities to an onshore jurisdiction, but according the Przemyslaw Koger, this transition can be further complimented by a range of comprehensive services created specifically for HNWIs.

“When high-net-worth individuals re-domicile their entities in Malta, they benefit from becoming operative in a robust jurisdiction, allowing for cost optimization. Even more impactful though is the ongoing support they receive once they arrive.

“Our Wealth Administration Solution, or wADs, is one of the tools we offer to our private clients because we realize that re-domiciling is only a first step. Once they have begun operating in Malta, they still have some of the same lingering problems they faced before. Many struggle to formulate a global, top-down view of their wealth and many have lost track of their assets’ performance at given times. The wADs tool was created to put control back into their hands and help them to professionalize the way that they manage their wealth. This is just one of the many ways we’ve helped HNWIs to further improve their overall structure.”

In addition to the wADs tool, Alter Domus Malta provides their private clients with an entire range of services to complement their re-domiciliation including the provision of registered offices. These private clients are able to work with specialized trust and private clients’ teams with experienced directors familiar with the regulatory environment and expertise across multiple jurisdictions. By maintaining working relationships with the top accountancy and law firms, clients are fully-equipped to take advantage of all the opportunities that re-domiciling in Malta brings.

Rather than becoming burdened by the ever-changing regulatory landscape, HNWIs who turn to re-domiciliation as a means to safeguard their assets and simplify their administration are the ultimate winners.