How to Create a Family Office at the Price of a Passport
Contributed by Mundo
25 August, 2021
A family office is a unique combination of structures which protects and grows family wealth intergenerationally in a way that protects the families assets from inheritance taxes and disputes, creditors, bad management decisions and optimizes taxation in perpetuity. The methodology of running a family office is set out in our special series of articles.
To summarize the family office structure can be set out in five steps which Mundo calls its five-step walk to freedom or our Forever-Free strategy. These are:
- Establish a second passport
- Establish a Family Office foundation or trust
- Establish an operating company held by the foundation
- Establish a personal tax residency
- Organize wealth management and banking for your operating companies
The above structure properly established by professionals is a Fort Knox of asset protection and is completely impenetrable and cannot be attached by creditors, ex spouses or partners, inheritance disputes or indeed anyone.
Now you would wonder why a small island with only about 52,000 people would be one of the best places in the world to have your family office structure. Indeed if you have any doubts do a careful analysis of over 2000 billionaires and multimillionaires who have taken up St. Kitts and Nevis citizenship and opened bank accounts and trusts in Nevis. But you have to look hard because Nevis protects the banking and information of its citizens to such an extent that there are criminal penalties for anyone releasing any banking, registry or other information. So what we write here comes directly from the experience of our experts who have established over 200 family offices in Nevis for the rich and famous.
Why Nevis Is One of the Best
Step 1: The Passport. The Nevis passport is the oldest and most prestigious CBI product available today. St. Kitts and Nevis has been very careful to protect the reputation of its CBI program and the confidentiality of its citizens. Indeed having a Nevis passport not only allows your family and its dependant members to travel to over 157 countries but also guarantees full privacy for all applicants so that no other organization can receive information from St. Kitts and Nevis as to whether or not you are a citizen. Confidentiality of citizenship is guaranteed by law.
STEP 2: Foundation. As a Nevis citizen having a multipurpose foundation in Nevis which is a local taxpayer (Nevis permits registration of the multipurpose foundation as a local taxpayer with only 1% tax) means that the foundations beneficiaries are not listed in any open registry. This gives your Family Office a complete asset protection and confidentiality solution and it is the backbone of your family office structure.
Under CRS rules the reporting goes back to Nevis as the foundation is a local taxpayer. This can be seen from a close reading of the Nevis' Multiform Foundations Ordinance 2004 and the Nevis banking law as well as analyzing the convention itself. As Nevis law on foundations and trusts is based directly on the British Commonwealth system the Nevis trusts and foundations have over 600 years of British jurisprudence behind them, In short these structures guarantee privacy and confidentiality.
STEP 3: Operating Company. A second layer of asset protection and confidentiality is added by establishing an LLC in Nevis which is owned by the foundation. Nevis' Companies Act guarantees confidentiality for the LLC so that its members (owners) are not publically listed, further the managers of the LLC are also not listed in a public registry. The LLC is owned by the foundation, so again as an operating structure the reporting goes back to Nevis which of course does not tax foreign sourced income, so this becomes the operating structure of the Family Office.
STEP 4: Tax Residency. As a St. Kitts and Nevis citizen you only need to have a local address and do some steps to qualify as a tax resident.
Further the tax residency can also be combined with other tax residencies such as Panama in case you want to be out of nevus the entire period of time. This means that your personal information will only be reported to Nevis and as a citizen this information will not be released to third parties. This gives you a third layer of protection. Nevis tax residents pay zero tax on their worldwide income, no death duties, no inheritance taxes, and no wealth taxes. This is the best possible number when it comes to personal taxation. Thus, when you multipurpose foundation (which pays a flat 1% tax on profit) pays you income into your Nevis account your tax is a beautiful perfect zero.
Under The CRS reporting rules banks and other financial organizations must report currently to the place of habitual residency and tax residency of the individual. In this case again this is Nevis so the wheel of information is closed within itself like a tight circle.
STEP 5: Banking. Nevis banking law holds the information of its clients in complete secrecy. This is especially so if the Client is also a Nevis citizen and his funds are held in a multipurpose foundation. Indeed in Nevis bankers who disclose the information of their clients to third parties without a local court order are subject to civil and criminal penalties.
STEP 6: Crypto currency. Whilst the traditional five steps are already one of the best Family office structures you can possibly establish, St. Kitts and Nevis legislators have made it easy to take the sixth step which is crypto currency holdings. Now we all know that the world's financial system is collapsing and that governments are desperately trying to tax crypto currencies in various jurisdictions by taxing and regulating the structures that hold them. Well that is why St. Kitts and Nevis has established a perfectly easy and legal way to hold and trade in crypto currencies under its current law by enacting crypto currency legislation. Indeed your Nevis structure is now perfectly entitled to trade, invest and create crypto currencies and tokens on behalf of third parties by simply applying for licensing. Even better if your structure is doing it for its own family office needs no extra licensing is required and tax is only 1% if properly established .
Further Nevis Banks will accept the profits made from crypto currency trading in accounts.
What Mundo Can Do for You?
Mundo has partnered with experts from Nevis top and oldest Trust companies , Nevis top CBI providers and by far the best Family office Bank in Nevis (with branches all over the world ) to provide your new or established Family Office with the best and indeed bets priced Family office package available.
In this package we establish the following structures simultaneously in a period of 3 months for the complete package
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