FOREWORD | OUR RESEARCH | 2020 AND COVID-19 | 1. TRANSPARENCY | 2. RELOCATION | 3. FAMILY & GENERATIONAL WEALTH | 4. THE ADVISER OF THE FUTURE | ABOUT BDO
COMPETING CONCERNS | NAVIGATING PUBLIC POLICY AND POLITICAL UNREST | LONGER TERMTRAJECTORY, SHORT TERM DISRUPTION | CONCLUSION
COMPETING CONCERNS RELOCATION
Those with business interests will value stability along with a reputation as a financial, technology or investment centre with a strong labour market. The events of 2020 have potentially thrown new players into the mix of popular relocation destinations, as global crisis has shone a light on truly stable jurisdictions with strong leadership figures and well-coordinated crisis responses. One Singapore-based wealth management expert notes, for example, that “New Zealand and Australia may grow in attraction as places to invest and locate”. In many ways the travel restrictions imposed in 2020 have caused focus to shift back to family ties and local connections. Comfort, confidence, and security have joined ‘stability’ as watchwords. Capital location may be less of an issue in a globalised world, while for human relocation, a Channel Islands-based relocation expert observes that “more exotic destinations may be less attractive as the focus is on quality, across infrastructure, healthcare, social, political and legal systems where people feel comfortable and confident”.
to ‘vote with their feet’ and relocate in response to tax and public policy reforms. This can be relocation away from a given jurisdiction because of unfavourable policy changes, or relocation to a jurisdiction because of favourable incentives. The imposition of various forms of wealth tax and high levels of income taxation have seen French wealth owners seek residency elsewhere over the years despite their homeland’s lifestyle attractions. Governments understandably need to recoup revenues in the face of recession, but “nobody has made a wealth tax work,” observes one private office financial planning specialist. With tax hikes expected in many jurisdictions as they seek to recoup funds invested in COVID-related support schemes, questions around relocation may once again rise to the fore. A Swiss adviser points out that in Europe, “Portugal, and to a lesser extent Italy, have grown in popularity”. New tax systems for HNWIs in both jurisdictions, in tandem with the lifestyle choices offered in terms of climate, cuisine and leisure activity, could prove attractive as global recession deepens. With lifestyle and culture identified by 72% as a dominant relocation determinant, and tax by 64.8% (Graphic 6), jurisdictions that marry both will likely entice.
THEVIEW FROM SINGAPORE KYLIE LUO | Head of Private Client Services, BDO Singapore
This year, theworldwas facedwith one of theworst health, economic and social crises it has ever experienced. Here in Singapore, we have seen theGovernment introduce the Resilience Budget, the Solidarity Budget, the Fortitude Budget and Ministerial Statements to complement the Budget for 2020 and to address the rapidly evolving COVID-19 pandemic and its impact on Singapore’s economy and society. Through great national effort, the number of cases has remained low and the country is also gradually opening up its borders and allowing travellers to enter. In the midst of every crisis lies great opportunity and by demonstrating resilience in the face of the pandemic, Singapore has shown itself to be an attractive jurisdiction for both individuals and corporates. Our teams here in Singapore have assisted more than 300 families from all around the world with the set-up of tax efficient structures, with a major increase in 2020 despite the circumstances.
the effective functioning – of wealth taxes and shows how taxation can serve as both a push and a pull factor. Public policy is a behaviour-influencing tool. Sometimes the influences are specific, direct and targeted; other times the influence and impact may be unintended or unforeseen. Regardless of the policy motivation, wealthy individuals are able
NAVIGATING PUBLIC POLICY AND POLITICAL UNREST From a wealth preservation perspective, how is tax policy changing wealth owner priorities when it comes to protecting capital and assets? Our research reveals expectations – but also scepticism around
WORLD OF PRIVATE CLIENTS | NOVEMBER 2020 13
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