The Bahamas' financial services sector should look to reserved powers and purpose trusts as a solution to keep Latin America engaged with this jurisdiction, international wealth structuring specialist Don Stubbs explained yesterday while speaking at the Nassau Conference 2023, according to a statement released on his presentation.
Stubbs, who is the director and group lead for Scotiabank's International Wealth Structuring & Global Family Office Group in Miami, explained that family wealth management needs and structures have increased in complexity over the last three decades, "as new regulations and transparency rules have come into effect, as well as the requirement to include diverse asset classes in multiple jurisdictions".
Stubbs said during his presentation at the Nassau Conference that the new common reporting standards (CRS) and Foreign Account Tax Compliance Act (FATCA) rules that now cover digital assets and cryptocurrencies, and new tax burdens and reporting requirements have spurred the evolution of products in The Bahamas into state-of-the-art planning structures that are ideal for ultra-high-net-worth clients from Latin American countries and other nations.
Stubbs said the complexity associated with these new rules and requirements have caused many Latin Americans to turn to the USA as the preferred jurisdiction for trust and estate planning. He said Bahamas reserved powers and purpose trusts (BPT), private trust companies (PTCs) and other bespoke solutions available in The Bahamas can be an ideal alternative solution.
"He explained that a BPT is a trust that can be set up for a particular purpose. This greatly simplifies the process, as there is no requirement that beneficiaries are named, and a trust instrument can be declared for the purpose of holding, or investing in shares in a company, or any other assets constituting the trust property," the statement said.
"These instruments can be used for the benefit of philanthropic, commercial, or investment purposes, and institutions named or not named."
Stubbs insisted that local firms have to create and maintain the expertise needed to serve family enterprise groups and family office structures, which he said are in high demand from wealthy clients.
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