A jurisdiction of choice for Canadian HNWIs

Introduction
Unique wealth management vehicles
Quality financial institutions
Finding the right lifestyle fit
Comment

Introduction

Canada is a thriving market for Cayman private wealth services, with the Cayman Islands' full package of wealth structuring and lifestyle factors attracting growing numbers of high-value residents from the north.

With direct flights from Toronto, the Cayman Islands are historically known to be a first-class destination for Canadian high-net-worth individuals (HNWIs), who have some familiarity with the Cayman Islands as a British overseas territory and fellow member of the British Commonwealth.

The COVID-19 pandemic has also led many to fundamentally rethink how and where they want to live, with a better work-life balance and a healthier lifestyle topping people's list of priorities. The Cayman Islands has proved itself to be a safe haven amid the crisis, virtually eliminating cases by strict border control and enabling life to return to normal after lockdown – a stark contrast to many other places. The global shift in work patterns spurred by the pandemic has also seen the Cayman Islands launch a Global Citizen Concierge Programme (also known as the 'Digital Nomad Visa'), enabling eligible people to stay in the Cayman Islands for up to two years, adding more flexibility for those considering relocation.

Unique wealth management vehicles

The Cayman Islands' range of wealth structuring options is a big draw for HNWIs, who have increasingly complex wealth structuring needs which require flexible and customised solutions. Alongside regular trusts, the Cayman Islands has a number of unique wealth management vehicles, including the STAR trust (named after the Special Trusts (Alternative Regime) Law 1997, which brought it into effect) and the relatively new foundation company.

The main difference between an ordinary trust and a STAR trust is that a STAR trust can exist for non-charitable purposes – for example, to own and operate a particular business. They are incredibly flexible wealth planning vehicles that can be used in a variety of ways.

A 'foundation' can be described as a company with beneficiaries – a hybrid between a trust and a company. To date, foundation companies have provided significant flexibility for clients looking to have greater control over their structures and not wanting to be beholden to a trustee.

Quality financial institutions

Some of the world's leading financial institutions, including the Canadian Imperial Bank of Commerce, the Royal Bank of Canada and Scotiabank, have operations in the Cayman Islands, along with accounting firms such as KPMG, PricewaterhouseCoopers, Deloitte and Ernst & Young. Market-leading offshore law firms and investment advisory firms are also headquartered in the Cayman Islands, making it a natural choice for ultra-high-net-worth families looking for a jurisdiction with a thriving financial services industry of high-calibre private client and trust professionals.

Finding the right lifestyle fit

In addition to beautiful beaches and lovely weather throughout winter, the Cayman Islands has a high standard of living, good healthcare and education and a strong sense of community, while also respecting people's privacy.

In addition, the Cayman Islands has a strong infrastructure to support family offices and professionals to assist clients in the wealth management industry, which is likely why it is consistently ranked as one of the top offshore financial centres in the world.

Comment

If they are not looking to move offshore, there may still be good succession planning reasons why a HNWI may wish to set up a trust or foundation company in the Cayman Islands.

If the HNWI is still onshore in Canada, for example, it is critical that their Cayman and Canadian counsel work closely to ensure that they are structuring the trust or foundation company in the best possible way for the client's needs.

For further information on this topic please contact Anthony Partridge at Ogier by telephone (+1 345 949 9876) or email (anthony.partridge@ogier.com). The Ogier website can be accessed at www.ogier.com.