Latest news


Virtually Together Focus on Latin America: BVI an Attractive Jurisdiction for LatAm Wealth Structuring and Estate Planning
  • POST ON 14 Jun 2021

The BVI is an attractive offshore jurisdiction for wealth structuring and estate planning for the Latin American market, says Martin Litwak, CEO of Untitled. 

Mr. Litwak pointed to the BVI’s political stability, safety, rule of law, and estate planning products as the incentives to LatAm clients, during the BVI Finance virtual conference, “Virtually Together: A Focus on Latin America” on Tuesday, May 25. 

The first session, ‘Regional Trends in International Wealth Planning’, was led by Mr. Litwak, who articulated the evolution of tax on wealth. He also spoke to current tax trends which underscore the need for clients to structure their wealth “more than ever”.

In citing the Chinese proverb: The best time to plant a tree was 20 years ago, the second best time is now, the tax expert asserted, “This applies entirely to estate planning.” Mr. Litwak explained that some actions taken today may not be possible in the next 20 years, underscoring the importance of prioritising estate planning amidst global tax trends. These trends include the increasing deficits for countries such as social plans, universal basic income, increased minimum wages, growth of left-wing populism in Latin American countries, and COVID-19 stimulus packages.

Mr. Litwak’s presentation also covered the balancing act of tax transparency and privacy. He emphasised the public’s right to privacy, adding that this principle allows offshore jurisdictions to “provide an added layer of protection for those who need it”, specifically referencing Latin America.

The CEO highlighted the tax consequences of the pandemic, such as income tax increases, increase and creation of wealth taxes, and current discussions on a global corporate minimum tax. Also, in Latin America, before the pandemic, only three countries had wealth taxes: Uruguay, Argentina and Colombia. Argentina approved a second wealth tax in December 2020, and became the very first country to have two taxes on wealth. 

He also highlighted various proposed US legislation that would cause further shifts in this area, such as the increase in corporate earnings tax, along with the approval of the Corporate Transparency Act. 

Mr. Litwak, and panelist Charlotte Bailey, Global Head of Conyers Client Services, both asserted that industry stakeholders must understand and accept the current situation to better advise clients on wealth structuring options.  

Other panelists included Enrique Travieso, Managing Director, CORPAG (Miami), and moderator Michele Hibbert, Executive Director of Patton, Moreno & Asvat. 

Session two of the LatAm conference highlighted BVI’s overall attractiveness in the area of trusts and estate planning. To that end, Mr. Christopher McKenzie, O’Neal Webster Partner, and Head of Trusts and Estate Planning, credited the further enhancement of the jurisdiction’s trust legislation. 

In addition to the BVI’s status as a UK overseas territory, Mr. McKenzie cited other advantages include the BVI’s democratic stable government, world class trust industry, tax transparency, excellent court system and state of the art trust legislation. 

Mr. McKenzie explained BVI trusts are a flexible way to hold assets, and are used for probate avoidance in estate planning, preserving family wealth, protecting vulnerable relatives, asset protection, and confidentiality. 

The VISTA trust, specifically, has the ability to run businesses and own shares. Mr. McKenzie explained that this type of trust removes the trustee from management responsibility and said it is popular with settlors who like to retain control, and those who are risk averse.

The trust expert’s presentation provided an overview of the recent changes to the BVI’s trust legislation, which include strengthening the existing firewall provisions, and updates to rules and procedures on the Variation of Trusts, Reserved powers, and Resealing.

On variation of trust, Mr. McKenzie said it enables the court to vary a trust without beneficiary consent, which is useful when a beneficiary’s consent would involve adverse tax consequences. Reserved powers enable powers to be reserved to settlors, while Resealing simplifies the procedure for obtaining a grant of probate in specified jurisdictions like the UK, Hong Kong, US, India, Singapore and other Commonwealth countries. 

The changes are set out in the Trustee (Amendment) Act 2021; the Virgin Islands Special Trusts (Amendment) Act 2021; the Probate (Resealing) Act 2021; the Administration of Small Estates (Amendment) Act 2021 and the Property (Miscellaneous Provisions) Act 2021.

Mr. McKenzie was joined by panel moderator Cristiane de Matos, Senior Manager, Wealth Structures, ATU; David Pytches, Partner in Walker’s Global; and Claudia Waisbich, Business and Marketing Coordinator, Trident Trust. 

To watch the conference, go to https://youtu.be/NxlKDBzqq1g