Immigrants and Expatriates are another important category of individuals using International Financial Service Centres (IFSC). Immigrants are individual who have moved from one country to another. Immigrants and Expatriates are motivated to move away from their home countries by factors such as:
Major Corporate banks have long recognised the attractions in establishing private banking operations in International Financial Service Centres (IFSC). Demand for international private banking services is driven by both the need to manage risk and desire to minimise taxation and his partially explains the distribution of where today’s private clients’ bank. Switzerland remains the dominant private banking centre, accounting for approximately a third of offshore wealth, followed by London and New York. It is noteworthy that the offshore banking centres account for a smaller proportion of these clients than the onshore centres. The relative positions of these banking centres are being influenced as:
It is important to us to forge a good relationship with each of our clients in order to have a better understanding of their needs and objectives. One aspect of this will be the investment brief which forms the basis for the service we provide and is crucial for its success.
Real property companies: Ferenc Kiss, a Hungarian high net-worth individual living in Budapest, is investing substantial amounts of his wealth in real property, both in Hungary and in other Central and Eastern European countries.
Income arising overseas: Nancy Johnson, a Canadian individual, has acquired some luxury apartments in France along the coast of the Mediterranean. It is her intention that the apartments will be rented out to third parties. In case of sale of the apartments or when Nancy dies, capital gains taxes and inheritance taxes should be avoided or reduced as much as possible.
Estate Planning: Bernard Shaw, a widower of 65, is planning to remarry with a Canadian woman and emigrate to Canada. At present, Mr. Shaw is resident in the UK. He has two children; a son living in the Bahamas, and a daughter who married a German man and has been a resident of Germany for more than 10 years. His new wife also has two children from her first marriage; a son who lives in Brazil, and a daughter living in the United States.
Divesting of personal assets: Olga Barschefsky, an individual living in Moscow, is a chemical engineer and managing director of a Russian company engaged in the manufacturing of masks protecting against biological and chemical weapons. The Russian company has received a license for the production of these masks from Olga who holds the world-wide patents on a new revolutionary invention which is used when producing the masks.
Inheritance tax planning: Pierre Dubois, a French citizen and resident, owns valuable works of art situated in several galleries and museums in the UK. The value of these works of art would certainly exceed the inheritance tax threshold for UK inheritance tax purposes, if Pierre would die in the very near future.
Pre migration planning: Mr. Abdullah, an executive working for a big oil company in Kuwait and also resident in Kuwait (0% income tax) is sent by his employer to Germany to become the CEO European operations of his company. It is expected that he will stay in Germany for a long period of time (at least 8 - 10 years) and he takes his family with him to Germany.
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