China has one of the fastest growing high and ultra-high net worth populations in the world. That new wealth brings its own challenges: How to invest it? How to protect it? How to ensure that it will last for future generations?
The solution: The Bahamas, one of the oldest offshore jurisdictions with a rich history, a stable Government, a respected legal system and one of the busiest and most well-structured financial centers in the world. It is a low/ no tax jurisdiction that has far more experience at providing asset protection and wealth management services than its 40 years as an independent country belies.
In The Bahamas, we provide numerous structuring options to protect the assets of high net worth individuals (“HNWIs”). These include corporate and trust structures (international business companies, basic trusts, special purpose trusts and more), foundations, and the newly designated Bahamas Executive Entity (“BEE”). Every structure is tailored to the client’s particular needs and the BEE is merely the latest example of this.
Enacted in 2012, the BEE is a wholly innovative concept unique to The Bahamas that is now being adapted by other offshore jurisdictions. The reason behind this flattery is that the BEE is an orphan structure that exists solely for the purpose of carrying out executive and administrative functions in private wealth structures. It is a limited liability entity whose charter prescribes the extent of any safeguards, limitations or permissions that a founder desires, allowing it to be tailored to function in accordance with the founder’s wishes. The BEE provides HNWIs with the ability to include family members, advisors and friends in the management of the wealth structure without the same heavy burden of liability and risk which exists in more traditional structures.
Separately, a particular benefit of creating an asset protection structure in The Bahamas is the protection against creditors afforded by the Fraudulent Dispositions Act, 1991 (“the Act”). The Act reduces the limitation period for a creditor to pursue assets alleged to have been transferred to a third party to two years. This is of particular benefit to HNWIs with high risk businesses and ventures as, subject to the foregoing, the onus is on the creditor to prove an active intent to defraud. Moreover, The Bahamas’ limited number of reciprocal enforcement agreements do not include China meaning that no judgment secured by a creditor in China may be enforced against assets in this jurisdiction outside the two year limitation period.
The foregoing are merely two examples of all The Bahamas offers in terms of wealth management and asset protection. There are also numerous investment structures – SMART funds, securities, captive insurance and a plethora of other investment opportunities, including high end real estate developments (such as Baha Mar and Albany) and the promotion of government approved investments which allow for the continued growth of wealth.
As The Bahamas’ oldest law firm, Callenders & Co. has more than 100 years’ experience in providing solutions. We would be pleased to help you find yours.
