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03 Jul 2014

Asset management structures for LATAM Family Offices

With the globalisation of the economy, diversification of the risks linked to investments has taken a new dimension. Numerous wealthy clients have invested in a wider range of asset classes and very often in several different jurisdictions. Keeping an overview on such internationalised assets, the diverse applicable legal and fiscal regulations and complex inheritance rules now require the help of professional and personalised assistance.

By the Law of 21 December 2012, Luxembourg has created a framework for “Family Office (FO) activities”, making it a regulated activity. To what extent is this Law giving luxembourg an edge in terms of FO service offering?

Luxembourg is the first European country that has created a regulated framework for Family Office activities including transparency and independence rules. Supervised by the CSSF, this new Professional of the Financial Sector (PFS) will have to demonstrate skills, morality and respect professional ethics in order to obtain their registration. With its political and social stability, its reputation as a financial centre, its multilingual professional  population and its strong international profile, Luxembourg is ideally placed for the establishment of a Family Office.

 

Family office activities and services in Brazil are still quite new. What are, in your view, the opportunities for Brazilian FOs to either set up shop in  Luxembourg or partner with Luxembourg-based service providers?

Having a representative of a Brazilian FO in Luxembourg or implementing a partnership with a Luxembourg FO would allow the FO to develop specific skills with respect to European assets and would provide the opportunity to have qualified persons governed by professional rules present in the relevant geographical area. The FO would also be able to extend the trust relationship with clients beyond South America’s countries.

 

What private investment structures and vehicles can be of interest for LATAM family offices and asset management firms setting shop in luxembourg?

Beyond the FO law, Luxembourg makes available various instruments allowing an efficient wealth management. We can mention the traditional SOPARFI, the Specialized Investment Funds (regulated), as well as the Family Wealth Management Companies (SPF) existing since 2007 and not subject to corporate tax. Professionals are also waiting for the imminent approval of the “Fondation Patrimoniale/ Private Foundation” which, according to the Bill 6595 (2013) will enjoy tax exemption on dividends, profit sharing and capital gains on the transfer of assets in favour of the Beneficiary Owner (B.O.).

 

How BSP can help you to develop fo activities in Luxembourg and Europe?

With in excess of 70 professionals, BSP is an independent full-service law firm committed to providing the highest quality legal services to domestic and international clients. With specific expertise in banking & finance, capital markets, corporate, dispute resolution, labour law, investment funds, real estate and tax, BSP would be the best partner to deal with in light of all the legal and practical queries faced by foreign and national FOs.