We live in interesting times!

27 February 2024

Written by Lee Penrose, Head of Business Development, The Fortress Group

Politically half of the world’s GDP heads into an election year in 2024 with the geo economic landscape being affected in the twelve countries and in particular the UK, US, South Africa, India, Venezuela and most recently Taiwan. 

With world events such as the war in Ukraine, unrest in the Middle East and tensions in Southeast Asia political changes matter, affecting economies, the world order (peace) influencing the day to day lives of everyone on this planet.

Wealthy international families and successful businesses look for stability, experience, reliability, continuity, efficiency, acceptability, trustworthiness, and quality when choosing jurisdictions to relocate to, or to operate from, and when making decisions on how and where to hold assets and investments across generations.

The choice of sophisticated international finance centres and international providers is now wider than ever before with up-and-coming areas such as the Dubai International Finance Centre, Abu Dhabi Global markets and other special economic zone being set up to attract investment and business.

Whilst specific family and business requirements shape the choice of jurisdiction for most clients, geo-politics is always a factor.

For instance, an international family originating in Southeast Asia might usually set up structures in Hong Kong or Singapore. But current tensions with China might now make Hong Kong less attractive to families that would traditionally use that jurisdiction, whereas Singapore is currently going through some major industry issues and is now possibly less accessible for international clients.

Where else might a wealthy family set up say a family office? The DIFC and ADGM are attractive options but with recent tensions in the Middle East  those with UAE structures may well be considering holding assets and businesses outside of the region just in case.

Switzerland and the Channel Islands have always been considered stable jurisdictions to base private client structures. However, clients don’t always realise that many Swiss structures are often “back officed” in the Isle of Man due to cost of employing staff and operating in Switzerland. Family offices of any scale that need to employ staff for say trading operations could be too expensive to administer wholly in that jurisdiction. The situation is similar in the Channel Islands where physical limitations of space and population may make the jurisdictions less suitable where real economic substance is a key factor. It is for this reason that large employers such E-gaming firms, shipping, aviation, banking, and insurance choose the Isle of Man.

Operating a structure in jurisdiction where an office would be closed for much of the working day in your time zone is not practical. So, for international families with connections to the UK, Europe, or African time zone the Isle of Man is the right choice and is easily accessible with various UK connections. More than this if the client, their family members, or staff need to be physically based and employed providing real economic substance on the Island there are no restrictions on mobility or property ownership and investment other than meeting the usual requirements to work in the UK. The Isle of Man Government is proactive in this area with initiatives like Locate.im to actively assist in clients and business relocations.

Some might even say, that rather than interesting times, we live in unusually chaotic times; but out of chaos comes change and this is an opportunity for the Isle of Man. Whilst we offer exactly the same forms of structure and service available in all high quality competing jurisdictions, we can also provide the stability, accessibility and quality of service valued by international clients in these difficult times.