The Cayman Islands has long been known and trusted by Chinese nationals as a jurisdiction to establish corporate and fund vehicles for outbound business investments from China or Hong Kong. In recent years, though, the Chinese have also turned to Cayman for wealth structuring and family succession planning, and Cayman Islands trusts, foundations and companies are often part of ultra-high-net-worth (UHNW) families' personal planning.
Many Chinese families do not only operate within national borders and boundaries. Whether it is family members moving to the US, Canada, Dubai or Europe, they are often not geographically tied to their region of origin and need to ensure that all aspects of their wealth planning take their families' increased global footprint into account. International families are looking at the broad spectrum of possibilities for wealth planning and structuring, and the Cayman Islands are increasingly becoming a jurisdiction of choice.
Monique Bhullar, a partner with Walkers law firm, which has offices in Cayman and Hong Kong explains: "As a law firm, we have seen a significant increase in the number of ultra-high-net-worth individuals and family offices either relocating or preparing a contingency plan for relocating to Cayman. This is without actively seeking this type of work, so is clearly illustrative of a global trend.
"An uptick in high-net-worth migration from a region is often a signal of negative economic, political or societal factors influencing a region. Where clients are considering contingency planning based on such factors, they are often looking further afield to jurisdictions physically distant from their home jurisdiction or region, and often also economically or politically different, in order to mitigate risk. This applies to immigration planning as well as asset protection and estate planning and makes Cayman an attractive option for residents of Mainland China and Hong Kong."
Contingency or 'Plan B' residency is something that is being considered by many wealthy, global Chinese families who are concerned about political, economic or other societal issues their home country. The recent protests in Hong Kong and the outbreak of COVID-19 have brought these issues into sharp focus.
Bhullar adds: "Where we have assisted ultra-high-net-worth individuals from China and the surrounding region to relocate to Cayman, the driving factors in those clients selecting Cayman have been (i) infrastructure – the quality and diversity of service providers in Cayman are second to none and the level of connectivity is that of any larger country, (ii) safety – Cayman is considered one of the safest countries in the region, which is a paramount issue for UHNW clients, (iii) rule of law – Cayman has a reliable and well-tested legal and judicial system, (iv) anonymity – UHNW individuals are able to maintain an unusually high degree of anonymity in Cayman, compared to other countries, and (iv) lifestyle – Cayman offers luxury real estate and facilities for other significant assets which UHNW clients are likely to be accustomed to and require in their new or contingency jurisdiction."
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