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PwC Family Office Location Guide

Your compass for smart location selection

Overview

Selecting or reviewing the location of your family office is a complex and challenging exercise. One that can raise issues spanning reputation, regulatory frameworks, tax regimes, access to skilled professionals, political and economic stability, access to professional services, quality of infrastructure, and more.

To help you make the right decision, this guide offers practical information and guidance on the key aspects to consider when exploring possible destinations for your family office. It includes:

  • Your location assessment checklist: A comprehensive listing of the factors to consider when assessing different locations.

  • Jurisdiction profiles based on eight key attributes. The featured jurisdictions are currently the most popular family office hubs – but we’ll continue adding to the list over time.

  • Our PwC Family Office team profiles, enabling you to ‘meet’ our family office teams in each featured jurisdiction. 

Of course, this guide is no substitute for tailored and in-depth professional advice. But we believe it’s an excellent starting-point for your location selection journey, helping you ensure that your family office is built around you and your specific needs. We hope you find it both useful and comprehensive.

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Eight key factors to consider when choosing a family office location

Your location assessment checklist

Eight key factors to consider when choosing a family office location – and why they matter

Ground rules and legal regime under which family offices located within the jurisdiction must operate.

Body of rules, regulations and laws through which the jurisdiction's government collects taxes.

Availability of talent with skills and desirable attributes for the family office.

Economic and political stability are key for a family office to fulfil its role effectively.

Availability of all the professional and business services that a family office needs to function effectively.

The perception that the international community has of a given jurisdiction under a range of various criteria.

The rules that regulate how someone can live and work in a given location.

Societal norms, culture and customs, international connectivity and living standards.

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The Location Guide

Australia

Access to professional services & related infrastructures

Broad access to the well-developed and regulated professional and business services and infrastructures typically needed by a family office. A stable and robust banking system with many banks using APIs. Major international banks are also represented.

Access to talent & skilled professionals
  • A highly skilled, international and multilingual workforce in the family office space with a large pool of experienced professionals.
  • Australia has a comprehensive education and training system, with around 50 per cent of Australia’s workforce having gained some form of tertiary qualification. 
  • Australia's proximity to Asia also allows ease of mobility for senior executives from nearby countries. 
Regulatory framework / Legal structures

General

The Australian legal system is a mixture of common law and statute, similar to the legal system in the United Kingdom. The common law tradition which applies in Australia expects and values judicial independence. Courts decisions conform to due process and are made in the context of the prevailing law. 

Contractual arrangements are protected by the rule of law and the independence of the judiciary.

Family Offices

There are no specific regulatory requirements for family offices.

Australian family offices can take many forms - company, partnership, trust, or individual controlling persons. 

Regardless of structure, the family office will be subject to generic regulatory requirements in terms of Know Your Client and Anti Money Laundering regulations. Employment law regulations will also apply (in cases where staff are employed). Data and information will be regulated by the Privacy Act. Foreign investment regulation rules may apply in cases where the family office is foreign-based. Where company entities are involved, those entities will be subject to the Australian Securities and Investments Commission (ASIC) and Corporations Law regulations.

Certain philanthropic/charity entities can obtain income tax exemption status. 

Tax Regime

Individual

Tax rate: Progressive
Tax basis: World-wide assets for tax residents, No for tax non-residents
Wealth and/or inheritance taxes: No
Tax on Investments (Dividends, foreign, other): Yes
Tax on Real Estate (Capital gains etc): Yes 
Other taxes not listed above: Withholding tax on interest, unfranked dividends and royalties paid to non-residents.

Corporates

Corp Tax: 25% - 30%
Tax holidays: No
Tax benefits: Yes, tax loss carry-forward available.
Incentives for R&D, temporary Loss Carry Back, temporary full asset expensing below certain thresholds. 
Other tax benefits for corporates:  Ability to form single consolidated tax paying group. Dividends from foreign subsidiaries of Australian companies are generally exempt from Australian tax. Dividends paid by Australian companies from previously taxed profits (franked dividends) are not subject to withholding tax.

Immigration rules / Investment and golden visa availability

Short-term, long-term, skilled, sponsored, business, investment and working holiday visas available, although the criteria differ between different skilled and business visas, and the application process can take 12-24 months.

A ‘Significant Investor Stream' visa is available to people who invest at least AUD 5 million in Australian investments meeting certain requirements and maintain investment activity in Australia.

Cultural landscape, living standards and connectivity

Australia is a liberal and multicultural society, as reflected in the composition of its population who come from every culture, race, faith and nation. The official language is English. In terms of living standards, Australia ranks 4th globally.

Connectivity: with four major international airports (Sydney, Melbourne, Brisbane and Perth) it is relatively easy to reach Australia from most destinations, with more direct flights becoming available from locations such as London. 

Reputation

Australia ranked 11th in the  2020 Corruption Perception Index (CPI) published by Transparency International, with a score of 77. Australia also ranked  48th in the 2020 Financial Secrecy Index, four places down from its 2018 position. With a secrecy score of 50 out of 100, Australia is placed in the lower mid-range of the secrecy scale. It accounts for less than 1% of the global market for offshore financial services, which makes it a small player compared to other secrecy jurisdictions. 

According to the Global Forum Annual report 2020 on tax transparency and exchange of information in times of Covid-19, published by the Organisation for Economic Co-operation and Development (OECD), Australia secured an overall rating of “Compliant” in round 1 and “Largely Compliant” in round 2 in the implementation of the exchange of information on request (EOIR) standards.

Economic and Political stability

Australia ranked 22nd in the 2021 World Competitiveness Index.

Australia’s economic performance has mainly been driven by international investment and domestic demand, further supported by a strong showing in health and environment, business legislation and finance. In 2021, Australia ranked 16th in terms of government efficiency and 19th in the economic performance. With regards to infrastructure and business efficiency, the country secured 23rd and 34th positions, respectively.

Austria

Access to professional services & related infrastructures

Austria has a well-established and regulated infrastructure of professional service providers and financial institutions to best serve family offices locally and cross-border. It has a deep expertise in all relevant sectors: banking, capital markets, insurance, legal, wealth planning and management, asset management, venture capital, accounting and management consultancy. Driven by geographical proximity and historical ties, the Austrian professional services and financial sector is closely connected to the neighbouring regions in Western, Central, Eastern and South Eastern Europe.

Access to talent & skilled professionals

Austria is well known as a country of hidden champions (family-owned businesses) with a wide and rich supply of skilled and experienced workers in the family office space across operational, management, investment and concierge staff. There are highly ranked business schools such as WU Vienna and the University Krems. Vienna is also growing as a startup hub with a very talented and skilled workforce.

Regulatory framework / Legal structures
General

Austria has a clear legal framework, which makes it particularly attractive as a location for family offices. Its corporate and private foundation law is well-established and reliable. There is an opportunity for legally secure asset management and investments. Disputes can be settled before ordinary courts or arbitration tribunals.

Family Offices

In Austria, family offices can exist in various legal forms.

However, the limited liability company and the private foundation are particularly popular. In addition to charitable purposes, private foundations can also be established for private purposes.

Frequently, private foundations are established at holding companies (TopCo) or simply as family foundations. The financial market follows European regulations. Financial services and banks are regularly controlled by the Austrian Financial Market Authority as well as the respective European entities (such as the European Central Bank).

Tax Regime
Individual

Tax rate: Progressive

Tax basis: World-wide income

Wealth and/or inheritance taxes: No wealth or inheritance tax

Tax on Investments (interest, dividends, derivatives, cryptocurrency): Yes, flat tax 27.5% including exit tax, 25% from interest received from banks

Tax on Real Estate (Capital gains etc): Yes, flat tax 30% from capital gains, rent at progressive rates

Other taxes not listed above: Real estate transfer tax

Corporates

Corp Tax: 25% - will be lowered to 24% in 2023 and 23% from 2024 

Tax holidays: No

Tax benefits (losses & carry forwards, other): Tax losses carried forward, tax exemption for dividends and tax exemption for capital gains from international participations, group taxation regime

Other tax benefits for corporates: R&D tax credit

Private foundations: interim tax on interest and capital gains credited against WHT on payments to beneficiaries. Roll-over possible for capital gains from participations.

Immigration rules / Investment and golden visa availability

No residence and/or work permit is required for EU/EEA/Swiss nationals. For longer stays (over three months) in Austria EU/EEA/Swiss nationals must meet certain requirements and especially apply for a so-called registration certificate ("Anmeldebescheinigung") to certify their stay in Austria.

Third-country nationals (i.e. non-EU/EEA/Swiss nationals; since Brexit UK nationals are also considered as third-country nationals) must apply for a residence and/or work permit. Generally, the application must be submitted prior to entering the country. Combined residence and work permits may especially be acquired by highly qualified third-country nationals with a concrete job offer in Austria.

There are no benefits for foreign investors in respect to immigration rules in Austria.

Cultural landscape, living standards and connectivity

Austria is valued as a nation with a rich cultural heritage and beautiful natural landscapes. The high standard of living is reflected by excellent infrastructure, a low crime rate, a high level of social and personal security as well as attractive leisure facilities. Government spending on health and education is high.

Austria is unmatched in terms of quality of life. According to the latest ranking of global cities, the "Quality of Living Survey 2019" carried out by the Mercer Group, Austria’s capital Vienna is rated as the most livable city in the world for the 10th time in a row.

Austria is very well connected by Vienna International Airport, a leading flight hub in Central and Eastern Europe which serves numerous worldwide destinations.

Reputation

Austria ranked 15th in the 2020 Corruption Perception Index (CPI), published by the Transparency International. Austria also ranked at 36th position in the 2020 Financial Secrecy Index, based on a moderate secrecy score of 57 out of 100, and a small-scale weighting of 0.54% of the global market for offshore financial services.

Austria ranked 33rd in the Corporate Tax Haven Index 2021 with a CTHI value (Corporate Tax Haven Index value) of 303, having a score of 56 and global scale weight of 0.54%. The country is accountable for 0.68% of the world’s corporate tax abuse risks.

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19, published by the Organisation for Economic Co-operation and Development (OECD), Austria secured an overall rating of “Largely Compliant” in the implementation of the Exchange of information on request (EOIR) standards.

Economic and Political stability

Austria ranked 19th in the 2021 World Competitiveness Index.

The report points out that Austria ranked 16th out of 64 countries in digital competitiveness ranking, up by one position when compared to the 2020 edition of the same publication. Within the parameter of talent ranking, the country came 6th and with regards to investment and development, the country also came 6th, and 8th on overall appeal.

Find out more about the Austria Family Office team

Explore more territories in the location guide

Germany

Access to professional services & related infrastructures

Broad access to the well-developed and regulated professional and business services and infrastructures typically needed by a family office. A stable and robust banking system with many banks using APIs. Major international banks also represented. The country's main financial centre is Frankfurt.

Access to talent & skilled professionals

A very broad supply of highly skilled and experienced family office professionals, especially in the major cities. Germany has a lot of highly-ranked business schools such as ESCP Europe in Berlin, ESMT Berlin, the University of Mannheim and WHU.

Regulatory framework / Legal structures

General

Germany is a federal, parliamentary, representative democratic republic. It has a civil law system. Germany has a well-established non-profit foundation law, which offers investors planning security. Germany does not acknowledge trusts.

Family Offices

There are no specific regulatory requirements for family offices.

German family offices can take many forms - company, partnership or solely individuals.

Germany has an established investment regime with a financial supervisory authority that controls banks and financial services institutions. The operation of a bank or financial services institution requires a banking license. In principle, there are no special features or requirements to establish a single family office.

Tax Regime

Individual

Tax rate: Progressive
Tax basis: World-wide assets
Wealth and/or inheritance taxes: Wealth tax no, inheritance tax yes
Tax on Investments (Dividends, foreign, other): Yes
Tax on Real Estate (Capital gains etc): Yes
Other taxes not listed above: land transfer tax, property tax, exit tax

Corporates

Corp Tax: 25% - 33%
Tax holidays: No 
Tax benefits (losses & carry forwards, other): Yes - e.g. 95% participation exemption for capital gains and dividends
Other tax benefits for corporates: No

Immigration rules / Investment and golden visa availability

No visa is required for EU citizens. Also nationals from the US, Australia, Canada, Israel, Japan, New Zealand, Switzerland and Republic of Korea can apply for a residence permit for business purposes after entering the country without a visa.

Nationals of other countries must apply for a visa for work purposes prior to entering the country. Also eligible and encouraged to apply for a work visa are third-country nationals with a university degree or a non-academic professional qualification (subject to qualifying criteria) if in possession of a concrete job offer. Germany does not provide any benefits to foreign investors in respect to immigration rules.

Cultural landscape, living standards and connectivity

Germany is a liberal and multicultural society that attaches the greatest importance to people being able to develop according to their own individual and ideological views within the applicable laws. Living standards are considered among the highest ranking in the world, at 9th globally. The official language is German, and English is widely used in business. 

Connectivity: with all its major cities having international airports, Germany is extremely easy to reach from any destination globally.

Reputation

Germany ranked 9th in the 2020 Corruption Perception Index (CPI)  and 14th in the 2020 Financial Secrecy Index. It has reduced its supply of global financial secrecy by 35.0% since 2018, primarily driven by improvements in ownership registration requirements together with changes in relation to legal entity transparency as well as the integrity of tax and financial regulations.

Germany ranked 23rd in the Corporate Tax Haven Index 2021. The country is responsible for 1.4% of the world’s corporate tax abuse risks. 

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19, Germany secured an overall rating of “Largely Compliant” in the implementation of the exchange of information on request (EOIR) standards.

Economic and Political stability

Germany ranked 15th in the 2021 World Competitiveness Index, up by two positions from 2020.

A buoyant domestic economy, employment rate, strong scientific and health infrastructure, and societal framework have fueled Germany’s economic performance. In 2021, Germany ranked third in economic performance, tenth in infrastructure, and 23rd in government and business efficiency.

Hong Kong

Access to professional services & related infrastructures

Hong Kong is a highly regulated international finance centre with over 160 banks, more than 40 of which provide private banking services and use APIs.  

In recent years, increasing demand from mainland China clients for wealth management services has led to a burgeoning wealth management industry. There is also broad access to all of the other regulated professional and business services typically needed by family offices.

Access to talent & skilled professionals

Hong Kong has traditionally been an international investment hub with a very large and multicultural workforce of experienced investment and management professionals. The Guangdong-Hong Kong-Macao Greater Bay Area region is also home to one of the largest and fastest-growing fintech clusters in the world, attracting talent from mainland China and abroad.

Regulatory framework / Legal structures

General

The common law system in Hong Kong has been in place for over 150 years. Since the handover of Hong Kong back to the People's Republic of China in 1997, the common law system has been maintained in accordance with the Basic Law and the "One Country, Two Systems" principle. The legal and regulatory environment is stable. Hong Kong has been consistently ranked as one of the best jurisdictions for setting up and running a business, placed third in The World Bank's 2021 global rankings for ease of doing business.

Family Offices

A single family office will not require an SFC (Securities and Futures Commission) licence if it is structured to qualify for the intra-group carve-out or if it does not provide asset management services to a third party. Multi-family offices operating in Hong Kong will require relevant licence(s) from the Securities and Futures Commission.

Investments in Hong Kong can be managed via entities set up in Hong Kong or abroad, including private corporations, fund structures, trusts or foundations, all of which are widely used in the territory. To attract private investment funds, the Limited Partnership Fund Ordinance was introduced in August 2020, allowing for a general partner / limited partner arrangement where the limited partner has limited liability in respect of the debts and liabilities of the fund. Advising, dealing in securities and asset management are regulated activities under the Securities and Futures Ordinance.

Tax Regime

Individual

Tax rate: Progressive, max 17%
Tax basis: World-wide assets, no
Wealth tax: No
Inheritance tax: No
Tax on Investments: No
Tax on Real Estate: No, unless the individual carries on a trade of actively buying and selling properties. For properties generating rental income, the property tax rate applicable on the rental income is 15%.
Other taxes not listed above: No

Corporates

Corp Tax: 16.5% (HK-sourced profits); subject to certain conditions, two tiered rates (reduced tiered rate system) may apply
Tax holidays: No.
Tax benefits: Yes. Tax loss carry forwards
Other tax benefits for corporates: Capital gains generally not taxable; No withholding tax on dividends; No tax is charged on dividends received in general; Tax deduction of HK$10,000 for profits tax, salaries tax

Immigration rules / Investment and golden visa availability

Applications for employment visas are favorably considered if the applicant has a good educational background and has a job offer with a remuneration that is in line with market average for that specific role. Under the General Employment Policy ("GEP"), applicants with special skills, knowledge or experience that are not readily available in Hong Kong may apply for work visa. Professionals from the People's Republic of China may instead apply through the Admission Scheme for Mainland Talents and Professionals ("ASMTP") to work in Hong Kong. GEP and ASMTP are quota-free schemes and not industry specific. To attract specialised professionals, Hong Kong also has special admission schemes for entrepreneurs, research & development talent (the Technology Talent Admission Scheme) and highly skilled persons (the Quality Migrant Admission Scheme). In addition, non-locals having entered Hong Kong with a valid travel document and having ordinarily resided in Hong Kong for a continuous period of not less than 7 years may apply to become a permanent resident of Hong Kong (no visa renewal required).

Cultural landscape, living standards and connectivity

Hong Kong's culture and society are very diverse and  generally open-minded, and represent a fusion between East and West. Chinese and English are the official languages with Cantonese also very widely spoken.

Connectivity: Hong Kong's airport is one of the largest international hubs and can be reached easily from any destination in the world. 

Reputation

Hong Kong ranked 11th in the Corruption Perception Index (CPI) 2020. The country accounts for over 4.4% of the global offshore financial services market. It managed USD3.1 trillion in assets in 2018 and accounted for two-thirds of all foreign investment in China in 2019.  

Hong Kong ranked 7th in the Corporate Tax Haven Index 2021. The country is responsible for 4.1% of the world’s corporate tax abuse risks. 

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19, Hong Kong secured an overall rating of “Largely Compliant” in the implementation of the exchange of information on request (EOIR) standards. 

Economic and Political stability

Hong Kong ranked 7th in the 2021 World Competitiveness Index, down by two places from 2020.

According to this Index, robust international trade, business legislation, tax policies and skillful management practices have driven Hong Kong’s economic performance. In 2021, Hong Kong topped the list in government efficiency category, followed by 3rd position in business efficiency, 16th in infrastructure, and 30th in economic performance. 

Luxembourg

Access to professional services & related infrastructures

Broad access to the well-developed and regulated professional and business services and infrastructures typically needed by a family office. A stable and robust banking system with many banks using APIs. Major international banks are also well represented.

Access to talent & skilled professionals

A highly skilled, international and multilingual workforce. The majority of employees resident in Luxembourg are foreigners (120,845), 85% of whom are from the European Union.

Regulatory framework / Legal structures

General

The Luxembourg legal system is based on civil law.

Family offices in Luxembourg may fall under the supervision of CSSF, the Luxembourg financial regulator. In such cases, a license is granted by the Minister of Finance in response to a written application, followed by a vetting process by the CSSF.

Family Offices

In Luxembourg, family offices are mainly offering advice or “services of a patrimonial nature to individuals, families or patrimonial entities belonging to individuals or families”.

Family offices are classified as “Investment Enterprises” or “Specialised PFS” (“Professionals of the Financial Sector”) under the terms of the law of 21 December 2012.

Single family offices do not fall within the scope of the law of 21 December 2012, since it only applies to family offices with multiple branches.

In practice, some financial advisors currently work with families without family office status, via financial holding companies.

Tax Regime

Individual

Tax rate: Progressive
Tax basis: World-wide assets
Wealth taxes: No. abolished since 1 January 2006
Inheritance taxes: Yes. If the deceased's last residence was in Luxembourg at the time of death. Inheritance of immovable property located abroad is exempt
Tax on Investments (Dividends, foreign, other): Yes
Tax on Real Estate (Capital gains etc): Yes, but no taxation on capital gains in connection with the main residence.

Corporates

Corp Tax: 24.94%
Tax holidays: No
Tax benefits (losses & carry forwards, other?): loss carry-forward (max 17 years)
Other tax benefits for corporates: Participation exemption regime for dividends, capital gains and net wealth tax

Immigration rules / Investment and golden visa availability

No visa is required by EU citizens. Third-country nationals are required to apply for an authorisation to stay and work in Luxembourg. After five years of stay they can apply for long-term resident status / Luxembourg nationality

A three-year renewable residence permit for investors is also available with a minimum investment ranging from EUR 500,000 (existing business or to be created) to EUR 20M (deposit of funds) depending on the type of investment. An application for Luxembourg nationality can be submitted after five years of residence (with language requirements).

Cultural landscape, living standards and connectivity

Luxembourg has a liberal, diverse and inclusive society, with foreigners accounting for half of its population. French and German are the most used languages and English is widely spoken. Quality of life is rated as very high.

Connectivity: Luxembourg has an international airport serving many destinations. It is also close to other major international airports in Germany and France.

Reputation

Luxembourg ranked 9th in the 2020 Corruption Perception Index (CPI) and ranked 6th in the Financial Secrecy Index 2020. It was among the first countries to commit to automatic information exchange under the Common Reporting Standards. Luxembourg ranked 6th in the Corporate Tax Haven Index 2021. The country is accountable for 4.1% of the world’s corporate tax abuse risks.

According to the Global Forum Annual report 2020 on tax transparency and exchange of information in times of Covid-19, Luxembourg secured an overall rating of “Largely Compliant” in the implementation of the Exchange of information on request (EOIR) standards.

Economic and Political stability

Luxembourg ranks 12th in the 2021 World Competitiveness Index.

Luxembourg ranks 10th in terms of government efficiency in 2021, up two positions from 2020, fueled by public finance and business legislation. The country’s ranking for business efficiency climbed four positions to 13th, spurred by productivity and efficiency, and finance. It ranks 24th in terms of infrastructure, stabilized by basic infrastructure and education. It ranks 10th in economic performance, supported by international trade and employment opportunities.

The Netherlands

Access to professional services & related infrastructures

The Netherlands have a broad access to high-quality financial services providers in all the specialist areas that are relevant for single family offices, including: tax, legal, accounting, finance, consultancy, (private) banking, deals, wealth, asset and investment management, impact investing, estate planning, corporate and private philanthropy, digital, (financial) technology, cyber and data (protection), real estate, start- and scale ups, insurance, risk and compliance, NextGen education and (family) governance.

Access to talent & skilled professionals

The Netherlands is home to a diverse, highly skilled, productive, flexible and multilingual workforce. The Netherlands’ cultural amenities and relatively low cost and high standard of living make it easy to attract skilled employees. The Netherlands ranks first out of 100 countries on the EF English Proficiency Index 2020. In addition to English a higher percentage of the Dutch population than their counterparts elsewhere also speak German and French. According to the OECD Skills Outlook 2019, the Netherlands is ahead in the digital transformation of the workplace, with most of its workers intensively using technology in their job and predominantly performing non-routine tasks. It also mentions the Netherlands as being amongst the countries with the highest share of individuals with well-rounded cognitive (literacy, numeracy and problem-solving) skills. Moreover, the Netherlands has been named as one of the world’s best countries for talent competitiveness.

Regulatory framework / Legal structures
General

The Dutch legal system is based on civil law. This means that its core principles are codified into a referable system which serves the primary source of law. Therefore, the judge's (court's) main role is to establish the facts of the case and to apply the provisions of the applicable code. Applicable EU law takes precedence over national law.

Family Offices

The ground rules and legal regime under which family offices must operate as well as the regulatory framework depend on the legal form of the single family office. There are several ways to operate a single family office in the Netherlands. A distinction can be made between entities with legal personality and entities without legal personality. The latter however are usually not used for single family office purposes. The legal entities usually used for single family offices are besloten vennootschappen ('bv'; equivalent private limited company) and stichtingen (equivalent to foundations).

The main difference between the two legal entities are that a bv's equity, unlinke stichtingen, is divided into shares that are owned by shareholders. They also hold ultimate power, but the company directors run the business on a day-to-day basis. A bv may appoint a supervisory board to monitor its board of directors (two-tier board), or the supervisors may be part of the board of directors (single-tier board). A foundation on the other hand has also a board and may appoint a supervisory board, but has no shareholders (or members). Thus, from a governance perspective a bv and a stichting are quite similar, but the main difference (in this respect) is that a foundation cannot make any dividend distributions.

In certain situations, depending on the services to be provided, a single family office can be considered a collective investment vehicle and should be licensed. Current European law distinguishes two types of collective investment vehicles: undertakings for collective investment in transferable securities (UCITS) and collective investment institutions that do not qualify as UCITS (alternative investment funds or AIFs). The UCITS Directive regulates (managers of one or more) UCITS. The AIFM Directive regulates managers of one or more AIFs. In both cases the AFM is the authorising authority.

Tax Regime
Individual

In the Netherlands, worldwide income is divided into three different types of taxable income, and each income type is taxed separately under its own schedule, referred to as a 'box'. Each box has its own tax rate(s). An individual's taxable income is based on the aggregate income in these three boxes.

Box 1 refers to taxable income from work and home ownership and includes the following: (self) employment income, home ownership of a principal residence (deemed income), periodic receipts and payments, benefits relating to income provisions. Income deriving from box 1 is taxed with a progressive tax rate from 37.07% to 49.50% (2022).

Box 2 refers to taxable income from a substantial interest (i.e. shareholdings of 5% or more), for example shareholdings in a bv (private limited company). Box 2 income is taxed at a flat rate of 26.9% (2022)

Box 3 applies to taxable income from savings and (other) investment. Box 3 income is taxed at a flat rate of 31% (2022). What is exactly box 3 income is an actual topic.

The Netherlands do not levy stamp duties.

Corporate

Corp Tax: a Dutch resident company is subject to CIT on its worldwide income. However, certain income can be exempt or excluded from the tax base. Non-resident entities only have a limited tax liability with regards to income from Dutch sources. The standard CIT rate stands at 25.8 per cent as of 1 January 2022 (25.8% in 2021). There are two taxable income brackets. A lower rate of 15 per cent applies to the first income bracket. This bracket has been extended, it consists of taxable income up to 395.000 euro (245.000 euro in 2021). The standard rate applies to the excess of the taxable income

Tax holidays: No

Tax benefits: participation exemption, accelerated depreciation, carry forward NOLs, innovation box regime, interest deduction, fiscal unity regime, tax credits and incentives for investments in energy-efficient assets and environmental assets, 30% allowance (tax exemption) for employees who were hired abroad to work in the Netherlands.

Other: There are no provincial or municipal corporate income taxes in the Netherlands, only federal or state tax.

Immigration rules / Investment and golden visa availability

As an internationally oriented country, the Netherlands is home to many foreign workers and offers a ‘Highly Skilled Migrant Visa’, which allows companies to bring highly qualified expats to their Dutch operations. According to the IBM Global Location Trends 2019 report the Netherlands is the top attractor of quality Foreign Direct Investment jobs worldwide.

All foreign nationals who intend to work and stay in the Netherlands are required to comply with the immigration regulations of the Netherlands. The Netherlands has a less restrictive admittance policy for highly skilled workers of multinational companies who meet specific (salary) criteria.

Cultural landscape, living standards and connectivity

A pro-business climate, its strategic location, a stable legislative system, a highly educated multilingual workforce and superior infrastructure are just some of the advantages of setting up a Single Family Office in the Netherlands.

The Netherlands offers an affordable cost of living and an exceptional quality of life. Ranked as the 6th happiest place on earth by the World Happiness Report 2020 and ranked first in the area of children’s well-being according to a survey by UNICEF, the Netherlands has a high standard of living. Also, according to the latest OECD better life index, the Netherlands is the country with the best work-life balance. Its very low rates of youth unemployment, high literacy levels, high levels of life satisfaction in childhood and the amount and quality of leisure time of Dutch employees are factors that contribute to the country’s top position in the better life index.

In the 2020 edition of DHL’s Global Connectedness Index the Netherlands tops the list being the world’s most globally connected country. Driven by world-class seaports and airports, an extensive network of roads and rail and a telecommunications network that ranks among the world’s best for quality, speed and reliability.

Reputation

The Netherlands ranked 8th in the 2020 Corruption Perception Index (CPI), published by the Transparency International and 8th in the Financial Secrecy Index 2020.

The Netherlands ranked 4th in the Corporate Tax Haven Index 2021. The country is accountable for 5.7% of the world’s corporate tax abuse risks.

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19, published by the Organisation for Economic Co-operation and Development (OECD), Netherlands secured an overall rating of “Compliant” in round 1 and “Compliant” in round 2 in the implementation of the exchange of information on request (EOIR) standards.

Economic and Political stability

The Netherlands ranked 4th in the 2021 World Competitiveness Index. In the EMEA region, The Netherlands ranked 7th in 2021, retaining its position as of 2020.

The Netherlands ranked 7th in digital competitiveness and with regards to talent, the country ranked 9th. Innovation, digitalization, welfare benefits, and social cohesion are key to economic performance in the 2021 rankings.

Find out more about The Netherlands' Family Office Team

Explore more territories in the location guide

New Zealand

Access to professional services & related infrastructures

Broad access to developed and regulated professional and financial services typically needed by a family office.

Presence of all 'Big Four' financial firms, along with a strong legal firm contingent. The New Zealand Foreign Trust industry is well established. There are a number of significant advantages to be had through the use of a New Zealand Foreign Trust, such as reputational and fiscal benefits. In addition to New Zealand’s flexible trust law there is also the use of a Professional Trustee Company (PTC), which can give considerable comfort to the settlor by allowing them to retain a certain degree of control over the management and assets of the trust. PTCs may act as trustee of one trust or as a trustee of a number of trusts, and often engage professional advisors, such as PwC's Private Office, to assist with investment, tax and legal advice relating to the management of the trust assets. The majority of specialised talent and services in New Zealand have been focused on managing and advising international family offices, however more recently there has been a rise in popularity, wealth and complexity of the domestic Family Office, which is bolstering the need for talent on the ground in the UHNW sector.

Access to talent & skilled professionals

Sporadic availability of experienced talent with strong capabilities. Pre-2020, international immigration has helped to increase this talent pool but border closures due to the COVID-19 pandemic have made availability of talent more challenging.

Recent increase in strong family office expertise via 'returning kiwi's' that have spent a significant amount of time working abroad in global financial hubs such as London, as part of their 'Overseas Experience' (OE).

Regulatory framework / Legal structures
General

New Zealand has a robust legal framework, operating under a common law legal system similar to the UK. New Zealand is a popular jurisdiction for offshore trusts of UHNWI and families. The way trusts are administered and managed in New Zealand is considered to be superior, and New Zealand foreign trusts are perceived to be among the best in the world. Because of its good standing politically and economically, New Zealand is not black listed as a 'tax haven' country, even though it offers excellent tax advantages. This makes establishing a foreign trust a very attractive and low risk option for overseas investors.

Family Offices

PwC New Zealand is registered under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 as the firm has business units which provide investment advice to third parties and which are involved in managing client funds, but as our clients are limited to large wholesale clients as defined by the Financial Markets Conduct Act 2013 (FMC Act) the PwC Private Office (New Zealand's Multi-Family Office offering) does not need to be 'licensed'. We also need to abide by AML CFT Act (Anti-Money Laundering and Countering Financing of Terrorism Act 2009) and the Privacy Act 2020. All of the usual tax reporting obligations would also need to be adhered to. New Zealand provides a high degree of confidentiality from a client perspective. While we have a foreign trust disclosure regime, all this involves is the furnishing to the Inland Revenue Department of a form confirming the identity and address of the trustee; the name or another identifying feature of the trust (e.g. the date of the trust instrument); and confirmation that none of the settlors of the trust are Australia-resident.

Tax Regime: Individual
Individual

Tax rate: progressive

Tax basis: World-wide assets, unless eligible for the 4-year transitional residence exemption following arrival

Wealth tax: No

Inheritance tax: No

Local / regional taxes: No

Social security tax: No

Tax on Investments: Yes on distributions / no on capital gains. Deemed basis of taxation on certain foreign investments.

Tax on Real Estate: Generally no capital gains tax where assets held on capital account, though provisions exist to treat certain gains as income

Other taxes not listed above: Resident Withholding Tax (RWT) on distributions. 

Tax Regime: Corporate
Corporates

Corp Tax: 2021 28%

Tax holidays: No

Tax benefits: Yes - losses, carry forward relief, various cap ex spending incentivisation reliefs (e.g. depreciation, R&D tax credit reliefs etc), interest deduction

Other tax benefits: investors can claim credit for corporate income tax paid by a company against tax due on dividends received (imputation credit regime).

New Zealand’s tax system does not include the following: inheritance tax/estate tax; wealth tax; gift duty; stamp duty; social security tax; capital gains tax (with some limited exceptions); and local or state taxes (apart from property rates levied by some local councils and authorities).

A New Zealand foreign trust earning offshore-sourced income does not have to file a tax return in New Zealand or obtain a tax file number. 

Immigration rules / Investment and golden visa availability

As New Zealand's borders open in 2022 a new temporary visa pathway for skilled workers will become available from 4 July 2022 called the Accredited Employer Work Visa. There are likely to be several pathways to residence for skilled workers but these have yet to be confirmed. The pathways will likely depend on skill level and pay.

Two investor pathways to residence are available: The Investor 1 category resident visa requires a NZ$10m investment in an acceptable investment over a 3 year period and 44 days spent in NZ in each of the last two years of the investment period. The investor 2 category requires an investment in an acceptable investment of NZD $3m over a 4 year period and 146 days per year in NZ. Residency is granted with conditions once the funds are transferred into an acceptable investment and approved by INZ. Conditions on maintaining the investments are removed once the required period of time has been met.

Cultural landscape, living standards and connectivity

New Zealand is a liberal, modern and multicultural country. 

Set within a stunning landscape, New Zealand offers a balanced lifestyle, being a safe and friendly environment for families while offering great career opportunities and the possibilities for exploration and travel.

It ranks 14th in the 2020 Human Development Index (HDI) and 9th in the 2021 Numbeo Highest quality of life index.

Global connectivity is mostly via air, given the location in the south pacific. The domestic transport network includes 94,000 km of roads, with private cars being the predominant mode of transport. 

Reputation

In 2019, New Zealand was awarded 1st place in the World Bank's 'Ease of doing business index', driven by a robust legal framework, lack of corruption and political stability.

New Zealand ranked joint 1st in the 2021 Corruption Perception Index (CPI), holding 1st place since 2019.

It also ranked 3rd in the 2021 Index of Public Integrity, which assesses a society’s capacity to control corruption and ensure that public resources are spent without corrupt practices.

Economic and Political stability

New Zealand ranked 20th among 64 countries in the 2021 IMD World Competitiveness Index.

The Index ranked it at 11th for government efficiency, 22nd for business efficiency (up eight places from last year) and 25th for infrastructure. 

It ranked 32nd in economic performance (up eight places from last year), fueled by increased employment opportunities and a strong domestic economy. 

Find out more about the New Zealand Family Office team

Explore more territories in the location guide

Singapore

Access to professional services & related infrastructures

Broad access to a well-developed ecosystem of capabilities in the private banking and wealth management area, with a comprehensive suite of industry players including audit firms, tax advisors, law firms, fund administrators, custodians, trustees and private banks.

There are more than 190 banks and finance companies, 1,000 fund management companies, 200 insurance companies and 60 licensed trust companies in Singapore.

Access to talent & skilled professionals

Singapore offers a broad supply of highly diverse and skilled family office professionals. In 2020, Singapore ranked 1st in Asia-Pacific, and 3rd worldwide in the 2020 INSEAD Global Talent Competitiveness Index. It also has training programmes and accreditation for family office advisors to deepen their specialist skillsets to serve the family office ecosystem.

Regulatory framework / Legal structures

General

Singapore is a common law jurisdiction, and its legal and regulatory framework is clear and transparent, with a well-respected judiciary.

Family Offices

Typically in Singapore a family office structure would be comprised of at least two legal entities. One would be the family office company (often referred to as the family fund management company) and the other an investment holding company (often referred to as the family fund). The first entity will hire the investment team to manage the assets held under the investment holding company. The second entity, the investment holding company, will make the investments and derive the income and gains, and will have no employees but only a board of directors. The family office company is set up as a Singapore company, while the investment holding company can be set up as a company inside Singapore or outside Singapore. It is common to see a trust being set up to hold the investment holding company and sometimes the family office company. The investment holding company will typically apply for a tax incentive in order to achieve a zero or near-zero tax outcome on its income and gains. A single family office will seek to be exempted from holding a fund management licence under Singapore's regulatory framework: a regulatory opinion will be needed or a case-by-case exemption from licence will need to be sought from the authorities. If the family office is a multi-family office then a fund management licence will be needed. The term ‘single family office’ is not defined under the regulatory framework but is typically taken to refer to an entity that manages assets for or on behalf of only one family and is wholly owned or controlled by members of the same family.

Tax Regime

Individual

Tax rate: Progressive (maximum rate of 22%)
Tax basis: Singapore sourced income
Tax on Foreign Source Income: No
Wealth/Inheritance Taxes: No
Capital gain taxes: No
Interest/Dividends taxes: No

Corporates

Tax treaties: Yes, more than 90 territories world-wide
Corp tax rate: 17%
Tax basis: Singapore source income taxable as it arises and foreign source income taxable when received in Singapore (some exceptions may apply)
Withholding taxes: Yes on certain payments such as interest, royalties, etc. But no withholding tax on dividends paid.
Indirect taxes: Yes. GST 7% (It will increase to 9% between 2022 and 2025)

Immigration rules / Investment and golden visa availability

Foreign nationals require an Employment Pass to work in Singapore. This must be sponsored by a Singapore entity. The minimum salary is S$5,000 per month, which increases in line with the candidate’s experience.

The immigration process is transparent, and typically takes 1-2 months (possibly 2-3 months for the first application). Singapore administers a residency scheme called the Global Investor Programme (GIP). The GIP grants Singapore Permanent Resident (PR) status to eligible investors who are interested in starting a business or investing in Singapore. Applicants need to have an entrepreneurial and business track record to qualify. It is possible to include the spouse and unmarried children below the age of 21 as dependents under the applicant’s GIP application.

Investment options are (1) investing in a new business entity or in the expansion of an existing business operation, (2) investing in a qualifying fund that invests in Singapore-based companies, and (3) investing in a new or existing Singapore-based single family office with a certain level of assets under management.

Cultural landscape, living standards and connectivity

Singapore is a modern, vibrant, liberal and multicultural society resulting from the fusion of Eastern and Western cultures. One of its main values is its meritocracy, a system that ensures that everyone is encouraged to develop their fullest potential. Many Singaporeans are bilingual, with English being the most widely used language, especially in the business environment. In terms of living standards, Singapore ranks 34th globally.

Connectivity: Singapore airport is an international hub and is easy to reach from any destination globally, with direct flights from the world's largest cities.

Reputation

Singapore ranked 3rd in The Corruption Perception Index (CPI) 2020 and 5th in the 2020 Financial Secrecy Index. The country accounts for over 5.0% of the global offshore financial services market. It is an important wealth management centre and had about USD 3.5 trillion of assets under management in 2020, with the majority of which was sourced from other countries.

Singapore ranked 9th in the Corporate Tax Haven Index 2021. The country is responsible for 3.9% of the world’s corporate tax abuse risks. 

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in the times of Covid-19. Singapore secured an overall rating of “Largely Compliant” in round 1 and “Compliant” in round 2 in the implementation of the exchange of information on request (EOIR) standards.

Economic and Political stability

Singapore ranked 5th in the 2021 World Competitiveness Index, down by four positions from 2020.

According to this Index, international trade and investment have fueled Singapore’s economic performance, along with its technological infrastructure, business legislation and labor market. In 2021, Singapore ranks 1st in economic performance, 5th in government efficiency, 9th in business efficiency and 11th in infrastructure.

Switzerland

Access to professional services & related infrastructures

Broad access to the well-developed and regulated professional and business services and infrastructures typically needed by a family office. A stable and robust banking system with many banks using APIs. Major international banks also represented. The financial centres of Zurich and Geneva have a large number of
private banks.

Access to talent & skilled professionals

A very broad supply of highly skilled and experienced family office professionals across all areas of the country. Many qualify at the Swiss Federal Institute of Technology (ETH) in Zurich and top-ranked business school University of St. Gallen (HSG). There is also broad access to international talent already based in Switzerland, as well as the possibility to bring new talent into Switzerland when required.

Regulatory framework / Legal structures

General

Switzerland has a federal structure and a long tradition of direct democracy. The Swiss political and legal system offers a high level of legal certainty and is very stable. Swiss law is based on the civil law prevailing in Europe. Switzerland is not part of the EU but does belong to the Schengen area and has signed up to various EU agreements such as the Free Movement of People.

Family Offices

For a single family office, the regulatory requirements are relatively low – a single family office is not subject to licensing under FinIA (Financial Institutions Act) if the family has “family ties” that meet the requirements of FinIA. (e.g. blood relatives, spouses etc). However, a single family office does need to abide by AML (Anti- Money Laundering) regulations.

A multi-family office managing funds for multiple parties may be subject to licensing as a portfolio manager under FinIA and the regulatory requirements of FinSA (Financial Services Act). If the family office is also managing fund structures it may need a licence as
a manager of collective assets under FinIA . If the family office acts additionally as a trustee then a trustee licence is required in addition to the licenses already mentioned.

Switzerland has a large complement of foundations, and philanthropic foundations are particularly common. Philanthropic structures (e.g. foundations / associations) which are in the interest of the public welfare can benefit from a tax exemption if they meet certain conditions.

Tax Regime

Individual

Tax rate: Progressive
Tax basis: World-wide assets
Wealth and/or inheritance taxes: Yes
Tax on Investments (Dividends, foreign, other): Yes
Tax on Real Estate (Capital gains etc): Yes
Other taxes not listed above: Swiss withholding tax (may be reduced depending on terms of relevant DTT); Church tax; Stamp Taxes; Real estate transfer tax; Gift tax.

Corporates

Corp Tax: 11.9% - 21.6%
Tax holidays: Yes – available for newly set up/re-domiciled companies in specific areas
Tax benefits: Yes – participation exemption   
Other tax benefits for corporates: Patent box; R&D super deduction, special deductions for capital taxes, notional interest deduction (in Zurich).

Immigration rules / Investment and golden visa availability

Applying for a resident permit for foreign professionals from within the EU/EFTA to live and work in Switzerland is straightforward and no quotas apply. Foreign professionals from outside the EU/EFTA ("third-country nationals") can also obtain a permit to live and work in Switzerland, but in these cases the potential employer is first required to prove that there were no sufficiently qualified and competent persons available in Switzerland or the EU to fulfil the specific role. The lump sum tax regime allows HNW individuals to receive a residence permit by reason of fiscal interest, but instead of a required investment, an annual tax amount is charged.

Investment visas also available, subject to various conditions.

Cultural landscape, living standards and connectivity

Switzerland is a liberal country with a very international population. The official languages are German, French and Italian, but English is widely spoken. In terms of living standards, Switzerland ranks 2nd globally.

Connectivity: Switzerland has excellent travel connections, with four main international airports (Zurich, Geneva, Basel and Bern).

Reputation

Switzerland ranked 3rd in the 2020 Corruption Perception Index (CPI). It also reduced its ranking to the third biggest enabler of financial secrecy in the world in the Financial Secrecy Index 2020, the first time since 2011 that the country had not been ranked worst on the index. The country has also reduced its supply of global financial secrecy by 12% by increasing the number of countries with which it automatically exchanges information under the Common Reporting Standard.

Switzerland also ranked fifth in the Corporate Tax Haven Index 2021. The country is responsible for 5.11% of the world’s corporate tax abuse risks.

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19, Switzerland secured an overall rating of “Largely Compliant” in the implementation of the exchange of information on request (EOIR) standards.

Economic and Political stability

Switzerland ranked first in the 2021 World Competitiveness Index.

According to this Index, robust international trade has fueled Switzerland’s economic performance, coupled with strong scientific infrastructure and health and education. In 2020, Switzerland ranked 2nd in the government efficiency category, and secured 3rd place in infrastructure, 9th in business efficiency and 18th in economic performance.

UAE

Access to professional services & related infrastructures

Broad access to the well-developed and regulated professional and business services and infrastructures typically needed by a family office. A stable and robust banking system with many banks using APIs. Major international banks also represented.

Access to talent & skilled professionals

Dubai and Abu Dhabi, the UAE's major financial and business centres, offer a broad supply of highly diverse, international and skilled family office professionals.

Regulatory framework / Legal structures

General

The United Arab Emirates is an independent, sovereign, federal state. The core principles of law in the UAE are drawn from Sharia (Islamic canonical law based on the teachings of the Koran), however, most legislation comprises of a mix of Islamic and European civil law.

Family Offices

When establishing a family office in the UAE you must comply with the legal and other regulatory frameworks stipulated by the government and the free zones including ADGM (Abu Dhabi Global Market), DIFC (Dubai International Financial Centre) and DMCC (Dubai Multi Commodities Centre). The legal framework consists a set of rules and regulations in terms of minimum paid-up capital requirements, compliance and reporting requirements and criteria for family members. Providing asset and wealth management services is also allowed in the free zones. Recently, The Dubai World Trade Centre Authority (DWTCA) introduced new rules to encourage the establishment of single and multiple family office (SFO and MFO) within the free zone.

Tax Regime

Individual

Tax rate: No personal income tax
Tax basis: None
Wealth tax: No
Inheritance/gift tax: No
Tax on investments: No
Tax on Real Estate: No
Other taxes not listed above: No
Other tax benefits: Tax Residency Certificate benefitting under specific Double Taxation Agreement

Corporates

Free Zones: 0% tax free holidays (15 - 50 years).
Onshore: No federal CIT. Emirate level corporate tax decrees although these are not enforced.
Corporate tax on certain foreign oil corporates & branches of foreign banks: Yes

Immigration rules / Investment and golden visa availability

The UAE allows certain categories of foreigners to apply for long-term resident permits for themselves and their families, including investors and entrepreneurs who meet certain conditions (Cabinet Decision No. 56/2018 on the Regulation of Residence Permits for Investors, Entrepreneurs and Individuals with Specialised Talents). Investors and entrepreneurs need to invest between AED 2m and AED 10m and the project value for entrepreneurs should be at least AED 500,000. In 2019 the UAE commissioned a new system for long-term residence visas. Under the new system: foreigners can live, work and study in the UAE without the need of a national sponsor and with 100% ownership of their business on the UAE’s mainland. These visas are usually issued for 5 or 10 years and are renewable.

The golden visa category extends to high earners, those with specialised talents and PhDs. The categories are constantly evolving, and up to date advice should be sought to confirm eligibility.

Other non-employer sponsored categories include retirees, those who are eligible for a freelance licence, and property investors. The UAE also announced a remote working visa in October 2020, which enables individuals who are either employed with a company overseas, or a company owner, to work in the UAE remotely for up to one year. This visa is renewable.

Most of the above categories permit individuals to bring their immediate family with them to the UAE, subject to meeting certain criteria.

Cultural landscape, living standards and connectivity

Traditionally the UAE used to be a conservative and authoritarian government, however, presently it is considered to be one of the most liberal countries in the Gulf, with other cultures and beliefs generally tolerated. The official language of the UAE is Arabic, however, English is widely used in business transactions and elsewhere. The UAE have a diverse society with almost 90% of the population consisting in foreigners.

The UAE rank 24th in terms of quality of life globally (Quality of Life Index, 2021, Numbeo)

Connectivity: The UAE have 9 international airports serving all major destinations around the world.

Reputation

The UAE ranked 21st in the 2020 Corruption Perception Index (CPI), and 10th in the Financial Secrecy Index 2020 with a secrecy score of 78.

The UAE ranked 10th in the Corporate Tax Haven Index 2021. The country is accountable for 3.8% of the world’s corporate tax abuse risks.

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19, the UAE secured an overall rating of “Provisionally Largely Compliant” in Round 1 and “Largely Compliant” in Round 2 in the implementation of the Exchange of information on request (EOIR) standards.

Economic and Political stability

The UAE ranked 9th among 64 countries in the 2021 World Competitiveness Index.

The Index ranked the UAE 3rd in government efficiency, spurred by public finance and tax policies. While the country’s raking in business efficiency was down one position from last year to 8th, its labor market and its attitudes and values ranked first out of all the countries. The UAE ranked 28th in infrastructure and 9th in economic performance, down five positions from 2020.

UK

Access to professional services & related infrastructures

Broad access to the well-developed and regulated professional and financial services and infrastructures typically needed by a family office. The UK also has one of the world's most international and extremely competitive banking markets, spanning retail, investment and private banks. It has deep expertise in specialist areas across every sector of financial and professional services, including banking, capital markets, insurance, legal, wealth management, asset management, green finance, FinTech, venture capital, infrastructure financing, accounting and management consultancy.

Access to talent & skilled professionals

The UK has a wide and rich supply of skilled and experienced workers in the family office space across operational, management, investment and concierge staff. Despite Brexit, which had an impact on the lower-paid end of the job market, the UK is still considered a top-rated major location for attracting highly skilled professionals from all over the world. So, especially in London, it is still very international.

Regulatory framework / Legal structures

General

The UK has a robust legal framework, operating under a common law legal system. The strong reputation of the UK legal system means that many disputes with international elements to them are heard in the UK courts as a result.

Family Offices

Family offices don't need to be licensed but have to abide by AML (Anti-Money Laundering) and GDPR (General Data Protection) regulations. If the family office is managing funds or providing investment advice to third parties then it needs to follow the relevant regulations laid down by the UK Financial Conduct Authority for carrying on such activities.

All of the usual tax reporting obligations would also need to be adhered to, and MDR / DAC 6 (Mandatory Disclosure Regime rules) would need to be considered from a tax perspective if there are cross-border movements of assets.

Tax Regime

Individual

Tax rate: progressive
Tax basis: World-wide assets, unless able to file on the remittance basis
Wealth tax: No
Inheritance tax: Yes
Capital gains tax: Yes
Tax on Investments: Yes
Tax on Real Estate: Yes
Other taxes not listed above: Stamp duty on purchase of UK shares, Stamp Duty, Land & Council Tax on purchase/ownership of UK property

Corporates

Corp Tax: 2021 19%, rising to 25% from 1 April 2022
Tax holidays: No
Tax benefits: Yes - losses, carry forward relief, various cap ex spending incentivization reliefs (eg capital allowances, R&D tax credit reliefs etc.), interest deductions
Other tax benefits: dividend exemption for dividends received by UK corporates (not subject to corporation tax in most cases)

Immigration rules / Investment and golden visa availability

On 1 December 2020, the UK Home Office introduced a new skilled worker route for foreign workers with a job offer from a UK employer.

On 1 January 2021, EU free movement ended in the UK. As a result, newly arriving EU citizens now need permission to enter, live and work in the UK. UK employers need a sponsor licence if they want to recruit citizens from EU and non-EU countries who do not already have permission to work in the UK.

The Global Talent visa may be available where an individual does not have a job offer but is a leader or potential leader in one of the following fields: academia or research; arts and culture; and digital technology. It can last up to 5 years. Investors’ visas are also available and subject to conditions with a minimum investment of GBP2M. In most cases, it is possible to apply for permanent residence where an individual has been living in the UK with a visa for at least 5 years.

Cultural landscape, living standards and connectivity

The UK is a liberal, modern and multicultural country, welcoming and open-minded. It is also considered one of the most attractive destinations for global talent, whatever the discipline and sector - from the arts, science to finance and all that falls in between. In terms of living standards, the UK ranks 19th globally.

Connectivity is excellent by air, land and sea. With the largest air transport system in Europe, all the major cities in the UK are easy to reach from any destination.

Reputation

The UK ranked 11th in the Corruption Perception Index (CPI) 2020, down one place from 2019. In the Financial Secrecy Index 2020 the UK ranked 12th and recorded the highest rise in its secrecy score, up by 4 points to reach 46. The country also increased its global supply of financial secrecy by 26%.

The UK ranked 13th in the Corporate Tax Haven Index 2021. The country is accountable for 3.1% of the world’s corporate tax abuse risks

According to the Global Forum Annual report 2020 on tax transparency and exchange of Information in times of Covid-19* the UK secured an overall rating of “Largely Compliant” in the implementation of the Exchange of information on request (EOIR) standards.

Economic and Political stability

The UK ranked 18th among 64 countries in the 2021 World Competitiveness Index5.

The Index ranked it at 19th in government and business efficiency, and 13th in infrastructure, down one place from last year. It ranked 26th in economic performance, fueled by international investment, infrastructure and employment opportunities.

US

Access to professional services & related infrastructures

Expansive access to well-developed and regulated professional and business services and infrastructures typically required by a family office. A stable and robust banking system and access to national and global private banks. Robust client acceptance and anti-money laundering regulatory framework.

Access to talent & skilled professionals

Broad availability of highly skilled and experienced family office professionals across all regions of the country, especially in major cities. There are a number of well-established family office networks for family members and office executives to participate in. Some of the world's top business schools are based in the US and several have specific curriculums available related to Family Offices. These include Chicago Booth, Northwestern Kellogg, Harvard Business School, University of Pennsylvania Wharton and Stanford.

Regulatory framework / Legal structures

General

The law of the United States includes several levels of codified and uncodified forms of law. The U.S. Constitution is the nation’s fundamental law. Four examples of primary sources of law are at the state, local and federal levels are the Constitution, federal and state statutes, administrative regulations, and case law.-to name a few.

Family Offices

On June 22, 2011 the Commission adopted rule 202(a)(11)(G)-1 that defines ‘family offices’ to be excluded from regulation under the Investment Advisers Act of 1940.

Family offices that are excluded from Advisers Act regulation under the rule are any company that:

  • Provides investment advice about securities only to ‘family clients’, as defined by the rule;
  • Is wholly owned by “family clients” and is exclusively controlled by ‘family members’ and/or ‘family entities’, as defined by the rule; and
  • Does not hold itself out to the public as an investment adviser.

Permissible ‘family clients’:

• Family members. Family members include all lineal descendants (including by adoption, stepchildren, foster children, and, in some cases, by legal guardianship) of a common ancestor (who is no more than 10 generations removed from the youngest generation of family members), and such lineal descendants’ spouses or spousal equivalents.

• Key employees. Key employees include: executive officers, directors, trustees, general partners or persons serving in a similar capacity for the family office or its affiliated family office; any other employee of the family office or its affiliated family office who, in connection with his or her regular duties, participates in the investment activities of the family office or affiliated family office, and has been performing such duties for the family office or affiliated family office, or substantially similar functions or duties for another company, for at least twelve months.

• Other family clients. Other family clients generally include: any non-profit or charitable organization funded exclusively by family clients; any estate of a family member, former family member, key employee, or subject to certain conditions, a former key employee; Certain family client trusts; and any company wholly-owned by, and operated for the sole benefit of, family clients.

In the US, almost every family office is unique and there are various legal structures available depending on the profile and objectives of the family/wealth holder.

Tax Regime

Individual

Tax rate: Progressive
Tax basis: World-wide assets
Wealth and/or inheritance taxes: Estate tax
Tax on Investments (Dividends, foreign, other): Yes
Tax on Real Estate (Capital gains etc): Yes
Other taxes not listed above: State and Local tax, Sales and Use tax, Real estate transfer tax in certain jurisdictions; Gift tax, etc. (there are multiple areas of US tax).

Corporates

Corp Tax: Federal CIT 21%;

State CITs range from 1% to 12% (although some states impose no CIT) and are deductible expenses for federal CIT purposes;

These rates may change with the proposed tax law revisions under the Biden administration.

Tax holidays: There are special rules for certain types of companies, e.g., Real Estate Investment Trust (“REIT”), Regulated Investment Companies (“RIC”) and small businesses which may be subject to meeting the requisite conditions to qualify for tax exemptions

Tax benefits: Yes

E.g. Net operating losses ("NOL"s) generated in tax years ending after December 31, 2017 generally may not be carried back and must instead be carried forward indefinitely. However, for NOLs generated in tax years beginning after 31 December 2017, the NOL deduction is limited to 80% of taxable income (determined without regard to the deduction).

Other tax benefits for corporates: Depreciation and amortisation, Depletion, Goodwill, Start-up expenses, Interest expense limitation, Bad debt, Charitable contributions, Employee benefit plans (pension plans and expenses), Foreign-derived intangible income (FDII), R&E expenditures.

Immigration rules / Investment and golden visa availability

The United States provides for immigrant visas based on family ties, employment, adoption, special immigrant categories, and the diversity visa. An application for an employment-based immigrant visa is considered if the applicant has the right combination of skills, education, and/or work experience. Upon approval, a green card is issued to the permanent resident. Investors can obtain an EB-5 immigrant visa by investing substantial capital to finance a business in the United States that will employ a minimum of 10 American workers. There have been two notable changes to the EB-5 program in 2021. First, the investment amount is under review following a June 2021 lawsuit. As of November 2021, the United States Citizenship and Immigration Service has stated that the minimum investment amount of $1 million and the minimum investment amount of $500k in a Targeted Employment Area continues to apply. This amount may change and should be reviewed in real-time. Second, the former EB-5 Immigrant Investor Regional Center Program expired on June 30, 2021. It is currently not an option that can be used to structure an investment. Individuals interested in pursuing an EB-5 immigrant visa should consult with a US immigration attorney to understand the current requirements given the many recent changes.

Cultural landscape, living standards and connectivity

The United States is a multicultural country founded on values such as democracy, freedom, individualism, equality and achievement as well as directness and assertiveness. English is the predominant language used in business. In terms of living standards, the US ranks 15th globally .

Connectivity: With major international airports in most states, the US is easy to reach from any destination in the world.

Reputation

The US ranked 25th in the 2020 Corruption Perception Index (CPI) and second in the 2020 Financial Secrecy Index with a secrecy score of 63 out of 100. The country accounts for over 21.4% of the global offshore financial services market. It has increased its supply of financial secrecy to the globe by 15.0% since 2018, primarily due to the enactment of a new law in New Hampshire permitting the creation of non-charitable private foundations without any disclosures.

The US  ranked 25th in the Corporate Tax Haven Index 2021, with the country responsible for 1.2% of the world’s corporate tax abuse risks.

According to the Global Forum Annual Report 2020 on tax transparency and exchange of Information in times of Covid-19, the US secured an overall rating of “Largely Compliant” in the implementation of the exchange of information on request (EOIR) standards.

Economic and Political stability

The US ranked 10th in the IMD's 2021 World Competitiveness Index, the same as in 2020.

According to the IMD report, the US's resilient domestic economy and robust international investments fueled its economic performance, coupled with its strong technological and scientific infrastructure, high-quality education and high productivity and efficiency levels. In 2021, the US ranked 5th in economic performance, 6th in infrastructure, 10th in business efficiency and 28th in government efficiency.

Considerations and scenarios

Overlaid on the key factors in choosing a family office location are a number of specific considerations and scenarios that also need to be taken into account. Here are some of the most likely to arise.

1. Proximity to the assets or proximity to the family? Is it more important to have the family office located close to the majority of assets being managed, or to where the majority of the family is domiciled? This may vary from family to family,

2. How good is the location’s access to deal flow in the areas or asset classes where you want to invest? When investing in particular markets or assets, it’s good to be at the heart of the action. 

3. Do you want multiple locations/branches for your family office? We’re seeing more and more large single-location family offices branch out to set up a presence in other jurisdictions. Typical examples include starting from an original family office in Switzerland and then establishing satellite operations in Singapore and the Bahamas to better meet investment and/or personal needs.

4. What will the structure and governance of your family office look like? For example, will you want to have an investment committee or a board?

5. How will you manage compensation and performance evaluation for your family office staff in the location? What’s the benchmark in that jurisdiction for a similar position? And how do you evaluate the success of the people employed? This may depend partly on the asset classes they are managing: with real estate you are probably looking for long-term returns, while if you’re investing in cryptocurrencies or hedge funds you may have a shorter-term investment horizon. How can you ensure such priorities are aligned with the performance and risk management systems you have in place? 

6. How will you handle security? This applies to security of all types: digital, physical, data, personal. All of these are key and may be impacted by the choice of location.

7. If you have already in mind who will be running the family office, or who you wish to attract to do so, what is their preference? Where would they want to live and work – and where they would definitely not want to go?

8. Where does the family wish to live and work? Inevitably, this can be a crucial factor in the choice of location should residence in the desired jurisdiction be required.

9. Consider cultural and societal norms and if aligned with your own and family’s value set. Are there any restrictions dictated by religious rules? If you are exploring a country far afield, it is important to ensure that you will feel comfortable with its cultural and societal norms, since in many countries you will be expected to conform to avoid heavy penalties or isolation. 

10. Consider the next generation… would the selected location be acceptable to them? It is vital to take the view of the next generation into account in the decision.

11. As we live in time of radical and fast-paced change, be prepared to conduct strategic reviews of your location at regular intervals and think about agility and flexibility in terms of potentially needing to move to a different location. Locations change and evolve all the time, as does their attractiveness as a family office domicile. 

12. Consider your ability to have a positive impact to the jurisdiction in which you are planning to move to. Giving back to the local community is not only the right thing to do, but can also bring positive impacts both for the family office and the family itself. 

Our advice on how to get started mapping your ideal location

Based on our experience, here are some points of best practice to bear in mind when assessing different potential locations for your family office.

  • Ensure that you and your family/other beneficiaries are clear on what the objectives of your family office are, what are your guiding principles/value set, and what the money is for – and then ensure the family office would be able to deliver on that purpose and objectives in the chosen location.

  • Develop a clear understanding of the key areas featured in this guide. They are all important – although the balance between them may vary between different families and locations.

  • Consult with all family members/beneficiaries to uncover any reservations and understand their individual expectations.

  • Consult with any potential hires for the family office: if they’re not already residing in the location you have in mind, will they be willing to work there?

  • Talk to peers who have already chosen a specific destination and see how they feel about their decision and glean any useful advice they may have with the benefit of hindsight.

  • Think about the jurisdiction’s reputation for integrity and transparency, and how your decision to locate there might play out at home if and when it becomes public.

  • Finally, be sure to conduct rigorous due diligence on the location, and don’t take the decision lightly. Making the wrong choice can be costly!

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Contact us

Brittney Saks

Brittney Saks

Global Leader, UHNWI Private Wealth, PwC United States

Tel: +1 (773) 610 0189

Peter Englisch

Peter Englisch

Global Family Business and EMEA Entrepreneurial and Private Business Leader, Partner, PwC Germany

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