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07 November 2019
Wealth is increasing exponentially among some of the world's richest families to the extent that, for many of these families, it makes commercial sense to set up their own bespoke family office to look after their key operations – and they are increasingly looking to Jersey as the place to do it.
At its most simple, a family office manages investments for one or more wealthy families. The other services typically provided include management of tax and legal matters, property management, accounting and payroll activities. In addition, some family offices provide softer concierge services connected with travel and managing household staff. Family offices also increasingly provide family management services to include:
Why is Jersey becoming a jurisdiction of choice for families across the world looking to set up such an operation? There are a range of factors, but a key one is global economic shifts, with private wealth increasing exponentially in East Asia and families in the Middle East looking to structure their assets in difficult times.
Alongside its political stability, Jersey also has the expertise and personnel to manage family offices well:
[Jersey is] particularly attractive because of the high quality of professional services available in the investment, accounting and legal sectors. A family office is only as good as those running it and the right mix is crucial - both in terms of providing for the key professional services needed by a family office (e.g. accounting, legal and investment services) and the softer skills required for diffusing difficult family issues and ensuring individual family members buy in to the family's vision for the future.
It is also likely that new economic substance provisions will influence where ultra-high-net-worth individuals locate their family office – Jersey is on the front foot here, affirmed by the European Union as a cooperative jurisdiction in terms of good tax practice and transparency. In addition, the desire among high-net-worth families to establish meaningful charitable legacies and structures, which the law in Jersey easily accommodates, makes it clear why it is becoming an increasingly popular location to establish family offices.
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