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Understanding which doors should be left unopened - Multi-Jurisdictional Planning

With the world becoming smaller, more and more families find themselves in a place, some without even realising it, where more advanced Multi-Jurisdictional Planning and structuring is needed.

In today's world, it is common to have a business involved with cross border transactions, and it is imperative that these businesses and stakeholders understand their global exposure and create a plan that maximises the benefit of this globally, while reducing costs, confusion, and stress.

Understanding international laws is no longer only a concern for multi-national companies. Readily available second residency schemes, and the ease with which people can live, invest and do business outside of their home countries, has escalated the importance of understanding the impact of various laws on the business and their own asset protection, tax and estate planning strategies and vehicles.

Multi-Jurisdictional Planning is an area of planning endemic with potential pitfalls for the unwary and ill-prepared, with a complex labyrinth of rules, entirely out of proportion to the frequency in which most traditional estate planning practitioners confront them. This makes it a highly specialised area of practice, with little to no room for errors, as mistakes are very costly or impossible to correct.

Multi-Jurisdictional Planning is called for when there are:

  • Business is conducted across borders

  • Foreign-located assets.

  • Scattered family,

  • The possibility of foreign-located deceased, and

  • Foreign-located beneficiaries.

With the multitude of changes to international or multi-jurisdictional laws and regulations, most professional firms such as financial services, attorneys, accountants, and auditors are not as up to date or focused as they would like to be, on International Tax, International Estate Planning, International transactional banking or international asset protection rules and laws.

Compounding to this already confusing area of Planning, planners must also regularly contend with numerous, sometimes conflicting laws and regulations.

Multi-Jurisdictional structuring normally encompasses three pillars (four if exchange controls are applicable) to ensure an effective structure and transactions:

  1. International Tax Planning, understanding when, where and how the structure can be taxed globally as well as the concerns due to double or multiple taxations of a single transaction

  2. International Estate Planning, understanding the impact on the structure should one of the stakeholders pass away. 

  3. Asset Protection planning, realising what impact each stakeholder's personal current and future creditors can have on such structure or business.

If Applicable, a four-pillar: 

4. Exchange Change Control, understanding the regulations applicable and identify possible contravention of such, adapting transactions and structures not to be in contravention of Excon, as this is a criminal offence.

The need for proper analysis of the existing conditions prior to the design and implementation of the desired strategy has resulted in our MJRA (Multi-Jurisdictional Risk Analysis), a process that allows us to:

  • Review your entire structure, inclusive of establishment deeds, structural compliance, and corporate governance,

  • Identify any possible legislative and regulative risks, as well as

  • Review contracts and agreements that you are party to that impact your multi-jurisdictional strategies, for example, Shareholders', Buy and Sell, or Trade Agreements, or Letter of Wishes,

  • Development and Implementation of Multi-Jurisdictional Strategy.

For more information, feel free to contact UCHI.

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