Citizenship is a modern day safe haven investment, cannot be ignored by family offices in modern day investment portfolio. It is absolutely essential for family offices to think about diversifying citizenship options abroad to protect and safeguard family wealth.
Family offices, usually manage excess of $100m assets, play an important roles in administration and management of net wealth of multiple UHNWI family’s with a long-term strategy to grow and pass down wealth throughout generations.
The Rockefeller family first pioneered family offices in the late 19th century. Family offices started gaining popularity in the 1980s, and since 2005, as the ranks of the super-rich grew to record proportions family offices swelled proportionately.
There has been a huge surge in the number of Family Offices established to manage the affairs of wealthy families in recent years. Credit Suisse estimates that between 6,500 and 10,500 family offices exist globally to cater, the world’s most affluent UHNWI families with approx $6 trillion in assets.
Safety, Education and Wealth are the hallmarks of any affluent families. Why safety? we live in a chaotic world full of fear and uncertainties. Education is comes with you forever, cannot be taken away (unlike money). Wealth must be protected at all times from erosion.
Covid and lockdowns has taught us lessons investing in loved ones as the most important investment.
Citizenship is a powerful status can viewed as an asset as the it can be transferred across multiply family generations for life. Actually citizenship and wealth are two sides of the same coin. It is undoubtedly the best family investment and an ultimate insurance policy. The visa free benefits that comes with second passport gives you full path to safety (when you fear for your life).
A traditional family office is a business run by and for a single or multiple families. Family offices often invest in wealth planning, wealth management, estate planning, life insurance, private equity, charities and trust. These offices employ staff to manage investments, taxes, philanthropic activities, trusts, and legal matters. The family office invests the family’s money, manages all of the family’s assets, and disburses payments to family members as required.
Family office chart – The above chart shows the strategies used by family offices. The chart requires adding ‘citizenship planning’ as a new category for family offices.
Family offices typically invest less than 1% in high risk investments such as cryptocurrencies, luxury assets and other investment assets.
We generally recommend atleast 0.1% of the assets to be set aside for citizenship and residence planning abroad.
This can be invested in real estate, bank deposit, business as a recoverable investment for the purpose of citizenship.
Why diversify citizenship?
A single citizenship traps affluent families from discovering new opportunities abroad. The world is bigger than you think!
First lets look at the quick summary of diversifying your citizenship portfolio.
- Guarantees safety (it is a life insurance abroad)
- Asset protection offshore
- Second home abroad
- Wealth protection abroad
- Education for children
- New life, new beginnings
- Tax mitigation with effective planning
- Stress free living (It is important to live along with Nature to reduce anxiety, stress created by modern day activities)
Acquiring second citizenship does not require an expensive investments, if you know where to look. For those have family ties or you can spent considerable time in a country for holidays/business etc, it is possible to naturalize without spending or investing any money. Another easy route is citizenship through spouse.
For those who have no family ties or cannot naturalize, there are also number of citizenship by investment programs in Europe and Caribbean. Malta is one country that specifically fits for requirements of UHNWI families seeking a respectable EU citizenship option.
At Best Citizenships, we assist family offices with citizenship and residence planning. Our panel of experts are available to provide valuable advice through our sister brand World Citizenship Council (a non profit)