Latin America - Meeting the Challengers of a Complex Marketplace

John Blewett, based in Miami, is Director of Business Development and heads the Fiduciary Group for Latin America. John has over 30 years of experience in international estate and wealth planning for private clients. The team also includes Maureen Freedman and Nydia Deyne in New York, and James Hanglow in the Cayman Islands. Each team member has an average of more than 15 years of experience in the fiduciary services industry with diverse international memberships in recognised industry organisations.

New Tax Regimes

In recent years, there have been many changes in tax laws in several Latin American countries as Latin America moves from a system of territorial taxation to one where residents are taxed on their worldwide assets.

Several countries, including Mexico, Venezuela, and Argentina, have introduced "blacklists" of low tax jurisdictions, which includes most offshore finance centres. Hence, assets held within a company, trust or other structure located or managed from a blacklisted jurisdiction will still be subject to tax on an accrual basis and the fiduciary structure may be of no effect in providing asset protection and confidentiality.

Many countries are making it a criminal offence not to disclose such assets, and other Latin American countries, including Chile and Peru, are likely to introduce similar legislation in the near future. Brazil already has a black list that operates in a different way to these countries.

Personal security concerns have increased as a result of violent crime and the fraudulent acquisition of financial information to target specific individuals. For Latin American clients one must always remember that confidentiality is a key consideration.

Importance of Wealth Planning Expertise

In addition to these concerns, there are also several other complications that increase the demand for wealth planning expertise, such as worsening economic conditions locally, clients deciding to emigrate, or heirs living in high tax countries in North America or Europe. Clearly, the responsible use of various fiduciary structures to protect clients' confidentiality, reduce taxation, and generally preserve family assets is essential in these changing political and legally complex environments.

The Fiduciary Group in Latin America keeps up-to-date with all relevant issues for their region and prepares proposals, often in conjunction with the client's own advisers, on a number of solutions to optimise the protection of international financial assets. They also work closely with other areas of the Deutsche Bank Group in structuring domestic assets, usually in anticipation of a liquidity event.

The Fiduciary Group travels regularly to meet with private banking clients and prospects. Their objective in these meetings is to provide assistance to relationship managers in educating and informing clients of the changes in their specific marketplace, and thereafter, to outline and implement the solutions to their wealth planning needs.