Henley & Partners
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Henley & Partners

The Global Movement of Billionaires

Dr. Marcel Widrig, Senior Vice President of Freemont International, and a former Partner and Global Private Wealth Leader at PwC, in Zurich, Switzerland.

In the last quarter of a century, the majority of the world’s billionaires have made their fortunes in industry’s ‘sweet spots’ of technology, finance, retail, and consumer services, yet in the last two years this has changed, with the Covid‑19 crisis accelerating that change. Rather than focusing on particular industries, the cohort of billionaires grew by entrepreneurs using technology to change a given business model, product, or service, irrespective of industry. Those making rigorous use of these new means have pulled ahead while the remainder have lagged. This was highlighted in the most recent study from 2020 conducted by UBS and PwC — called Billionaires Insights.

When it comes to the global movement of billionaires, the Covid‑19 crisis has also been a game changer. Up to 2020, mobility restrictions on billionaires were mostly discussed in terms of changes in residence and the resulting tax consequences but, for a period in 2020, it was impossible to move internationally, sometimes even domestically, for health protection purposes. This led many billionaires to reconsider their and their family’s international exposure regarding residence and travel. Not only did more detailed residence planning come to the fore, but the availability of top quality health infrastructure became more important to consider as well. In this context, there has also been a general uptick in succession and emergency planning for billionaires’ families since the start of the final quarter of 2020.

Mobility restrictions

Although unable to determine when a normalization of the Covid‑19 crisis might come, one should anticipate that it will come, and that it will be accompanied by a renewed concern with ‘traditional’ mobility restrictions. Most billionaires are first‑generation entrepreneurs and still closely connected to their businesses. This creates certain limitations on mobility, which relate less to physical presence and more to the ownership structures and dividend‑investment flows to and from their businesses.

For example, imagine that a billionaire, resident in Germany, having built up a German‑headquartered multi‑national group, would like to move to London in 2022, since his adult children live there with their families. The billionaire wants to enjoy the cultural life in the British capital, as well as finally have more time for his children and grandchildren. Yet he may find it challenging to move out of Germany due to the exit taxes that would be triggered. Based on tax legislation, he might be forced to sell part of his business to pay the exit taxes or to embark on a tax and residence plan that would eventually allow these tax consequences to be deferred, and further to mitigate dividend‑withholding tax exposures.

Billionaires do not face many legal mobility restrictions — other than the increasing number of barriers such as exit taxes and the like — especially given the budding number of residence and citizenship by investment programs working to attract wealthy individuals or families. (These individuals or families have recently been subject to more supervision by organizations such as the EU and the OECD to prevent potential loopholes in transparency provisions.) In fact, there are many destinations that offer high quality infrastructure, including an increasingly important high‑level health infrastructure as mentioned above, from which wealthy individuals can pick and choose. As a result, billionaires and their families are increasingly global, with individual family members often spread around the world. This — together with typically close ties to family businesses — results in ultra‑high‑net‑worth individuals and their families facing a threefold tax challenge.

First, family members residing in several different territories may trigger limited or unlimited tax liabilities in all or some of the respective countries in which they are domiciled. Second, billionaires are often linked to businesses that are also international and therefore also catalyze multiple tax liabilities. Third, transferring assets within the family may initiate inheritance or gift tax consequences, which are less coordinated at an international level than corporate or individual income taxes.

Current challenges

Bearing in mind the strong links billionaires often maintain with their international businesses, corporate tax planning, up to the ultimate beneficial owner, is of paramount interest. In recent years, the international corporate landscape has changed dramatically, culminating in the OECD’s Base Erosion and Profit Shifting project (sometimes known as BEPS), which aims to prevent the shift of profits to low‑ or non‑tax jurisdictions as well as the circumvention of tax rules by multi‑national companies. The project has led to several new internationally relevant tax laws coming into effect.

While publicly quoted, large, multi‑national groups have traditionally had elaborate corporate tax structures that were often the reason for these Base Erosion and Profit Shifting measures, privately held businesses have typically been leaner in their tax structures. With the new legislation, many of these businesses undertook significant corporate restructuring to ensure compliance.

Billionaires, being the ultimate beneficial owners of such businesses, often find themselves faced with a set of new holding requirements that influence their residence planning. At the same time, due to the Common Reporting Standard and the resulting exchange of financial information between different countries, care must be taken that no misreporting or double reporting occurs. This is especially true for billionaires and their families, who are tied to their businesses through various holding and financing vehicles. In other words, in the past, wealthy families could focus on profitable businesses and did not need to concern themselves much with residence planning, but now both corporate tax laws (through the Base Erosion and Profit Shifting project) and individual tax laws (triggered by the Common Reporting Standard) have led to a ‘perfect storm’ that internationally active billionaires must now weather.

The outlook

Today, the biggest challenges billionaires and their families face are more likely to be of a tax and regulatory nature and less to do with infrastructure. A growing number of tax questions at both the individual and business level are prompted by billionaires moving from one place to another, and who have adult children with business interests living in different countries, while studying or temporarily residing in yet other countries.

As a result of the Covid‑19 crisis, numbers of countries in financial need will seek to expand their restrictive tax laws, and a rising number of billionaires will be relocating from countries with limited governance. The combination — of laws designed to ‘tax the rich’ and billionaires moving — is leading to ever more ultra‑high‑net‑worth individuals moving to reliable countries that offer a reasonable tax environment. Long‑term sustainable residence planning becomes crucial in this environment as many billionaires anticipate that the pressure to tax wealthy individuals will increase, especially through newly introduced wealth or inheritance taxes.

Likely to significantly impact billionaires’ businesses in the future is a program of the G20 and the OECD, adopted in 2021. The program aims to develop a so‑called two‑pillar solution (the pillars being minimum taxation and modified allocation of profits of the biggest companies) to address the challenges posed by the digitalization of the economy. Since almost 80% of the 40 main breakthrough innovations over the past 40 years have been driven by people who are billionaires today,1 many of them hold significant stakes in such businesses and are also affected by these most recent changes.

In summary, recent regulatory and tax changes will require further sophisticated tax and legal planning for billionaires, as has been done in the past for large multi‑national corporates. This planning will not primarily aim to reduce taxes, however, but rather to comply with necessary regulatory requirements to avoid the risk of double or multiple taxation of the billionaires’ income and wealth in a global context, especially for those billionaires and their families who are moving internationally.

This essay was first published in the Global Residence Program Index 2022.

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1 Based on the UBS PwC Billionaires Insight study of 2018 ‘New visionaries and the Chinese century’, prepared by UBS Switzerland AG



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