Walkers Launches Compliance Services Offering

Walkers Compliance complements Walkers' legal, corporate and fiduciary services to deliver a one-stop-shop for clients looking to use the Cayman Islands jurisdiction for their business needs.

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Brexit

Following the result in the United Kingdom's EU referendum, Walkers has created a Brexit page dedicated to providing our clients relevant information about the jurisdictions in which we practise.

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Walkers is a leading international law firm. We advise on the laws of Bermuda, the British Virgin Islands, the Cayman Islands, Guernsey, Ireland and Jersey.
GlobalMap Oct2019
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Walkers Announces 2019 Promotions

Walkers is pleased to announce that 18 attorneys across its global offices have been invited to join the partnership. In addition, 13 associates have been promoted to senior counsel.

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Bermuda | New Collateralised Insurer Class to Add ILS Fund Diversification

The introduction of a new class of insurer in Bermuda, “Collateralised Insurers”, is expected to be beneficial to both insurance-linked securities (ILS) funds’ and their investors, according to Sarah Demerling, Partner at law firm Walkers.

Proposed earlier this year via a consultation paper from the Bermuda Monetary Authority (BMA), the provision for the supervision and regulation of the new Collateralised Insurers class came into effect on August 5th, 2019 as part of the Amendment Act 2019, which came into operation and which amends the Insurance Act 1978.

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Growth in Value and Number of Funds Underlines Guernsey Appeal

Guernsey's funds industry continues to thrive with growth in funds under management and administration of £16 billion from April to June to stand at just under £300 billion.

Figures released by the Guernsey Financial Services Commission show a 5.5% rise in the net asset value of total funds under management and administration in Q2 – a rise that Walkers' Funds partners Kate Storey and Matt Sanders say is backed up by a steady stream of client work.

Kate – a Guernsey Advocate who joined Walkers from the partnership of another Island firm 12 months ago – said that the firm was continuing to recruit to meet significant growth in demand.

Kate said: "It's interesting to see rises in the NAV of both open-ended and closed-ended schemes of 11.2% and 3.5% respectively – that's down in no small measure to the versatility of the Guernsey model, and the fact that so many professionals in the industry understand it, and have used it for many years."

"It's also down to the willingness of the regulator to innovate – and the Guernsey Green Fund is a good example of that – and to the quality of the funds professionals in the Island, who are looking after more than 800 schemes with a combined value of just under £300 billion."

Matt Sanders added that the growth in the number of funds also demonstrated confidence in the Guernsey model.

"The fact that figures show a small increase in the number of funds is very positive, as it shows that the funds reaching their natural end are being replaced and that fund managers are choosing Guernsey ahead of competitors," he said.

"It's interesting that the last 12 months have seen a 7.5% rise in the number of registered, as opposed to authorised, funds – given the trends that we have seen in client inquiries and demand, we think that could reflect the popularity of the Guernsey Private Investment Fund model."

This year has already seen the arrival of Guernsey-born senior counsel Zoe Hallam from the firm's Cayman office as well as the arrival of Adam Pickering from an in-house role as Director & Compliance Manager of a local trust company and associate Mark Finlayson, from another Guernsey firm.

Getting the Deal Through | Dispute Resolution | Bermuda

Bermuda partner Nicole Tovey and senior associate Kai Musson have provided their jurisdictional knowledge on dispute resolution to Getting the Deal Through.

Bermuda’s civil court structure comprises the Magistrates’ Court of Bermuda (Magistrates’ Court), the Supreme Court of Bermuda (Supreme Court) and the Court of Appeal for Bermuda (Court of Appeal), with a final appeal to the Judicial Committee of the Privy Council (JCPC).

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Reproduced with permission from Law Business Research Ltd. This article was first published in July 2019.

Asset Protection - Why Jersey Trusts And Foundations Appeal To Middle Eastern Clients

Robert Dobbyn is a partner specialising in private capital and trusts work in Walkers' Jersey team. He is a Jersey Advocate who has been practising offshore since 2011, and who worked for a leading firm in London before that. Robert specialises in advice and drafting in relation to Jersey trusts and foundations, and advises international clients including trustees, onshore law firms, accountancy practices, settlors and beneficiaries.
 
In this Q&A, Robert discusses the popularity of Jersey trusts and foundations to clients in the Middle East.

Trusts are enduringly popular with Middle Eastern clients – what are they used for?

Our Middle Eastern clients have traditionally used trust and indeed foundation structures for several reasons and this looks set to continue in future.

As a starting point, the ability to provide for an orderly transfer of wealth to future generations is extremely useful. Sharia law is fairly rigid in terms of inheritance rights and this can impact on what proportion of assets can be left to male and female heirs and spouses. In any event, it often makes sense to think about a gradual transfer of wealth, which may start to take place before the head of the family dies and may continue on past their death, so that younger family members in particular do not receive too much too soon.

For domestic assets, such as real estate or operating companies, local laws often do not allow much structuring flexibility and we are generally not involved with this side of things. But with international assets, such as investment portfolios with Swiss or Singapore banks or real estate in Europe and the US, the senior family members are often more able to transfer these into an offshore structure that is designed to carry out succession planning objectives.

Another, perhaps more topical, reason for using offshore structures is the ability to protect family assets from hostile third parties. This second feature is especially prominent for clients based in jurisdictions that are experiencing political and social upheaval. Families can take comfort from knowing that their assets are located in a safe, well-regulated jurisdiction, and that the assets will continue to be readily accessible even if the family members relocate elsewhere. If that happens, there is no need to open up new bank accounts, transfer title to shares or establish new holding companies.

It is worth noting that such structures are not there to allow people to defraud genuine creditors who have claims at the time the structure is established. However, if a settlor is in good financial health and has no immediate creditor issues, then offshore trusts or foundations can be a robust future-proofing tool.

Other reasons for establishing a trust or foundation include the ability to preserve confidentiality against the public at large (therefore helping to mitigate the risk of extortion, harassment or the invasion of family privacy), and the scope, with appropriate advice of course, to reduce tax where the family members are considering a move to a jurisdiction such as the US or the UK. It is often well worth establishing an offshore structure before a family member becomes resident or domiciled in those jurisdictions.

What about PTCs?

Many of our clients like the sound of a trust or foundation for the reasons I have just mentioned, but they are understandably cautious about placing family assets into the hands of an unknown party. Fortunately, there are a number of ways of dealing with this, and private trust companies, also known as "PTCs", are a really good one.

PTC structuring for Middle Eastern clients has been really popular for a while now. While I could go on for quite a while about PTCs (indeed I have just finished writing a chapter on Jersey PTCs for a forthcoming book), in a nutshell, a PTC is a company that is incorporated solely for the purposes of acting as trustee of a trust or trusts set up for a particular family, and the relevant family members will usually sit on its board. In terms of involving the family, this is a real plus when compared to the traditional model of using a third party corporate services provider as your trustee, where having a family member as a director is generally not possible. Being able to say to wealthy individuals who have built up their business and understand how it works better than anyone, that they will continue to be involved in decisions and have oversight, is a message that really works for them. The jurisdictions that we cover do this very well.

What about the perception and popularity of offshore solutions generally for Middle Eastern clients?

A lot of our work involves acting in conjunction with tax advisers and lawyers, and they often turn to offshore lawyers when advising internationally mobile families. Clients in the GCC and elsewhere will frequently have connections with the US, but also the UK and other jurisdictions, and if they are moving, they will want to plan carefully before they acquire new tax residencies. So we often get involved before they move to the US or the UK in order to help minimise the tax they might have to pay in future years.

The jurisdictions that we advise on offer tax neutrality and a range of broader structuring options including foundations, LLCs, companies limited by shares and by guarantee, and various types of partnerships, which are often used in a funds and investments context. We see a lot of inward investment into the UK and US from our Middle Eastern and other clients and a well-regulated offshore centre can be a key staging post for that capital flow.

The changes in the offshore world over the last decade or so in respect of transparency – and I am thinking particularly about registers of beneficial ownership, FATCA and CRS – have added to the administration requirements, but have not really fundamentally changed the attractiveness of the offshore option for our Middle Eastern clients when it comes to trusts. This is partly because details about trusts and their beneficiaries are not available to the public at large (as opposed to legitimate tax or other governmental authorities), and also because, in any case, the PTC structure in particular is really geared more towards combining orderly succession and asset protection with continuing involvement by the family members.

Prospects for the future – where is demand heading?

I mentioned political and social volatility earlier, and the effect this has on the uptake of PTC and other offshore structures. This looks set to remain relevant.

Also, more and more when we talk to our contacts in the Middle East, the subject turns to private capital, and how best to structure and service family offices generally. Private capital as a source of investment is growing significantly, and new methods are being sought to protect it and to put it to use. That growth has led to the growing trend in the creation of family offices focused on the assets and sometimes the philanthropic activities and administration of a specific family, who are increasingly based across multiple jurisdictions.

These family offices all do very different jobs for very different families, but what they have in common is that they need a structure that allows settlors and other family members to play a more active role in the management of trust assets. PTCs play a useful part in this.

Any final comments on what Walkers can offer in particular?

While my practice is exclusively Jersey based, we have a very good cross-jurisdictional team in our offices around the world that also covers the laws of Bermuda, the BVI, the Cayman Islands, Guernsey and Ireland. We are therefore able to advise on all the premium offshore trusts jurisdictions and have a lot of experience with helping our clients find the structure that works best for them. We are also working increasingly with our colleagues who specialise in funds, private equity and the other ways in which private capital is deployed, which our clients find very useful.

Another point to mention is that we have an excellent Dubai office and many of our Middle Eastern clients find it helpful to deal with them, particularly on their Cayman and BVI corporate matters. We travel out to the region regularly and will often see clients and contacts together with our Dubai-based colleagues.

Finally, we are also very well connected with offshore corporate service providers and onshore legal and tax advisers around the world, and we are always happy to assist with matching up clients with appropriate professionals as required.

Walkers Named #1 Global CLO Market offshore service provider in Creditflux's CLO Census

Walkers is delighted to announce that we have been ranked for a second year running as number one for 'Best Offshore Fund Administration Services' and 'Best Offshore Legal Services' in Creditflux's third annual CLO Census for services provided to the global collateralized loan obligation (CLO) market.

Head of Walkers Fiduciary, Steven Manning comments, "We are delighted to be recognised by our clients in this manner. We have an earnest commitment to helping our clients consistently achieve both their legal and operational objectives."

Creditflux's CLO Census surveyed global CLO market participants, including, arrangers, investors, managers and service providers on a series of questions designed to gauge the current sentiment of the market, investigate views on controversial topics and highlight the industry’s preferred service providers.

Walkers Partner, Garry Ferguson commented, "Walkers is delighted to receive this award for the second year running in recognition of our market leading and fully-integrated legal, taxation, corporate and listings services. We pride ourselves on providing our clients with a high quality of service that is incisive, responsive and dependable and we are grateful to have been recognised by our clients in Creditflux's CLO Census as the top CLO service provider."

 

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