There are only a handful of places where wealthy families can establish a wealth management structure that will allow them to grow wealth in a tax-optimized environment while protecting their assets for future generations.
Further, if you wish to manage your wealth from Europe… Choices are even scarcer due to the high taxation, invasive policies, and difficult immigration regulations. And if you want a place friendly for foreigners and with little language and cultural barriers… You can count them with the fingers of one hand.
But today we present you with one of those lucky few: Portugal. The Portuguese Golden Visa program is widely considered the best in the world and Madeira was voted one of the safest islands in Europe and almost free of COVID-19, while it has one of the most beneficial trade zones in Europe.
The best-kept secret in Portugal is that Madeira is one of the best plan b destinations for family offices in Europe. Here’s why.
When looking to establish a family office, many families ignore lifestyle and cultural aspects. Yet, an aptly planned family office involves considering where can family members move if things go south. In the US and in the UK, things can go south quickly. Just look at COVID-19 and the political polarization in these countries. This is a factor that must be considered.
Culture is another significant aspect to consider. For example, you do not want to be a Jewish family establishing a family office in Dubai. The way you and your children will be treated and how you will feel with the language and the culture is almost as important as the tax optimization and asset protection aspect of your family office.
So, let us explain to you why Portugal checks all the boxes for wealthy families to become your top family office possibility:
Safety and culture
Wealthy Western families will feel at home in Portugal. Portuguese, English, and Spanish (more accurately, Portuñol, the name they usually give to the mixture of Spanish and Portuguese) are widely spoken. Plus, Portugal has been a long-standing cultural and political ally of the US and the UK, meaning these families are easily accepted into the Portuguese society.
Your investment advisors, bankers, lawyers, and financial consultants will treat you as locals and see you as part of their culture, meaning transactions and investments will be way smoother. Plus, your children will easily gain access to the best European university and integrate into the city’s financial life. Portugal is a small country but one of the models of recovery after the EU debt crisis thanks to its capacity to welcome foreign investment.
Also, Portugal is a safe country. Europe is, in general, a safe continent, but even there, Portugal shines for its low crime rate. Plus, it has not face refugee issues as Spain or Italy.
Portugal recognizes the value of wealth preservation.
Residency and citizenship
It does not make sense to have a family office in a country if you cannot visit that country. Many wealthy families that safeguarded their money in the US experienced this problem when they were denied visas to get there and could not solve banking issues that had to be attended in person. However, the Portugal Golden Visa is considered the best in Europe and you can receive the citizenship five years after.
Plus, you do not have to live in Portugal to keep it; you should only visit Portugal for an average seven days in five years to keep the status, while you travel visa free throughout the entire European Union. Furthermore, the Golden Visa program is flexible allowing different pathways: real estate investment, equity investment, and SIF fund investment. Depending on the type of investment, it will range between €350,000 and €500,000.
Personal tax optimization and wealth structuring
The whole point of a family office is protecting your assets and optimizing your taxes.
Well, Portugal has a non-dom regime for golden visa holders that will give you a ten-year full exemption on your worldwide income. Plus, with proper guidance and using a trust, you can have zero tax on worldwide income forever.
The arrangement is not simple, and you will need to make a thorough application. Plus, you will likely need another tax residency (Panama is a good option) to show you pay taxes somewhere. It is not simple, but with the proper documents and an expert like us by your side, you can receive tax-free personal income in a European bank. It is not a simple process, but is entirely worth it.
Corporate tax optimization
Madeira is a top destination for European companies and family offices. Madeira has a free zone called the International Business Centre of Madeira. It if fully recognized by the EU and completely whitelisted, part of the EU financial system and it will give you a 5% income tax. Establishing a Madeira company has some substance requirements (one employee and €75,000 minimum capital or six employees and no minimum capital), which are not too difficult to comply with for a family office. Moreover, Madeira has proficient service providers and do not have limitations over employment of foreigners.
Bank account safety is essential today. Any family office needs access to first-level banking and a safe bank. Unlike the rest of Europe, Portugal is receiving a massive flow of FDI thanks to its Golden Visa and its opening to foreign investment. Thus, its banks are growingly liquid. Portuguese private banks are high-level with boutique services.
Our partners have a specialized private banking team to help a family office establish relationship with the best Portuguese banks.
How to establish a family office in Portugal
A family office in Portugal is ideal for wealthy families from all over the world. You must follow five steps to establish one:
Obtain the Golden Visa for all your family.
Establish a IBCM company as the cornerstone of the family office structure. If you use it to employ staff, it can be your Golden Visa company.
Appoint an advisory team for the company made of first-level legal, financial, investment, accounting, and tax experts, which we can provide.
Open a top-notch bank account in Portugal.
Obtain a first-level international insurance policy.
You are forever free!
If you do not want to receive residency in Portugal through the Golden Visa, you can use Portugal as the base of your family office through a IBCM company plus a Madeira trust.
Contact us right now and establish your family office in Madeira.