Economy

Working with Saudi Arabia investors to achieve future diversification

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By Richard Nunn, Regional Head – East, Jersey Finance

Sunday 01, September 2019 BY MULLALLY WILLIAM

With the appetite growing for sophisticated investing in Saudi Arabia, international finance centres (IFCs) that can demonstrate jurisdictional stability and offer a broad range of high-quality services and efficient structures will become increasingly valued.

Those were amongst the findings of research recently published by Jersey Finance. The whitepaper, Jersey – A Clear Choice for Saudi Investors”, examined the various approaches sought by investors in structuring inbound and outbound investments and pointed to the potential Jersey has to leverage this growing appetite.

With more than 50 years of expertise in delivering private wealth management, trust, estate and succession planning and foundation structures, and having been working across the Middle East for many years, it’s clear that Jersey is in a strong position to play a vital role in the Kingdom’s growth story.

In fact, Jersey has established itself as a leading jurisdiction for supporting the international wealth and succession planning of families in the GCC region, and investors continue to find genuine appeal in the expertise, substance and stability Jersey can offer as an IFC, as well as its range of tried-and-tested wealth products.

As this latest paper reveals, against a backdrop of shifting markets and a changing global political landscape, investors more than ever need access to professionals that have the specific expertise to navigate the complex landscape – skills and expertise that Jersey can offer in abundance.

Diversification

In particular, the new research underlines how recent changes in oil prices have reinforced the importance of diversification amongst the Kingdom’s wealthy population. It demonstrates how Saudi family offices and high net worth individuals (HNWIs) have sought to diversify their portfolio in a manner that is more immune to commodity and oil price fluctuations by combining domestic investments with international activity.

It also emphasises the fact that, just like other GCC neighbours, wealth remains very personal in Saudi Arabia. As such, estate planning is perhaps one of the most important, but often overlooked priorities.

With this in mind, the research found that, while the holding structure most widely used by Saudi family offices and UHNWIs in an IFC is a simple holding company owning various investment special purpose vehicles, larger family offices have been moving increasingly towards more complex structures, foundations and trusts that offer considerable benefits in addressing wealth preservation, estate planning and investment diversification goals.

Evolving

There is no doubt that the environment is evolving, and there is real potential for Jersey to play a central role, working with investors and families in Saudi Arabia to support their internationally focused investment and succession strategies.

Not only does Jersey maintain a leading status in complying with the highest international standards, but it also offers tax neutrality, a broad range of structures, jurisdictional stability, proximity to European centres, a robust and flexible regulatory framework, and an expert workforce of almost 14,000 professionals.

Over five decades Jersey has developed an infrastructure that is absolutely geared up to supporting investors with global ambitions and, given their priorities as highlighted in this latest paper, this should resonate clearly with investors and families in the Kingdom.

 

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