Passport, residency or domicile? That is the question. High net worth (HNW) families have unique opportunities and challenges when it comes to living as global citizens. On the one hand, global citizenship can provide access to a wider range of opportunities, from investments to international education. On the other hand, it can also expose families to a range of threats, from tax and regulatory complexities to political instability and security risks. So, what are the opportunities and threats of living as global citizens for HNW families?
One of the primary benefits of living as global citizens is the access it provides to a wider range of opportunities. HNW families who are global citizens can leverage their wealth to invest in a broader range of markets and industries, both domestically and internationally. This can help them to diversify their investments and reduce risk. It can also provide access to new business opportunities, particularly in emerging markets where economic growth is strong.
For HNW families, education is often a top priority. Living as global citizens can provide access to some of the world’s top educational institutions, including universities and boarding schools. This can provide families with the opportunity to give their children a world-class education and to expose them to different cultures and ways of thinking.
Living as global citizens can provide opportunities for cultural enrichment, particularly through travel. HNW families who are global citizens have the enviable privilege of being able to travel to different parts of the world and experience different cultures, foods, and ways of life. This can broaden their worldview and provide them with a greater appreciation for diversity.
One of the primary threats of living as global citizens for HNW families is the tax and regulatory complexities that come with managing wealth across multiple countries. Different countries have different tax laws, and HNW families who are global citizens must navigate these laws carefully to avoid penalties and other legal issues. Additionally, different countries may have different regulatory requirements for business operations, which can be challenging to navigate.
Living as global citizens can also expose HNW families to political instability and economic risks in different countries. Global citizens and their families must carefully evaluate the risks of investing in different countries and take steps to mitigate these risks. Security risks, particularly in countries with high levels of crime or political instability can have a detrimental effect on a families physical and mental wellbeing. Families who are global citizens must be sure to take all necessary steps to ensure their safety and security when traveling or living in different countries. This may include hiring security personnel, avoiding certain areas, and taking other precautions.
One other potential problem area is one that can be easily overlooked or downplayed; social isolation. Why? Because living as global citizens can distance families from close knit social and friendship groups, particularly for families who move frequently or spend extended periods of time away from their home country. This can impact their ability to develop and maintain social connections and support networks. This means all members of the family must make a conscious effort to maintain their social connections and build new relationships in different countries. Of course, that can be a difficult task, but it is made a lot easier with the help of a well connected family office to create and help maintain connections that increase and stabilize the family’s social footprint.
Yes, living as global citizens can expose HNW families to a range of threats, from tax and regulatory complexities to security risks and social isolation. On the other hand, it can provide these families with a range of opportunities, from access to global investments to cultural enrichment. For many families, the positive elements far outweigh the negative.
