THE ERA OF GLOBALIZATION – A BLESSING OR A CURSE?
Globalization is well underway and, let’s be honest, it is not about to slow down any time soon. Negative effects on local communities rear their ugly head on a daily basis. From a South African base the skilled workforce is drastically decreasing year on year… or is it month on month? Chaos looms and opportunity seems to be dwindling.
Emigration often seems to be the most viable option, following the masses but is it really the only option. We no longer live in a world where it is necessary to live in the town, city or country wherein our employing company is based to continue work there. As individuals, we are able to spread our finances and assets globally which provides intricate protection facilitated by the laws of the countries in which those assets are held. Success is no longer limited to the country you are in. In fact, it is becoming vital to be successful on a global scale to ensure success on the ground level.
Long term growth, generational wealth and business success will come to those individuals and companies, large and small, that can tap into global networks and meet global standards. Assets will be protected and grow when spread across multiple countries with the right service providers who can be trusted to ensure that they are maintained and managed.
Even when you consider local communities; the class division of globalization, or the emerging information economy, will likely be between cosmopolitans and locals who are stuck in one place. Even in this instance the best way to preserve control and growth is to be competitive globally.
HOW IS A GLOBAL BASE ACHIEVED?
Start small, develop a plan to grow a structure in time (whether personal, commercial or both) that drives towards long term growth that can be maintained locally or that makes it easier to move positions later. This is an investment in your future and therefore a marathon rather than a sprint.
A global goal is a long-term plan. Yes, there are options for opportunistic profit-shifting which could lead to a reduction in tax, but if your thoughts are long term the reality is that the advantages of current tax havens may evaporate in a few years. Establishing a global footprint, therefore, takes careful consideration and planning that incorporates not only tax and financial considerations, but also operational efficiency and opportunity on the one hand and legislative asset protection on the other.
So what should you consider when you begin thinking global:
This may seem contradictory to the comment above relating to tax savings, however, tax savings is not the only consideration when thinking global and certainly not the first. Your own tax position from your base and what you will need to deal with to move assets, invest offshore, establish alternate bases and/or emigrate.
Furthermore, difficulties associated with loop structures need to be considered, tax residency, and tax regulations of the foreign country.
- Legal Considerations
When thinking corporate consider legal implications on structures you have based in SA and how these may interact with your offshore options. Tax and exchange control regulations are also a consideration.
As an individual it is important to understand how your investments (whether financial or immovable) are managed in alternate jurisdictions, is there ever a possibility they will need to be brought back to your base country, can anything offshore be touched from alternate jurisdictions.
What are your long term goals and what jurisdictions fit in with these plans? You must distinguish between personal goals and business goals to decide on the most effective structural bases to work towards.
As a corporate grow a global base, establish an international presence on social media, push for global exposure regardless of base jurisdictions.
- Estate Planning
Not only should you constantly adapt and change your will annually while structural changes are implemented but you need to consider situs and probate in all your jurisdictional bases. These aspects alone can save your estate undue admin and loss in future.
- Appoint Trusted Service Providers
You cannot establish a global presence alone. You need attorneys, financial service providers, emigration specialists and tax specialists in all jurisdictions to ensure your global ambitions are implemented with ease. The only way to do this is by contracting with service providers who have a global reach and presence from your local base.
THE GLOBAL FUTURE
In conclusion, globalization should always be considered in line with long term objectives. It is a strategy that factors in the current situation, potential emigration, long term growth and the back-up you need to be protected when things do not go according to plan.
If you are based in South Africa and the option of emigration is a consideration look to local innovators, new ways of thinking, enhance competence by maintaining high-quality standards and begin growing your global network. Not only in 1st world countries but other African countries. You already have the initial base here with the ability to establish links to world-class companies. Alternatively, you have the resources to protect your assets and structure and plan your future family succession without having to abandon the lifestyle South Africa provides.
Always bear in mind you need the assistance of skilled professionals to implement your global goals. Please feel free to contact us any time to run over any queries you have regarding tax, estate planning, corporate structuring and your future goals.
At TLi Global we have embraced the concept of globalization and act as your long-term partner to provide advice and facilitate your global goals with the help of our international connections. As such we have put together a ‘Think Global’ series and will be launching a series of blogs, newsletters, webinars and vlogs focussing on the topic of globalization and emigration.
Our first webinar will be held on 24 November 2021 and will focus on the means to thrive locally by taking advantage of the global economy.
If you would like to attend our webinar series please register at the following link: https://TLiwebinar.subscribemenow.com/
You can subscribe to our blog and newsletter here: https://ops-ae49a.subscribemenow.com/