This month’s comment comes from Philip Paschalides. Philip Paschalides is a Partner in the Cayman Islands at international law firm Walkers. He is a member of the multi-disciplinary Private Capital & Trusts Group, where he represents private clients and family offices on cross-border transactions and relocation to the Cayman Islands.
Whether you follow Brillat-Savarin (renowned gourmet) or Goethe (leading authority on consorting with the devil), the measure by which you choose to judge others probably says more about you than it does about those you are judging! As a partner in the Private Capital & Trusts practice of an offshore law firm which serves globally mobile clients, I am bound to observe that the jurisdiction you choose as your base also says something about who you are.
Your choice of citizenship
We live in a world where, for some (and it is a greater number than one might think), the lottery of birth is no longer the final determinant of citizenship. Citizenship is now as much a matter of choice as the choice between the salade verte or the Tournedos Rossini or whether to associate with the BRMC or the Beetles. There is now more jurisdictional choice on offer than ever before - the first citizenship by investment programme was established by St Kitts & Nevis in 1984 and there are now over 100 countries with such programmes.
COVID-19 has created three waves of fear: fear of the disease itself; fear of the national response to the disease (or lack thereof), and fear of how (and by whom) the costs of the disease and the national response will be borne. Many have been looking closely at their leaders in the light of those three fears and assessing whether they are comfortable with their personal exposure. The pandemic, therefore, has turned up the heat on the migration question.
We say of consumers that they “vote” with their feet. Perhaps the ultimate vote for any member of a society is, quite literally, for them to vote with their feet: to move elsewhere.
Citizenship as a statement of identity
This choice constitutes a powerful statement (likely critical) about the society one is leaving yet it also constitutes a powerful statement (likely an endorsement) about the society one is embracing. It is clearly very important for the maker of such a statement carefully to manage content and tone and to be aware of how that statement might be interpreted or misinterpreted (Hint: consult appropriate professionals). The destination itself is an integral part of that dynamic.
COVID-19 has prompted many of my clients and contacts to consider a trade: the metropolis for a smaller community; the power office suite for the laptop and curated zoom backdrop; the society which has perhaps grown too large, impersonal, unsafe and inefficient for the smaller community whose organisation is less complicated, less needy of tax revenue and where one feels safer and more in control.
Thinking through the messaging behind relocation
Small “island” states such as the Cayman Islands, where I live, provide all those advantages of the smaller community and some (like Cayman) enjoy hyper-connectivity to the financial centres and to influencers from all walks of life and regions. Some of these island states (and not all of them are created equal or are evolving equally) are currently benefitting from the growing recognition that small can indeed be beautiful.
Given that a move of this kind constitutes a significant statement, one should understand what the destination jurisdiction entails and how to position and articulate the messaging clearly. Informed choice and expert management of messaging are both critical. Moving house, they say, is one of life’s most stressful experiences; moving jurisdictions even more so. With the guidance of the right professionals at the right time, it need not be that way.
Philip Paschalides is a Partner in the Cayman Islands at international law firm Walkers. He is a member of the multi-disciplinary Private Capital & Trusts Group, where he represents private clients and family offices on cross-border transactions and relocation to the Cayman Islands.