- Indian business houses are setting up family trusts in places like Malta and Dubai to keep their money safe.
- A business family based in New Delhi, with interests ranging from real estate to infrastructure, recently set up a family trust in Malta, Europe. The family trust has around 20 beneficiaries.
- The family, whose estimated net worth is around Rs 1,500 crore, is looking to gradually transfer all the assets to the family trust, according to people familiar with the matter.
- another Mumbai-based family, which has a presence in logistics industry, the problem was not just about insulating the family assets from future litigation. The old-South Mumbai family, which at one point was one of the wealthiest in the country, has created two family trusts with separate beneficiaries in Singapore and Malta.
- Selectively, Indians are creating family trusts outside India hoping that they could get some insulation or asset protection in case of any loan default. But while these so-called tax friendly jurisdictions may be helpful from a tax point of view, but with the latest information exchange and other laws, it’s only beneficial if these trusts are created by non-residents,
- This follows an earlier trend where most business families had made sure that one of their family members become resident of another country due to fear of taxmen and prosecution under insolvency proceedings. The newly created trusts would mean that Indian authorities may have limited access to the assets held outside the country. In many cases, complex structures are created whereby the foreign registered trust is also the holding entity or beneficiary of the main Indian family trust.
- Earlier, most of the assets were held by rich Indians in locations such as Switzerland or Ireland through investment companies, which would be used as vehicles for investments in the UK or other countries outside India.
- Apart from Malta and Dubai, other new locations where the family trusts are being created include some locations in the US, Africa and even Abu Dhabi in the UAE.
- many promoters are creating family trust structures, where all the wealth is held by the trust.
- This information is shared as is basis , editor or owner do not have explicit interest in it.
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