Q1 How should businesses and individuals prepare for and respond to new governments across the world?
Governments play a pivotal role in shaping the financial landscape by imposing regulations, setting corporate and personal tax rates, and controlling the money supply and interest rates. They also enact policies which may encourage or discourage foreign investment. These measures and others can have both immediate and long-term effects on investment decisions. A stable government fosters investor confidence, while instability and uncertainty can lead to risk aversion and a decline in investment activity.
In recent years, key political elections have reshaped the global landscape, and more are on the horizon. These are challenging times for businesses and individuals to navigate, but they can also create opportunities. Now more than ever, it is crucial for businesses and individuals to be agile, adaptable, and resilient.
Stay informed. Having a firm grasp of events that are unfolding around the world is key to making informed financial decisions. Familiarize yourself with the history of the jurisdictions where you operate and invest. Have they maintained political stability, a secure economic framework, a robust and transparent regulatory environment, and an attractive investment climate, despite any previous changes in leadership? Stay current by following reliable news sources, signing up for targeted alerts, joining professional organizations, and observing relevant virtual communities on social media.
Build a well-rounded team. Select experienced service providers with proven track records across multiple jurisdictions. Research and interview investment managers, tax consultants, lawyers, and other professionals to ensure that you have a team in place that can guide you through turbulent times and help you achieve your current and long-term financial goals.
Embrace networking. Develop a robust network of government contacts, insiders, suppliers, advisors, and industry peers. A strong, reliable network helps businesses and individuals stay informed, allowing them to remain resilient during times of political change or unrest.
Plan with foresight. Have a longterm financial plan in place. If structured correctly, this will allow you to weather the uncertainty and volatility of changing governments and policymakers. The best way to ensure that your investment portfolio meets not only your current and long-term financial goals is to diversify. A well-diversified portfolio will reach across various asset classes, industries, and jurisdictions – thereby dispersing risk – and should include both traditional and alternative investments.
Invest in private markets.
Businesses and individuals heavily invested in public markets miss out on the benefits of private market investing, including portfolio diversification and growth through unique investment opportunities in assets not traded on public stock exchanges. Private market investments are not highly correlated with the public markets and therefore are not subject to the volatility that is often seen in those markets. While private market investments typically have long holding periods and higher overall risk, they also have proven potential for higher than normal returns. Historically, small businesses and individuals were not able to invest in private markets because those markets were generally limited to accredited investors or buy-ins were at unattainable levels. This is changing due to advances in government legislation and service providers offering creative investment structuring solutions like syndicated accounts, segregated accounts, or funds where investors can pool their money—and share risks and rewards—with other like-minded investors.
Develop a contingency plan.
Identify the "what if" situations that could arise from changing political, economic, regulatory, and market factors that may affect your financial goals. Put a plan in place that will allow you to adapt to those situations, and keep it up to date. In the event of any of those "what ifs" coming to fruition, your efforts will translate into quicker recovery times, financial savings, and minimized damages.
Q2 How can your clients remain agile and respond to changes in legislation and volatile policymakers?
Changes in legislation and volatile policymakers are inevitable in even the most stable jurisdictions. Remaining agile and responsive is crucial for safeguarding and growing your wealth. This can be achieved by relying on the measures that you have already put in place.
We work closely with clients to help them build their foundation for financial success: staying informed, building a well-rounded team, embracing networking, planning with foresight, and having a contingency plan in place. We advise clients to set aside time to stay abreast of local and international developments. We meet regularly with clients and advise that they meet regularly with the other professionals on their team. We ensure their advisory team has an intimate knowledge of their account and the necessary experience and resources to monitor volatile policymakers, navigate relevant changes in legislation, and execute instructions promptly. We advise clients to utilize their broader network, which can offer further insight and support. We advise clients to know the makeup of their investment portfolio and, under their advisors' guidance, regularly assess it to ensure it aligns with the immediate and long-term financial goals. Finally, in an unexpected turn of events, clients should trust in and follow their contingency plan.
Q3 What is the outlook for businesses in your jurisdiction in 2025 and beyond?
The outlook for businesses in Bermuda is consistently strong, and this holds true for 2025 and beyond. Bermuda's enduring success is rooted in the island's foundational principles that have cemented its status as a blue-chip jurisdiction for over 70 years. Bermuda offers a stable political climate, progressive legislation, a gold-standard regulatory framework, a strong probusiness and pro-foreign investment culture, a world-class technological infrastructure, and a highly qualified and sophisticated workforce.
As one of the world's leading offshore financial centres, Bermuda is renowned for its expertise in insurance and reinsurance, investment funds, asset management, and high-networth services. The island has a tax-neutral environment with no income, withholding, or capital gains taxes apart from a corporate income tax applicable only to businesses with a global revenue above 750 million euros.
Bermuda stands as an ideal jurisdiction for those seeking a secure, predictable environment to grow their wealth and expand their operations.
Our latest Visionaries publication features 24 members from 18 jurisdictions. Dive into the first of four insightful chapters addressing global business challenges in a year of elections, with this edition covering Technology, Transgressive Behaviour, Geopolitical Climate, and Intervention & Regulation.
Read the full publication here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
