While London has hosted wealthy individuals from Eastern Europe and the Middle East, enriched Chinese investors are now seen as the next demographic group to make a splash, the law firm told WealthBriefing in a recent interview.  

“A lot of Chinese people want to install a family here, typically on an investor visa. It is a hugely attractive option. They also have access to the European Union if they get a British passport,” Alex Ruffel said, speaking from her firm’s offices in London’s Mayfair district.

She spoke of how immigration and cross-border wealth issues are a key part of the law firm’s service offering and likely to remain a busy area, with government legislative plans driving part of this business flow.  Another partner at Berkeley Law, Nick Rucker, added in the same interview: “It is a key growth issue for us. They have got to be able to travel – that country cannot be an island economically or politically.” 

Under new government plans – not yet finalised – investors spending more than £10 million could qualify for permanent residence in the UK in just two years; those investing £5 million could qualify in three years while those committing £1 million would require five years. According to Penningtons, another law firm, once individuals are resident, they can still pull this investment out at any time.

There are ironies here. The previous Labour-led UK government imposed a top income tax rate of 50 per cent on earnings of £150,000 a year or more and also imposed an annual levy on non-domiciled residents. Bank levies and other imposts have prompted some figures in the financial services sector to warn of an exodus from London for friendlier climes in Switzerland or Singapore, for example.

But the latest move, which could encourage an investor influx, is just one kind of business trend that Berkeley Law sees.

“10 years ago, a lot of work was UK-tax focused. Now, a lot of it is about succession planning and risk management. This may, in particular, be the case if you are from unstable jurisdictions politically,” Ruffel said.

For example, the law firm will advise clients who may, for various reasons, be very rich and yet put all their funds into just one bank or other institution. As a result, a lot of what the law firm does is to restructure the wealth holdings of clients along more diversified, rational lines.

The financial panic of 2008 focused client minds on the dangers of being overly reliant on a single bank as custodian of their money, she said.  

New firm

Berkeley Law has five partners, out of a total of 21 staff. The firm held its launch party in May 2010.

“We decided we were better able to advise clients in Mayfair where the private banks are and a lot of our clients live. We felt very strongly that legal wealth advisory was not being done brilliantly in some of the larger law firms. But this is a key area in wealth management,” said Rucker.

“In rising markets, people are obsessed with how their assets and investments are managed, when how you own these things and how you plan is as important, if not more important in many cases and especially in bear markets,” he continued.

The law firm is able to see, from its own client relationships, where demand for cross-border legal and wealth management services is coming from: India, Eastern Europe, the CIS and Middle East. Some 70 per cent of its clients are from outside the UK.