Global political uncertainty and Uruguay's rise as a safe haven for wealth

FOs are largely unregulated in most jurisdictions, provided they do not manage third-party or family assets or engage in other regulated activities. In fact, in most of these jurisdictions, there is not even a specific legal form that FOs are required to adopt, although most use an incorporated corporate structure and register it, as appropriate, with the relevant SFC.

The free movement of capital in most jurisdictions means that FOs can freely shift and move their portfolios across countries, currencies, and asset classes. Their exemption from regulation, the inherent secrecy regarding their ultimate beneficial owner, and the fact that their sole purpose is to manage family wealth rather than to invest long-term in their country of domicile/jurisdiction can lead to them being perceived as entities that offer no particular benefits to their current country of domicile.

These two factors could make family offices targets of the Trump administration through targeted regulation and/or taxation, on the grounds that they use the U.S. as a venue for wealth management but offer nothing in return in terms of MAGA. This could be exacerbated if the FOs in the U.S. are of Latin American origin or, in fact, from any country that is currently subject to U.S. measures for political reasons. We emphasize, however, that the regulation of FOs for political reasons will not necessarily imply control or confiscation of assets, as the Trump Administration has not entered that specific territory. But it may involve differentiated taxation and regulation.

He suggests diversifying across jurisdictions rather than closing offices in the U.S. What makes a country an ideal “second hub”?

Zero taxation on all legitimate free trade zone activities, a complete absence of capital controls, and a highly business-friendly environment, coupled with a stable and democratic political system. While many countries offer some of these conditions, virtually none—exceptUruguay—offer a complete absence of taxes on free trade zone activities, provided they are registered in a free trade zone.

Compared to giants like Hong Kong or Singapore, what is the competitive advantage of Uruguay and Zonamerica?

While jurisdictions such as Hong Kong and Singapore offer favorable tax regimes for certain activities carried out by FOs, Uruguay has a clear advantage in that it offers full tax exemptions under its free trade zone regime—a rarity on the international stage. In addition, it boasts a significantly more competitive cost structure in terms of office space, housing, and services, while maintaining high standards of infrastructure and quality of life.

But perhaps the most significant difference lies in the financial ecosystem.Zonamericais home to more than 70% of the financial ecosystem found in Uruguay’s free trade zones, allowing a family office to operate within an environment that brings together global banks, asset managers, law firms, and specialized consulting firms.

This combination of institutional stability, tax benefits, world-class infrastructure, and a robust financial ecosystem positions Uruguay—and Zonamerica in particular—as a highly competitive platform for structuring and managing wealth across Latin America.

"Zero-tax" guarantees sound appealing, but how credible are they over a 20-year period?

Uruguay has a solid track record: it does not renege on promises made by democratic governments. Breaking the rules governing free trade zones would cause irreparable damage to its international reputation—something the country cannot afford. Legal certainty is its most valuable asset.

To what extent do operating costs factor into a financial institution’s decision to establish a satellite office outside the United States today? Is Uruguay competitive in that regard?

A great deal. There is growing evidence that FOs in the U.S. and parts of the EU are closing and relocating to more cost-effective areas. An average-sized FO has between $100 million and $200 million in AUM and can sustain administrative costs of between $1 million and $2 million annually, which must be offset by the profits generated. Smaller FOs will be even more cost-sensitive. Rental costs in Uruguay’s free trade zones, as well as personnel costs, are very low compared to those in Asian hubs like Hong Kong and Singapore, where rents can be astronomical.

You mention that the growth of fintech companies in the wake of the pandemic has not been accompanied by a serious debate on their regulation. Is this a ticking time bomb?

It’s surprising. Family offices manage billions of dollars, and the lack of global regulation won’t last forever. Uruguay has the opportunity to get ahead of the curve and position itself as a stable regulatory haven before other countries impose reactive and aggressive rules.

How do you plan to integrate new technologies, such as artificial intelligence, into this heritage ecosystem?

The goal is to move away from standard “portfolio management” services, where there is too much competition and little added value. At Ecognosis, we are using unique quantitative techniques to identify characteristics of family offices that the market overlooks. Furthermore, Zonamerica attracts not only families but also the entire ecosystem of services (legal, accounting, IT) that surrounds them, creating a hub of comprehensive value.

What is the secret to successfully transferring assets from the U.S. to Uruguay?

This must be done slowly, in a carefully structured manner, and, above all, with a strict low profile. Avoiding the “visibility effect” is essential for protecting assets in times of political uncertainty.