The Maltese government introduced the Malta Business Wallet on 14 May, a new platform designed to improve the ease of doing business in Malta by enabling business owners to users to manage and selectively share their personal and corporate data with competent authorities and subject persons through a secure digital repository.

Available as an application on the Apple Store and Play Store, the Malta Business Wallet will introduce the ‘once only’ principle in relation to due diligence. It is intended to lead to a more standardised system, reduce unnecessary delays and increase efficiency.

The legal and operational framework under which the system operates was established by the Companies Act (Central Data Repository) Regulations 2026, issued as Legal Notice 151 of 2026 on 15 May, which provide for:

• The creation of a secure digital central data repository managed by the Registrar of Companies that allows company officers and legal representatives to manage personal and corporate data in a single location.
• Assistance to subject persons and competent authorities in discharging their duties under anti-money laundering and counter-funding of terrorism laws.
• The use of advanced technological standards, such as Application Programme Interfaces (APIs) and biometric data, to verify the identity of users and ensure the authenticity of uploaded documents.
• The implementation of the principle of “selective disclosure”, ensuring that users retain total control over which specific relying parties can access their information and that the repository remains a tool for convenience rather than a mandatory burden for involved parties.
• Assurance that verified electronic data within the repository is deemed a valid copy for all legal purposes and cannot be denied legal effect due to its digital form.
• The elimination of bottlenecks and decreased operational costs by providing a seamless data-sharing mechanism that remains strictly voluntary for all parties.
• Positioning the Malta Business Registry as a supervisory authority that ensures all data processing aligns with the Data Protection Act (Chapter 586 of the Laws of Malta) and the EU’s General Data Protection Regulation (GDPR) (EU Regulation 2016/679).

The Regulations define the Registrar’s duties as being to establish, manage, operate and maintain the
repository and establish a five-year data retention period, which is extendable to a maximum period of 10 years if the data is required for investigating serious crimes, such as money laundering or terrorism financing.

Authorised users of the repository, include company officers, partners, and representatives of bodies corporate. Relying parties who may be authorised to access and use the repository include competent authorities and subject persons conducting due diligence. Relying parties making use of the repository are required to inform the Registrar of any unauthorised or unjustified access to the repository promptly.

The Registrar is empowered to terminate or suspend access to the repository and to any data and information it contains to any relying party that fails to implement the necessary security safeguards and to only reinstate it once the necessary measures have been implemented to prevent the same from
occurring again.

The specific data and information that users can upload, submit, store, retrieve, rectify, erase and submit on the repository, include identity documents, evidence of registered addresses, and documentation of subject person engagement.

The Regulations clarify that using the repository does not exempt users or subject persons from their existing legal obligations to provide or collect information for customer due diligence purposes in accordance with applicable laws and regulations.

Competent authorities are required to designate specific officers or employees to access the repository, and to implement safeguards for data used in investigating financial crimes.

The Registrar is required to verify all data and user identities using secure electronic systems, ensuring third-party providers meet strict data protection standards. Biometric data is permitted only when strictly necessary to prevent identity fraud, and the Registrar may access information from other public authorities to ensure the repository remains accurate and functional.

Importantly, users have the right to choose which relying parties see their data, information and reports stored in the repository and the right to vary or revoke such access to any one or more relying parties following the procedures established by the Registrar.

The Registrar is authorised to charge fees for access to and use of the repository, including fees relating to registration, maintenance, access and verification services. The Regulations establish criminal penalties for providing false or misleading information through the repository, or for making fraudulent use of the repository, including a fine of up to €50,000 and, or up to three years imprisonment.

“The Malta Business Wallet will represent an important transformation for our country’s business ecosystem,” said Dr Geraldine Spiteri Luca, Chief Executive Officer and Registrar of the Malta Business Registry. “As the Malta Business Registry, we remain committed to delivering efficient and effective services.”

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The Malta Financial Services Authority (MFSA) launched a public consultation on 18 May on the potential tokenisation of financial instruments and real-world assets, which would represent a significant step forward in integrating distributed ledger technology (DLT) within Malta’s financial services framework.

Tokenisation refers to the digital representation of ownership rights in financial instruments or real-world assets, which can enable activities such as trading, settlements and record-keeping of investments to take place through digital platforms.

It can also improve transparency and auditability through the maintenance of a shared, time-stamped transaction records that are accessible to authorised participants within a controlled network environment, subject to appropriate governance and data protection.

The Malta initiative reflects growing international momentum, including the EU’s 2023 DLT Pilot Regime, which effectively introduced a regulatory sandbox for the trading and settlement of financial instruments within the Markets in Financial Instruments Directive (MiFID) II framework using DLT, as well as broader global adoption trends across capital markets.

To inform future policy direction, the MFSA is seeking feedback from industry stakeholders and the public to better understand market readiness, identify priority asset classes and evaluate the infrastructure, legal, and regulatory considerations required to support tokenised markets in Malta.

The MFSA said it recognised that tokenisation could offer potential benefits such as enhanced efficiency, transparency, automation, and improved access to investment opportunities, but emphasised that such developments would need to be carefully aligned with existing regulatory objectives, including investor protection, market integrity and financial stability.

The consultation aims to assess whether tokenised financial instruments can be accommodated within existing EU legislative frameworks, or whether additional interpretative guidance, national measures or future EU regulatory developments might be required. The key areas of focus include:

• Market appetite and strategic positioning, including the identification of asset classes most suitable for tokenisation in Malta.
• Legal and regulatory considerations, such as ownership rights, settlement finality and the enforceability of smart contracts.
• Market infrastructure requirements, including token registries, interoperability between DLT systems and custody arrangements.
• Investor protection and risk management, covering emerging technological, operational and financial risks.
• Domestic market development, including the role of investment firms, crypto-asset service providers (CASPs) and other market participants.

The MFSA is also seeking views on whether tokenisation can be effectively implemented within existing regulatory frameworks or whether targeted updates will be necessary to facilitate scalable adoption.

In particular, it is seeking to identify operational challenges, regulatory gaps, infrastructure needs, and potential use cases that could support the responsible development of tokenised financial markets in Malta.

“Tokenisation enhances efficiency across the issuance, trading, and post-trade processing. The use of permissioned DLT can support near real-time processing and facilitating the role of transfer agents, thereby reducing operational risk,” said Ian Meli, MFSA Head of Investment Services Supervision.

“By complementing existing regulatory frameworks, including those under MiFID and Alternative Investment Fund Managers Directive (AIFMD), and taking into account the broader EU digital finance framework, including the Markets in Crypto-Assets Regulation (MiCA) where relevant, tokenisation can reinforce Malta’s positioning as a forward-looking financial centre that remains responsive to technological developments.”

The structured approach being taken by the MFSA is aimed at developing a better understanding the implications of tokenisation across different areas, while ensuring that any developments take place within a controlled framework that preserves legal certainty.

“The MFSA wants to ensure that any new framework will be robust from a customer-protection and market integrity perspective, which requires that the right infrastructure, legal and regulatory considerations are in place before it starts to operate,” said Stephen Griffiths, Managing Director of Sovereign Trust (Malta).

“It must also ensure that any regulatory framework remains proportionate and aligned with existing requirements. This includes ongoing engagement with stakeholders through consultation process, as well as continued assessment of emerging developments and practical implementation considerations.”

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Changes to the Isle of Man’s immigration rules relating to the Worker Migrant route come into effect on 1 June. They are designed to align more broadly with the UK Skilled Worker route, while retaining Island-specific requirements designed to reflect local labour market needs.
They are also intended to strengthen safeguards within the system, reduce the risk of abuse and ensure the route remains fair, robust and responsive to the Island’s economic and workforce needs.

Key changes include updated occupation codes, a greater focus on higher skilled roles and a new Sequential Labour Market Test, which will prioritise recruitment both locally and within the Common Travel Area (CTA) before being extended overseas. Other measures also strengthen rules on which roles can bring dependants, changing employers, and employer compliance.

New salary thresholds for Worker Migrant roles also took effect from 1 June. The changes update salary requirements while balancing employer access to essential skills with safeguards against low-wage migration and exploitation. Thresholds will be kept under review using UK salary data, local labour market evidence, and recruitment trends to ensure the system remains fair and responsive to the Island’s economic needs.

These changes apply to new Worker Migrant visa applications only. Any Visa or Confirmation of Employment applications that were submitted before 1 June will continue to be considered under the previous rules. Any Confirmation of Employment issued before the 1 June, which supports a visa application received after 1 June, will also be processed under the previous rules.

People already living and working in the Isle of Man under an existing and valid Worker Migrant visa will not be affected.

‘These reforms provide greater clarity and consistency for employers, while ensuring appropriate safeguards are in place to protect the integrity of the system,” said Isle of Man Treasury Minister Chris Thomas. “Together, they support a balanced and sustainable approach to inward migration that meets the needs of the Island’s economy and workforce.’

The CTA is an administrative arrangement between the UK, Ireland and the Crown Dependencies (Isle of Man, Guernsey and Jersey) which is implemented in UK domestic law in statute. It was developed to facilitate the principle of free movement for British and Irish citizens between the UK, Ireland and the Crown Dependencies, and ensure that British and Irish citizens continue to benefit from a mutual enjoyment of rights.

Schedule 4 of the Immigration Act 1971 as extended to the Isle of Man, makes specific provisions to ensure that the immigration laws of the UK, Jersey, Guernsey and the Isle of Man are integrated. In practice, this means that where a person has been granted leave to enter or remain in the Crown Dependencies and then proceeds directly to the UK, or the other way around, that leave and any conditions attached to it is treated as if it had been granted in the UK.

The Isle of Man government engaged with the Island’s business community through workshops with the Chamber of Commerce and industry-specific meetings to communicate the changes. Building on feedback, additional operational guidance and updated FAQ documents have been published to ensure further clarity for businesses and migrants.

“As more entrepreneurs, investors and businesses explore relocation opportunities in the Isle of Man, this provides more clarity and transparency within the immigration framework and reinforces the Isle of Man’s position as a forward-thinking international business centre that welcomes skilled individuals while supporting the needs of the local economy and workforce,” said Sharon Lannigan, Director of Business Development & Marketing at Sovereign Isle of Man.

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14 July 2026, the UK Supreme Court held that a director cannot rely on a sincere belief that he or she is acting in the company’s best interests to justify covert and disloyal behaviour that subverts the board of directors’ agreed strategy.

In Saxon Woods Investments Ltd and others (Respondents) v Francesco Costa (Appellant) [2026] UKSC 21, the appeal concerned the standard of behaviour required of a company director, as a fiduciary who owes a duty of loyalty to the company, and who is required to act in good faith, when the director genuinely disagrees with his or her fellow directors as to the best way forward for achieving success for the company.

Spring Media Investments Ltd (SMI) was a company incorporated in England and Wales. It was the holding company for a group of companies that provide creative services to existing businesses in the fashion, beauty and luxury brand sectors. The appellant, Francesco Costa, was a director at all material times until October 2025, and chair of the board until July 2024. Costa was not himself a shareholder in the company but held a substantial indirect interest through a Luxembourg entity. The first respondent, Saxon Woods Investments Ltd, held 22.33% of the shares as at 31 December 2019.

The business was originally founded in 1996 as Spring Studios Ltd (SSL) by its initial chief executive Mark Loy, and two other individuals who left soon afterwards. On 20 May 2016, a new shareholders’ agreement was executed in respect of SMI replacing an earlier shareholders’ agreement from 2013. The parties to the agreement were: SMI, SSL, and all the invested shareholders including Saxon Woods and Loy.

Under the agreement, SMI and the investors agreed to work together in good faith towards achieving an ‘exit’ – the sale of SMI or its shares – by no later than 31 December 2019. Although the conduct of the SMI’s affairs was primarily entrusted by its constitution to its board of directors, it delegated the conduct of the sale process exclusively to Costa.

The sale process was not carried out in accordance with the agreement because Costa believed that a sale later than by the end of 2019 would be likely to generate a better financial return for SMI and the investors. The trial judge found that Costa had adopted various tactics to achieve his objective of effectuating a later sale.

These included: ensuring that no other director (save for one) had any knowledge or involvement in the sale process, misleading the board by giving his fellow directors the impression that SMI was fulfilling its obligations under the agreement (whereas to his knowledge it was not) and failing to disclose to the board that his instructions to SMI’s advisors in connection with the sale did not encompass achieving a 2019 exit.

Costa ultimately achieved his strategic objective of delaying any sale beyond the end of 2019. Unfortunately for Costa, SMI and the investors, the prospect of a profitable exit was destroyed by the adverse impact of the Covid Pandemic on SMI’s business in and after 2020.

Saxon Woods presented a minority shareholders’ petition against Costa for relief from unfair prejudice under sections 994-996 of the Companies Act 2006 (CA 2006). It did so on the basis that Costa had been personally responsible for SMI’s failure to abide by the agreed exit strategy, so that he should be ordered to buy out Saxon Woods’ shares in SMI at the price reflecting the value which those shares would have had if that strategy had been followed and an exit achieved in 2019.

At the trial, the judge held that Saxon Woods’ case on unfair prejudice had been made out, but Costa’s conduct had not amounted to a breach of fiduciary duty under section 172 CA 2006 or involved dishonesty on his part. The judge therefore made only a conditional buy-out order requiring Costa to buy Saxon Woods’ shares at the value they would have had at the end of 2019 if it could be proved at a later hearing that, had SMI complied with the agreed exit strategy agreed in the SHA, a final offer of more than USD75 million net of debt would have been received for SMI by the end of 2019.

Both Saxon Woods and Costa appealed. The Court of Appeal dismissed Costa’s appeal and allowed Saxon Woods’ appeal. The Court of Appeal ordered an unconditional buy-out by Costa of Saxon Woods’ shares, with the exact value (as at the end of 2019) to be determined at a further hearing in the High Court. The primary reason for the Court of Appeal’s departure from the trial judge’s order was that it considered that Costa had been in breach of fiduciary duty under section 172 CA 2006.

In the Appeal Court’s view, Costa’s deception of the board was dishonest according to the modern objective test of dishonesty in Ivey v Genting Casinos (UK) Ltd (t/a Crockfords Club) [2017] UKSC 67; [2018] AC 391, and therefore not in good faith. In addition, the Appeal Court held it was not open for Costa to formulate or act upon his own judgment about a strategy for the success of the company, since that had been conclusively determined by the shareholders’ agreement. Costa appealed against both conclusions to the Supreme Court.

The Supreme Court unanimously dismissed the appeal. Giving the judgment, Lord Briggs said it was a long-standing principle that the court would not interfere with the exercise of the business judgment of directors in managing the affairs of a company provided that the directors acted bona fide in what they considered to be in the best interests of the company.

The directors’ duty as articulated in Re Smith and Fawcett Ltd [1942] Ch 304 was understood as a fiduciary duty of loyalty, and the test to determine whether that duty had been breached, whether by the board or by individual directors, was described as ‘subjective’.

‘Subjective’ in this context meant that the court would not interfere with the view that directors actually and genuinely held merely because it formed a different objective view of what was really in the best interests of the company. This principle had come to be applied not only to decisions of the board, but also to decisions or acts of individual directors, in deciding whether a particular act was a breach of fiduciary duty.

However, no authority prior to the enactment of the CA 2006 suggested that the court’s respect for the business judgment of directors extended to a case where one director had sought to pursue his or her own judgment as to the best way to promote the company’s interests by a covert strategy, concealed from fellow directors, to pursue an objective that directly conflicted with the business judgment and strategy already agreed by the board as a whole. Such conduct would appear to be obviously disloyal by a fiduciary, contrary to the mode of governance established by the typical company’s constitution, and not acting in good faith.

Counsel for the appellant submitted that the requirement of good faith meant only that the director’s thought process, rather than conduct, fell within the obligation of good faith, but the Supreme Court found there were powerful judicial statements to the contrary.

A duty not to covertly or otherwise to subvert the management of the company’s affairs by the board as a whole was not expressly mentioned in section 172 or elsewhere in Chapter 2 of Part 10 of the 2006 Act, which set out what are described as the general duties of directors. But such a duty was best regarded as part of the s172 general duty, rather than something completely separate from it. This was for a number of reasons:

1. Section 172 might be read as imposing a communal obligation to promote the success of the company on the members of the board.
2.  If the primary responsibility of the board was to be discharged effectively, an individual director was obliged to bring his independent view of the way best to promote the success of the company to the attention of colleagues on the board and must not by covert conduct pursue some other strategy than that decided upon by the board.
3. There were numerous indications in Chapter 2 that it was intended to affirm rather than impede the governance of the company in accordance with its constitution.
4. The concept of assimilating specific duties by directors to make disclosure to the board within what was now the s172 duty was affirmed by authority.
5. It was no answer to a claim of a breach of the s172 that the matter complained of looked more like a breach of one of the other general duties, because the s172 duty was closely related to the other general duties, and a director who acted in breach of the other general duties would also often be in breach of duty under s172 as well. In this case, Costa’s conduct might have been characterised as a breach of both limbs of s171, but that did not exclude it from the ambit of s172.

When read in isolation, said the Supreme Court, it might be suggested that the language about good faith in s172 governed the director’s thinking, rather than his conduct. On this construction, it had been contended by the appellant, that if a director genuinely believed that a certain course for the company to take was best calculated to promote its success, then the director was free (and perhaps obliged) to adopt any course of conduct he or she wished to secure that the company took that course, regardless of whether, objectively speaking, such conduct involved lies, cheating, deception, dishonesty or disloyalty.

The alternative view supported by Saxon Woods was that the requirement for good faith extended not merely to the director’s thinking but also to his or her conduct in the pursuit of achieving what he or she believed was the best course for the company to take. Saxon Woods submitted further that, even though the court would not second guess the director’s genuine view about the best way forward for the company by its own objective assessment, the requirement for good faith did involve at least some objective element if the director’s conduct was challenged in court.

The Supreme Court found that while the rigorous application of grammatical rules might be said to favour the first of those alternatives, the second construction was clearly to be preferred for three main reasons:

1. It was more consistent with a codification of the existing law – according to which the court adopted an objective assessment to the determination of the extent of a fiduciary’s duty of loyalty, and alleged breaches of it.
2. It fitted s172 better into its context as part of Chapter 2, and with its purpose.
3. It strained credulity to think that the first alternative could have been intended, because of its consequences. The notion that the careful and experienced framers of this important codification of directors’ duties thought that a director was required by s172 only to think (and not also to act) in good faith was highly unlikely and would be a recipe for chaos and paralysis in corporate governance, and destructive of the collegiality of the board.

Accordingly, the Supreme Court held that the Court of Appeal was correct to have reversed the trial judge on the question whether a breach by Costa of his duty under s172 was made out on the facts: it clearly had been. However, while the Court of Appeal focused its analysis on a conclusion that Costa had acted dishonestly, applying the objective test laid down in Ivey, Lord Briggs’s analysis proceeded upon a broader basis, concentrating on the requirement for good faith rather than dishonesty on its own, even though the dishonesty question might form part of that wider enquiry.

The test for dishonesty elaborated in Ivey made sense in the context of legal duties that arose irrespective of a pre-existing or separate fiduciary relationship. But where the defendant owed a fiduciary duty of loyalty, the question was whether that duty has been breached, and while dishonesty might be evidence of that, the duty itself supplied the relevant analytical framework; it was unnecessary to elaborate it by reference to Ivey.

The outcome in this case – that there was a breach of s172 by Costa – was the same, so the order made by the Court of Appeal could not be impugned. Lord Briggs preferred to express no view as to the correctness of the Court of Appeal’s second conclusion that Costa had been independently in breach of the s172 duty simply because the shareholders’ agreement had determined the route for SMI’s success. This was unnecessary for the Supreme Court’s resolution of the appeal.

In its judgment, the Court of Appeal had been right to hold that the trial judge had erred in ruling that Costa did not act in breach of his s172 duty to SMI. That was an important matter relevant to the exercise of discretion as to the remedy to be ordered. For that reason, and the additional reasons given by the Court of Appeal’s judgment, the trial judge’s exercise of discretion as to remedy could not stand. The Court of Appeal was therefore required to exercise its discretion as to remedy afresh and was entitled to hold that the appropriate remedy was the unconditional buy-out order which it had made.

The full judgment of the Supreme Court can be accessed at https://supremecourt.uk/uploads/uksc_2025_0149_judgment_068a722678.pdf

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The Sovereign Art Foundation (SAF) has been enjoying a busy few months in Portugal, bringing artists, patrons and families together through art.

We kicked off the season with a special exhibition event in support of O Banquete (1), a new open-call prize for emerging Portuguese artists organised by Galeria NAVE in Lisbon. The event was a wonderful opportunity to connect with the wider creative community, while shining light on some of Portugal’s emerging artistic talent.

As part of the collaboration, one finalist will be awarded direct entry into the 2026 Sovereign Portuguese Art Prize. O Banquete (1) has appointed Howard Bilton, Chairman of both SAF and Sovereign Group, to its judging panel, strengthening ties between the two organisations.

SAF also organised a hands-on workshop for children at the exhibition, which was led by and inspired by the practice of Portuguese artist Sebastião Castelo Lopes, one of the O Banquete (1) shortlisted artists. Participants worked together to create a large-scale installation using words, drawings, symbols and personal stories, exploring how art can be a powerful tool for expression and connection. The room was filled with energy and enthusiasm as participants discovered new ways to tell their stories and connect.

We were also delighted to welcome Iranian artist Sharzadian for a workshop inspired by her mirror-based artworks and the ancient Persian poem The Conference of the Birds. In the poem, a flock of birds embarks on a journey in search of a leader, only to discover that the answers they seek lie within themselves.

Drawing on these themes of reflection and self-discovery, Sharzadian explored how mirrors can encourage us to look more closely at our identities and experiences. Participants then created their own mirrored artworks, reflecting on how we see ourselves and relate to others.

It was a pleasure to welcome internationally acclaimed New Zealand-born an artist, jeweller and taxidermist Julia deVille to Ando Living Rooftop for an intimate evening of conversation and connection. Known for her distinctive works inspired by Victorian traditions, natural history and the decorative arts, Julia shared insights into the themes of beauty, remembrance and the natural world that run throughout her practice.

The audience-led format encouraged thoughtful discussion and offered a rare opportunity to engage directly with the artist. The evening was made possible with the support of Howard’s Folly Wine, and was co-produced by Sassy Women Society and beautifully documented by photographer Zoya Magda.

To close the summer term, we will be hosting a free one-day filmmaking workshop for young people in Lisbon led by Chloe Jenden, the founder of Future Youth Media at the end of July. It is a co-production with filmmaking community initiative O QUADRO and the Sovereign Art Foundation, built specifically for kids who cannot afford access to creative programmes and might not otherwise get the chance to try visual storytelling with a camera in their hands.

This special one-day programme at the Palácio Grilo invites young people into the world of visual storytelling through hands-on filmmaking, encouraging creativity, self-expression and collaboration. We look forward to seeing participants explore new ways of sharing their ideas and experiences through film.
Looking ahead, we are excited to be bringing the 2026 Sovereign Portuguese Students Prize finalists’ exhibition to the Howard’s Folly winery in Estremoz, following a successful exhibition at Espaço JALI in Silves in the Algarve.

Celebrating the creativity, imagination and individuality of young artists from schools throughout Portugal, the exhibition brings together an inspiring collection of 30 shortlisted works and offers a glimpse into the diverse perspectives, ideas and artistic approaches of a new generation.

The exhibition in Estremoz opens on 8 August 2026 and runs through to October, before being presented once more at the Sociedade Nacional de Belas-Artes in Lisbon later in the year. The public vote is already underway. Members of the public are invited to vote for their favourite artwork in person at the exhibition or online as part of the Public Vote Prize.

All the shortlisted works are also available for purchase through the Sovereign Art Foundation’s charity auction. Proceeds from artwork sales support both the young artists themselves and the Foundation, which runs expressive arts programmes in Portugal led by certified art therapists, providing carefully structured sessions that use creative practice to support emotional wellbeing, communication and confidence.

We invite you to discover the finalists’ work, support these talented young artists and help raise funds for SAF Portugal’s charitable programmes here.

Whether through exhibitions, workshops or shared conversations, it has been a joy to see art bring people together and create meaningful experiences for our community. Together, these experiences have been a reminder of the many ways art can spark creativity, encourage self-expression, and foster meaningful connections.

We are grateful to everyone who has supported and participated in these programmes, and we look forward to welcoming more artists, families and supporters as we continue to build opportunities for engagement and communities through art.

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As global geopolitical complexity increases and the investment migration market continues to evolve, internationally mobile individuals, families and businesses are increasingly looking beyond traditional destinations in Europe, the Middle East and North America.

Rising taxation across much of Europe, growing regulatory scrutiny of investment migration programmes and ongoing geopolitical uncertainty are prompting high-net-worth individuals to further diversify their residency and citizenship portfolios. At the same time, growing demand from US citizens and residents seeking international diversification has accelerated interest in the region.

Recognising these shifts, several South American governments now offer accessible residency and citizenship pathways that combine tax efficiency with straightforward immigration processes. These programmes provide practical solutions for those seeking to establish a primary or secondary (‘Plan B’) country of residence that offers significant lifestyle benefits and options to maintain their global mobility and wealth preservation strategies.

The main factors driving internationally mobile individuals, families and businesses to consider South America include:

• Residency-by-Investment and Self-Sufficiency programmes.
• Competitive qualifying requirements.
• Territorial or favourable tax regimes.
• The option to apply for citizenship through naturalisation.
• Proposed Citizenship-by-Investment programmes.
• Strategic geographic positioning.
• Growing economic and political stability across the region.

The Mercosur Advantage

Additional benefits are available to those who evaluate not only individual countries but also the wider benefits of regional integration through the Southern Common Market (Mercosur).

Mercosur’s purpose is to promote free trade within the zone and the fluid movement of goods, people, and currency. Its full members are Argentina, Bolivia, Brazil, Paraguay and Uruguay. Chile, Colombia, Ecuador, Guyana, Panama, Peru and Suriname are associate countries.

Residency or citizenship in a Mercosur country can provide significant advantages, including facilitated movement, settlement rights, and access to broader opportunities across much of South America.

For internationally mobile families and entrepreneurs, therefore, a Mercosur-based strategy can offer a combination of mobility, lifestyle flexibility, tax efficiency and regional access that is becoming increasingly attractive in today’s global environment.

As global mobility priorities continue to evolve, Central and South America countries are positioning themselves as credible alternatives or additional options for those seeking greater diversification, long-term planning opportunities, and freedom of movement outside the traditional European and North American frameworks.

South American alternatives for Global Mobility and Tax Efficiency

Please find below a summary of the qualification requirements and benefits available in Paraguay, Uruguay, Brazil and Argentina. For detailed information and to receive assistance in determining which country and programmes are most suitable for your personal requirements, please contact Ceri Pratley at: cpratley@sovereigngroup.com

1. Paraguay
Paraguay represents one of the most compelling economic stories on the continent, closing 2025 as South America’s fastest-growing economy with a stellar 6.6% GDP expansion and recent investment-grade upgrades from S&P and Moody’s.
Why Paraguay?

• Three-year pathway to citizenship.
• Territorial taxation.
• Low public debt and strong macroeconomic stability.
• Abundant, low-cost hydroelectric power.
• Competitive labour costs.
• One of the lowest costs of living in South America.

Paraguay Investor Pass – Qualification Options

• USD200,000 qualifying real estate investment (upon downpayment of 30%).
• USD200,000 investment into companies listed on the Asunción Stock Exchange.
• USD150,000 qualifying tourism sector investment.
• USD70,000 Sistema Unificado de Apertura y Cierre de Empresas (SAUCE) business establishment
• USD40,000 qualifying audiovisual and film production investment (donation).

2. Uruguay

Often referred to as the ‘Switzerland of South America’, Uruguay is widely recognised for its political stability, strong institutions, legal certainty and exceptional quality of life. It remains one of the region’s most established destinations for long-term residence, wealth preservation, and ease of relocation.

Why Uruguay?

• Stable democracy with strong rule of law and institutional certainty.
• High-quality healthcare and education systems.
• Safe, high-quality living environment with strong social stability.
• Attractive long-term base for families, retirees, and globally mobile individuals.
• Citizenship eligibility after five years reduced to three years for couples and families.

Uruguay Permanent Residency Programme

To secure permanent residency in Uruguay through independent means or retirement, applicants must demonstrate a stable, regular income (e.g. dividend, pension or investment income) of at least USD1,500 per month for a single applicant.

Uruguay Tax Residency Programme

Uruguay’s tax residency programme is highly sought after because it offers a source-based taxation system and an extended ‘tax holiday’ on passive foreign-sourced income. New tax residents can elect to pay zero tax on foreign capital gains and yields for a up to 11 years.

To qualify individuals must meet one of the following three qualifying pathways:

• Physical Presence: spend more than 183 days a year in Uruguay, with no investment required.
• Real Estate: make a minimum real estate investment of USD2 million and spend at least 60 days per year in the country.
• Innovation Fund: contribute USD100,000 annually to the National Innovation Fund for 11 consecutive years.

3. Brazil

Brazil offers one of the world’s most accessible residency-by-investment programmes, combining low entry thresholds with access to Latin America’s largest economy. From Rio de Janeiro’s coastline to São Paulo’s financial centre and the rapidly developing Northeast, Brazil provides significant lifestyle benefits and the potential for long-term market scale.

Why Brazil?

• Latin America’s largest economy.
• High-quality lifestyle across major cities and coastal regions.
• Strong private healthcare and education systems.
• Permanent residency granted upon approval (temporary for real estate investments).
• Approximately 14 days of physical presence required each year.
• Citizenship eligibility after four years of permanent residency (subject to additional qualification requirements).

Brazil Residency-by-Investment

• BRL1 million (c. USD200,000) minimum real estate investment in urban properties in the South, Southeast and Midwest regions. This is reduced to BRL700,000 for properties in the North and Northeast regions. Grants a two-year temporary residence permit (VITEM), renewable for a further two years provided the investment remains active.
• BRL500,000 minimum investment in a new or existing Brazilian company, subject to approval of a business plan demonstrating creation at least 10 jobs or income potential. Permanent Investor Visa (VIPER) issued immediately upon approval.
• BRL150,000 minimum start-up investment for projects in technology, science or other priority innovation areas, subject to approval of a business plan demonstrating economic impact and job creation potential of at least 10 jobs. Permanent Investor Visa (VIPER) issued immediately upon approval.

After four years of lawful temporary residence with the investment active, VITEM holders can apply for the VIPER permanent investor visa, which is granted provided the qualifying investment has been maintained throughout.

After four years of legal residence in Brazil with the investment active, VIPER holders become eligible to apply for Brazilian citizenship by naturalisation.

4. Argentina

Internationally mobile individuals and families choose Argentina as their primary or alternative country of residence due to its rich, dynamic culture, highly affordable healthcare, spectacular landscapes ranging from the Andes to Patagonia, and a deeply communal, sociable way of life.

Argentina Rentista Visa

The Argentina Rentista Visa grants a renewable one-year temporary residency to those with stable and verifiable passive income from outside Argentina. Applicants must prove a monthly passive income of at least five times the Argentine minimum wage – circa USD1,400 to USD2,000 – that is derived from pensions, rental properties, dividends or annuities.

After two years of continuous residency, applicants are eligible to apply for citizenship through naturalisation, additional qualification requirements apply.

Argentine Citizenship-by-Investment

Argentina is currently developing what is expected to become South America’s first direct Citizenship-by-Investment programme. The proposed framework is expected to bypass traditional residency requirements and provide one of the strongest passports in Latin America.

Why Argentinian Citizenship?

• A G20 member.
• MERCOSUR settlement rights across South America.
• Visa-free or visa-on-arrival access to more than 160 countries.
• Dual citizenship permitted.
• Political stability and investor confidence.
• Tax advantages for non-residents.
• Large-scale foreign investment incentive frameworks (RIGI) targeting the mining, energy and tech sectors.
• An abundance of natural resources.

Proposed Citizenship-by-Investment Programme

Current proposals indicate that the qualification requirements under consideration will be as follows:

1. A non-refundable contribution of USD500,000 to the Argentine National Treasury; or
2. A USD1 million subscription of Argentine sovereign bonds denominated in US dollars and issued specifically for this purpose by the Secretariat of Finance.

A summary of the programme qualification requirements, processes and fees will be published once they have been confirmed and passed into law.

International Mobility, Private Client and Corporate Services

Sovereign works closely with applicants through every stage of the planning and implementation process. When combined and managed correctly, the following Sovereign Group services enable individuals and families to develop and implement a comprehensive, flexible and tax efficient international Mobility, Private Client and Corporate Service strategy:

• International residency, tax residency and citizenship planning.
• International corporate establishment and management.
• Personal and corporate banking.
• Tax Planning.
• Trusts and foundations.
• Estate and succession planning.
• International retirement plans.
• Wealth management.
• International life and medical insurances.
• Yacht and Aircraft registration and management services.

Strategies are developed and implemented in accordance with each client’s specific needs. Comprehensive quotations will be provided during the planning process.

Contact Sovereign for further information

The Sovereign Group’s global network of offices, experienced client advisers and professional services partners mean that we are well-placed to assist, advise and support individuals, families, businesses and their advisers to unlock the potential of benefits of alternative residence or citizenship strategies, as well as to plan, implement and manage their assets.

For further information or to discuss your or your clients’ requirements, please contact Ceri Pratley, Head of Residency & Citizenship Services.

The post South America: emerging alternatives for Global Mobility and Tax Efficiency appeared first on The Sovereign Group.

Businesses entering Qatar generally have a choice between establishing through the Ministry of Commerce & Industry (Mainland), the Qatar Financial Centre (QFC), the Qatar Free Zones (QFZ), operating via a branch, or incorporating another suitable legal structure, depending on their business activities and objectives. For many investors, the  Limited Liability Company (LLC) remains the default option where the intention is to build a long-term presence in the domestic market.

It is a familiar and well-established corporate vehicle that allows businesses to contract directly with customers in Qatar, employ staff and conduct licensed activities through a locally incorporated entity. While the most appropriate structure will depend on the proposed activity and ownership objectives, the LLC is often the starting point when looking beyond a representative presence or project-specific arrangement.

What is a Qatar LLC?

A Qatar LLC is a company incorporated under Qatari Commercial Companies Law No. 11 of 2015, with its own separate legal personality. In practical terms, the company exists independently from the people who own it. It can enter into contracts and take on obligations in its own name.

That separation is one of the reasons the LLC remains widely used. The business operates through a recognised legal framework and the rights and responsibilities arising from its activities belong to the company itself rather than directly to its shareholders.

For most commercial activities, the LLC is a familiar and workable structure. Certain sectors remain subject to additional regulation or licensing requirements, but the underlying concept is straightforward.

Limited liability

Shareholders in an Limited Liability Company (LLC) are generally liable only up to the amount they have invested in the company.

For many business owners, this is an important consideration. The company’s obligations do not automatically become personal obligations of its shareholders simply because they own the business and the investor’s personal assets remain outside of the liability scope. If the company encounters financial difficulties, shareholders are not ordinarily exposed beyond their agreed contribution.

That protection is not absolute. Directors and managers still need to ensure that the company is managed properly and complies with applicable legal requirements. Even so, the separation between the company and its owners remains one of the defining features of the LLC structure.

The LLC can typically have between 1 to 50 shareholders and there is no statutory minimum capital for an LLC under current MOCI guidance.

Foreign ownership considerations

Foreign ownership rules in Qatar have evolved significantly in recent years thanks to Foreign Investment Law No. (1) of 2019.

Historically, foreign investors establishing an LLC were generally required to partner with a Qatari national shareholder. Legislative reforms have since expanded the circumstances to permit foreign investors to qualify for full ownership of a company. Since this change, business investors have been far more interested in Qatar as a business destination.

The position is not uniform across all activities though. Eligibility for foreign ownership depends on the nature of the proposed business and, in some cases, approvals from the relevant authorities. For that reason, ownership requirements should be reviewed as part of the initial structuring exercise rather than assumed once the incorporation process has started. What applies to one activity may not necessarily apply to another.

Understanding these points early can save time and avoid the need to revisit the proposed structure further down the line.

Carrying on business in Qatar

For businesses intending to operate within the Qatari market, the LLC often provides a practical route through which to conduct day-to-day activities.

Subject to obtaining the appropriate licences and registrations, a Qatar LLC can trade with local customers, enter into commercial arrangements and employ staff directly. This distinguishes it from structures that may be more appropriate for limited activities or a defined project.

Businesses that expect to establish an ongoing presence in Qatar often prefer the certainty of operating through a locally incorporated entity rather than relying on a temporary arrangement.

LLC type structures are available through different establishment authorities in Qatar, including the Ministry of Commerce & Industry (Mainland), the Qatar Financial Centre (QFC), and the Qatar Free Zones (QFZ), each offering a distinct legal and regulatory framework depending on the nature of the proposed business.

Governance and management

The governance framework of a Qatar LLC is generally familiar to international investors.

The company’s constitutional documents set out how it will operate and define the relationship between its shareholders. Managers are appointed to oversee the day-to-day running of the business and their authority can be clearly documented from the outset.

This can be particularly useful where there is more than one investor involved. Taking the time to agree how decisions will be made at the establishment stage often avoids unnecessary disagreements later on.

Regulatory requirements

LLC company formation is only one part of the process. Once established, an LLC is subject to ongoing obligations that need to be addressed as part of normal business operations.

Depending on the nature of the activities undertaken, this may involve maintaining corporate records, renewing commercial registrations and meeting applicable filing requirements. Certain sectors may also be subject to additional conditions imposed by the relevant authorities.

These obligations are not unusual, but they should not be treated as an afterthought. Understanding what is required from the outset makes it easier to plan for the practical aspects of operating the business.

Is a Qatar LLC the right structure?

There is no single answer. The right structure will depend on what the business is trying to achieve and how it intends to operate in Qatar.

In some cases, a free zone entity may be more suitable. In others, a branch structure may achieve the desired commercial outcome. Businesses intending to establish a continuing presence in Qatar, employ personnel locally and undertake activities within the domestic market will often find that an LLC deserves careful consideration.

The Qatar LLC has been used by local and international businesses for many years. It is a familiar structure that remains suitable for a broad range of commercial activities and is often the benchmark against which other establishment options are assessed.

How Sovereign Group can help

Sovereign assists clients with establishing business entities in Qatar. We advise on the appropriate company structure, including setup of LLC and choosing the proposed business activities. We coordinate the incorporation process with the relevant authorities.

Once the company has been established, we can also provide ongoing corporate administration support where required. The focus is on ensuring that the structure continues to support the commercial objectives of the business as it develops.

The post Why choose a Qatar LLC structure for your business appeared first on The Sovereign Group.

The UK Insolvency Service reported on 9 June that it had shut down two more companies as part of its campaign against unregulated firms that have been exploiting the Companies House register to provide more than 12,000 overseas clients with a false UK business presence.

UK Sinosia Business Ltd and Longshine Overseas Ltd, which were both wound up in the High Court in London on 2 June, had registered more than 4,300 UK companies for predominantly China-based clients, diverting all fees to Chinese bank accounts, and providing no evidence that they had carried out the required money laundering checks.

Foreign companies register on Companies House because it provides respectability and legitimacy and potentially opens up new markets and investment. However, companies that have no presence in the UK undermine economic confidence and are at high risk of being used as vehicles for fraud and money laundering.

The UK’s Economic Crime and Corporate Transparency Act 2023 (ECCTA) gave the Insolvency Service a range of tools to tackle corporate abuse and clean up the register. The cases were referred by Companies House, reflecting the two agencies’ close collaboration in cracking down on abuse of the UK company register.

UK Sinosia Business was incorporated in December 2020, with Longshine Overseas following in October 2021. Both companies charged overseas clients to register UK companies, provide registered office addresses and act as company secretaries. Both companies had no presence in the UK and were based in China.

Firms can act as a ‘broker’ for companies and provide registered UK addresses via Companies House. However, there is a legal requirement to register with HM Revenue & Customs (HMRC) as a ‘Trust or Company Service Provider’ (TCSP). UK Sinosia Business’s application was rejected by HMRC and Longshine Overseas failed to register, with no evidence of carrying out anti-money laundering checks.

UK Sinosia Business provided a registered office address to at least 2,597 client companies, while Longshine Overseas acted as company secretary to a further 1,746 and appeared to be squatting in a genuine Fleet Street address without the landlord’s knowledge or consent. They also used a single apartment in London as the registered office for 2,873 companies.

Insolvency Service investigators discovered that client fees were being paid into personal or third-party bank accounts in China and the listed director was on the record admitting that UK Sinosia Business and Longshine Overseas were essentially ‘one company’, with the same operating mode, structure and clients. She further claimed that UK Sinosia Business was registered as a TCSP, but this had been granted to a separate Hong Kong company with no legal standing in the UK.

Both companies were in reality under the control of a single Chinese national up until November 2024. His identity had not been disclosed on the Companies House register, and he denied all knowledge of the companies. But records showed he was proprietor of the leasehold address and had a signed rental agreement with UK Sinosia Business.

Following their winding up, continued enforcement action is being taken by Companies House in respect of the client companies, which were registered as trading in sectors ranging from the wholesale of alcohol to the supply of computer equipment. The clients were predominantly based in China.

The Insolvency Service has now taken action against five companies this year, which had registered more than 12,000 businesses in the UK, mostly from China. Three companies were wound up in January after the Insolvency Service discovered that they had registered more than 8,500 companies to a single address in South Croydon alone.

“Unregulated companies are bad for the economy. Public confidence in the Companies House register depends on the information on it being accurate,” said Dave Magrath, Director of Investigation Services at the Insolvency Service.

“We won’t stand for a business model based on abusing the Companies House register which damages consumer confidence and presents real risks to our economy. We’re working with our partners across government to tackle these rogue entities and protect the UK’s reputation as a trusted place to do business.”

The impact of the ECCTA has been significant. Some 151,000 company addresses have been removed from the Companies House register, almost four million individuals have verified their identities and linked their appointments, and collaboration with law enforcement partners has seen seizure of millions in suspected criminal proceeds.

Companies House is now on track to deliver the next phase of reforms. Further identity verification rollout, enhanced transparency of the Register of Overseas Entities, and a more systematic, intelligence-led approach to enforcement are all underway. It said the next phase will ensure action remains targeted, proportionate and effective, supporting legitimate businesses while targeting those who seek to abuse the system.

The post UK Insolvency Service continues crackdown on firms exploiting Companies House register appeared first on The Sovereign Group.

The UK government signed the historic UK-EU Treaty on Gibraltar in Brussels on 14 July. The Treaty secures border fluidity for people and goods crossing the Gibraltar-Spain border, delivers economic and trade certainty for people and businesses in Gibraltar, while maintaining the full protections of British sovereignty.

From 15 July, the treaty eliminates border controls and customs checks to create a fluid frontier, allowing for the immediate removal of the border fence that has physically separated Spain from Gibraltar since 1908. This will particularly benefit the ‘frontier workers’ who cross into Gibraltar from Spain on a daily basis.

Under the treaty, Gibraltar will be connected to the Schengen Area, without becoming part of it. Persons entering Gibraltar by port or airport will face immigration checks by Gibraltarian officials and then a Schengen check, carried out by the Spanish authorities on behalf of the Schengen Area. This includes registration under the EU’s new Entry/Exit System (EES) where it applies. This will ensure that people cleared at the airport will then be able to travel freely between Gibraltar, Spain and the wider Schengen Area.

The Agreement includes provisions on visa-free travel, residence rights for persons resident in Gibraltar, and coordinated procedures for the approval of new or renewed residence permits. These provisions allow the relevant authorities in Spain to ensure that residence permits that will allow access to the Schengen area are granted in line with key provisions of EU law designed to protect public safety and security.

Gibraltar residence will be evidenced by an ID card or residence permit. Gibraltar residents are exempt from passport control and both the Entry/Exit System (EES) and the obligation to register under the European Travel Information & Authorisation System (ETIAS). Gibraltar residents also have the right to transit through Schengen EU Member States to return to Gibraltar unless specifically excluded.

The new Treaty establishes a bespoke customs model between Gibraltar and the EU, removing tariffs, duties and quotas on goods moving between them. It delivers enhancements to Gibraltar’s existing indirect taxation system that brings certain rates closer to those in the EU, without adopting VAT or any form of sales tax.

Gibraltar’s current import duty regime will be replaced by a new Transaction Tax (TT), which will be applied initially at a transitional standard rate of 15%. This rate will be increased to 16% for year two and for year three will be aligned to the lowest standard rate of VAT being applied in the EU, which is currently 17%.

The TT will be levied at the point of importation or manufacture, or when goods are brought out of bond, rather than applied at the point of sale. The tax rate will be applied to the customs value of the goods. All revenue from the TT and excise duty will be charged in Gibraltar.

A reduced rate of 5% and a super reduced rate of 0% will apply to certain goods as listed in Annex III of the EU VAT Directive. The choice will be determined by that list. Bunkering fuel, ship supplies and goods that are not to be put up for sale in Gibraltar will be exempt from the TT and from excise duties.

If goods are imported from the UK that do not meet the UK-origin rules contained in the UK-EU Trade & Cooperation Agreement, EU Common External Tariff rates will be applied. The TT would also be applied if the goods are to be placed on the market in Gibraltar.

To achieve fluid movement across the border operationally, the majority of goods destined for Gibraltar will be cleared by EU customs offices in Spain so they can enter Gibraltar without further checks.

The Treaty defines the rights of cross-border workers, who live in Spain and work in Gibraltar or vice versa, to provide a secure framework for employment, supporting the integrated labour market between Gibraltar and the surrounding region. It provides mechanisms for social security coordination so that contributions, entitlements and benefits can be administered without disruption.

Under Article 291, frontier workers are defined as either EU citizens legally residing in the Kingdom of Spain or UK nationals legally residing in Gibraltar who pursue an economic activity as an employed person (or as a self-employed person under the respective UK and Spanish laws) either in Gibraltar or in Spain and who return at least once a week to Spain or to Gibraltar, respectively.

Frontier workers’ rights are also extended to their family members – spouses, registered partners, dependant children under 21, and dependant direct relatives – provided they also legally reside in Spain or Gibraltar respectively.

There is no direct application of EU law to Gibraltar through the Treaty or enforcement role for the Court of Justice of the EU in Gibraltar. It contains provisions confirming how Gibraltar’s domestic legal system will incorporate EU law where alignment is required and confirms it will be enforced by Gibraltar’s own authorities and courts.

To enable the necessary free flow of personal data between Gibraltar and the EU, the Treaty contains provisions of the Treaty operationally viable, without the need for a data ‘adequacy’ decision for Gibraltar, in return for Gibraltar’s continued alignment with key EU data protection rules.

The Treaty also includes commitments to ensure a level playing field as regards State aid, tax transparency, labour standards, trade, sustainable development, anti-money laundering and transport. It further provides for adaptation to EU environmental law to ensure compliance with EU environmental standards and for the creation of a joint environmental impact assessment mechanism.

The Treaty was signed in the presence of the Chief Minister of Gibraltar Fabian Picardo and the Spanish Foreign Minister Jose Manuel Albares and had the unanimous backing of the Gibraltar Parliament. The government of Gibraltar was at the heart of negotiations throughout.

Gibraltar was left out of the UK-EU Trade & Cooperation Agreement following Brexit, creating the prospect of a ‘hard border’ for the 15,000 people – over half of Gibraltar’s workforce – who cross the land border between Spain and Gibraltar every day.

The new Treaty delivers practical solutions to avoid the need for onerous checks and lengthy delays at the border, providing certainty for people and businesses in Gibraltar, and opens new opportunities for flights and economic growth. It also safeguards British sovereignty and protects the autonomous operation of UK military facilities.

“This historic agreement delivers certainty for the people and businesses of Gibraltar, protects British sovereignty, our military facilities, and has the full backing of the government and parliament of Gibraltar,” said UK Minister for Europe, North America and Overseas Territories Stephen Doughty.

“Gibraltar has been at the heart of these negotiations throughout. A cherished part of the British family, its economic future and thousands of jobs depended on finding a practical solution to the challenges created by Brexit. Our support for Gibraltar remains as solid as the Rock. This agreement opens a new chapter with the EU and Spain, supporting jobs, growth and prosperity on both sides of the border.”

The post UK signs historic treaty with EU to bring down border fence between Gibraltar and Spain appeared first on The Sovereign Group.

Workplace pensions are now a legal requirement in Gibraltar, but many small business owners are not sure what one actually costs.

That is because providers do not always present their fees in the same way. Some bundle costs together, while others charge certain items separately, making it difficult to compare like for like.

The good news is that once you know what to look for, understanding the costs is much simpler.

Here is a straightforward guide to the three main cost areas, the small print worth checking, and a worked example of what a workplace pension could look like in practice.

The three costs to budget for

The first is employer contributions, which is the biggest cost and is set by law. Employers and employees must each contribute a minimum of 2% of gross earnings into the workplace pension. Employers can choose to contribute more if they wish to offer a more generous employee benefit, but 2% is the legal minimum.

The second is the implementation fee, a one-off fee to establish the scheme, onboard employees and ensure everything is set up correctly from day one. Because it is a single, upfront cost, it is usually one of the easiest fees to compare between providers.

The third is ongoing administration. Once a scheme is up and running, there will usually be an annual fee to cover its ongoing administration. Depending on the provider, this may include Trustee duties, scheme administration, record-keeping, reporting, member support and access to financial advisers. This is also the area where providers differ the most, so it is worth asking exactly what is included and how the fee is calculated.

The small print worth checking

A few extra costs can sit outside the three main fees above, depending on the provider and the type of scheme. These might include GFSC regulatory fees, financial statements or scheme wind-up costs. Not every scheme incurs these charges, and some providers include certain items within their quoted fee while others charge them separately.

A worked example

Consider a business with five employees, each earning £30,000 a year, choosing Sovereign’s Foundation Plan, designed for employers looking for a straightforward, compliant workplace pension.

Employer contributions represent the legal minimum and will be the same regardless of which provider is chosen. On a total annual payroll of £150,000, the employer contribution at 2% comes to £3,000 a year, or £250 a month.

To establish the Sovereign Foundation Plan, there is a one-off implementation fee of £750. Employers who are members of the Gibraltar Federation of Small Businesses (GFSB), use EasyPay, or participate in Sovereign’s Discount Card Scheme receive a 30% discount, reducing this fee to £525.

The Foundation Plan has an annual administration fee of 1% of Assets Under Administration (AUA). Rather than being invoiced separately to the employer, this fee is deducted quarterly from pension accounts, helping spread any significant changes in the investment performance of the funds. It covers Trustee obligations, annual scheme administration and access to Sovereign Wealth services as the appointed wealth advisers to the Trustee.

As with all workplace pension schemes, future regulatory fees may apply. Where applicable, these are invoiced directly by, and payable to, the Gibraltar Financial Services Commission (GFSC).

At a glance

Costs for a business with 5 employees earning £30,000 a year and opting for the Sovereign Foundation Plan:

Notice that only one of these costs, the employer contribution, is fixed by law. Everything else depends on how a provider structures its fees and what is included in the price quoted. That is why it is important to compare the full cost of running a scheme, not just the headline figure.

Questions worth asking before choosing a provider

Before choosing a provider, it is worth asking what is included in the annual administration fee, and whether there are any regulatory or statutory charges billed separately. It is also worth understanding how the annual fee is calculated, whether fees will change as the scheme grows, and what other costs could arise during the lifetime of the scheme. Finally, it is reasonable to ask a provider for an estimate of what the scheme is likely to cost over the next five or ten years. A provider that is transparent about its pricing should be happy to answer each of these questions clearly.

The bottom line

Understanding what is included, what is charged separately and how fees are calculated will help employers compare providers fairly and avoid surprises later on.

At Sovereign transparency is just as important as value. Our team of experts are happy to explain every part of its pricing, answer any questions employers may have and provide a personalised cost projection based on an employer’s own workforce, so employers know exactly what to expect, both now and over the years ahead.

The post What does a workplace pension really cost your business? appeared first on The Sovereign Group.

Contributing Author: Sameer Ansari – Senior Client Accountant

The UAE continues to strengthen its position as one of the world’s leading jurisdictions for private wealth structuring, succession planning, and family governance. With the UAE Federal Tax Authority (FTA) recently issuing an updated Corporate Tax Guide on the taxation of Family Foundations, wealthy families and their advisors now have greater clarity on how these structures will be treated under the UAE Corporate Tax regime.

While the new guidance does not fundamentally change the existing framework, it addresses several practical questions that have emerged since the introduction of Corporate Tax and provides important insights for families using foundations, trusts, holding companies, and family offices as part of their long-term wealth planning strategy.

Greater Certainty for Family Wealth Structures

Family Foundations have become an increasingly popular vehicle for preserving wealth across generations, protecting assets, and establishing robust governance arrangements. The latest guidance demonstrates the FTA’s growing understanding of the complexities often found within modern family wealth structures.

One of the most welcome developments is the additional clarity provided on trusts and similar arrangements.

The FTA has confirmed that certain trusts and similar contractual arrangements may qualify for tax-transparent treatment where the relevant conditions under Article 17 are met, reinforcing the viability of trust-based succession planning structures within the UAE framework. The June 2026 guidance further refines the description of the roles of settlors, trustees, and beneficiaries without altering the core tax treatment.”

At the same time, the guidance draws a clear distinction between Family Foundations and ordinary limited liability companies. While LLCs remain useful holding vehicles, the FTA has confirmed that they cannot themselves be treated as Family Foundations. This distinction is important for families reviewing older structures that may have been established before Family Foundations became widely available in the UAE.

The Reality of Modern Family Structures

Today’s family wealth structures rarely consist of a single entity. More often, they involve multiple holding companies, investment vehicles, trusts, and operating businesses spread across various jurisdictions.

Recognising this reality, the FTA has expanded its guidance on multi-tier ownership arrangements and, importantly, provided confirmation that qualifying tax-transparent treatment can extend through multiple layers of entities. However, this benefit is subject to strict conditions.

The concept of an “uninterrupted chain” now sits at the centre of the analysis. In simple terms, every entity between the Family Foundation and the underlying asset-holding company must itself qualify for tax-transparent treatment. A single non-qualifying entity can disrupt the chain and potentially affect the tax status of entities below it. Each entity in the chain must separately meet the conditions required for a foundation to be tax transparent. Entities in the chain do not need identical financial years but If conditions fail mid-period, transparency is lost from the start of that period for the entity and its subsidiaries.

For families with complex structures accumulated over many years, this may be an opportune moment to undertake a comprehensive review to ensure that existing arrangements continue to achieve the intended tax and succession outcomes.

The FTA has also acknowledged a practical reality often seen in larger family groups: ownership shared among multiple Family Foundations. The guidance confirms that a company may still qualify for tax-transparent treatment where ownership is split between qualifying Family Foundations, provided the ownership and control requirements are satisfied.

Transferring Assets into a Family Foundation

Another area that has attracted considerable attention is the transfer of assets into Family Foundations.

Founders are frequently concerned about whether moving investment portfolios, real estate, or other personal assets into a Family Foundation could trigger an unintended tax charge.

The updated guidance provides welcome comfort by confirming that where an individual transfers personal investments or real estate investment income into a Family Foundation, there should generally be no UAE Corporate Tax consequences for the founder.

This clarification will be particularly relevant for entrepreneurs and business owners who are considering formalising their succession plans through the use of a foundation structure.

Corporate founders, however, should proceed more carefully. Transfers by corporate entities (which are Taxable Persons) may give rise to taxable gains or losses depending on the circumstances. Where the transfer is between related parties, it must be conducted at arm’s length terms in accordance with transfer pricing rules.

A Useful Clarification on Tax Status Changes

One of the more technical but highly significant points addressed by the FTA concerns companies entering or leaving Family Foundation structures.

The guidance confirms that where a company changes its tax status—for example, becoming tax transparent after being acquired by a Family Foundation—there is no corresponding reset of the tax cost of its underlying assets.

Although this may appear to be a minor technical point, it removes a layer of uncertainty that could otherwise have complicated future disposals and tax calculations.

For families engaged in long-term estate and succession planning, predictability is often just as valuable as tax efficiency.

Importantly, pre-existing entities acquired by a Family Foundation can subsequently qualify for transparent treatment (there is no requirement that they have been wholly owned from inception), provided all conditions are met going forward. Changes in ownership that cause an entity to enter or exit transparent status do not trigger a deemed disposal or reacquisition of assets.

What About Family Offices?

Family offices continue to play an increasingly important role within the UAE’s private wealth ecosystem, particularly in jurisdictions such as DIFC and ADGM.

The FTA has confirmed that family offices generally should not expect to qualify for the same tax-transparent treatment available to Family Foundations. This is largely because family offices typically carry on commercial activities and generate fee income. As a result, they remain subject to Corporate Tax in the ordinary course.

Single Family Offices managing assets solely for one family are also unlikely to meet the regulatory oversight requirements needed to access the 0% Corporate Tax rate on Qualifying Income in Free Zones. Extending services to third parties may recharacterize the entity as a Multi-Family Office and alter its licensing status. Arm’s length transfer pricing rules apply to any services provided to related parties or Connected Persons.

The latest FTA guidance reflects the continuing evolution of the UAE’s private wealth landscape. More importantly, it demonstrates a willingness by the authorities to provide practical clarification on issues that matter to families, founders, trustees, and family offices.

For many families, the publication serves as a timely reminder that succession planning, governance, and tax structuring should not be viewed as static exercises. As regulations continue to evolve, periodic reviews of existing structures remain essential.

The UAE remains one of the most attractive jurisdictions globally for family wealth planning. However, the greatest benefits are typically achieved when legal, governance, and tax considerations are considered together as part of a broader long-term strategy designed to preserve wealth across generations.

Why Family Foundations Continue to Attract Private Wealth & Corporate Tax

One of the most attractive features of a UAE Family Foundation is the possibility of achieving tax transparency under Article 17 of the UAE Corporate Tax Law.

Contrary to a common misconception, a Family Foundation is not automatically exempt from Corporate Tax. As a separate legal person, a foundation would ordinarily fall within the scope of Corporate Tax in the same way as any other juridical person. However, where the foundation satisfies the requirements of Article 17 and receives approval from the Federal Tax Authority (FTA), it may elect to be treated as  a tax transparent foundation for UAE Corporate Tax purposes. In practice, this means that the foundation itself is treated as fiscally transparent and is generally not subject to Corporate Tax in its own right. Instead, the underlying assets and income are effectively looked through to the founder and beneficiaries.

To qualify for this treatment, the Family Foundation must satisfy several key conditions on an ongoing basis.

First, the foundation must be established for the benefit of identified or identifiable natural persons, a public benefit entity, or both. This allows structures to benefit current and future generations of a family while also accommodating charitable objectives.

Second, its principal activity must be limited to receiving, holding, investing, preserving, distributing, or otherwise managing assets and wealth associated with savings and investments. The regime is intended for wealth preservation vehicles rather than operating businesses.

Third, the foundation must not conduct activities that would constitute a business if those activities were carried out directly by the founder or beneficiaries. This is a critical requirement and one that many families should review carefully, particularly where operating companies sit alongside investment assets within the same structure.

Fourth, the principal purpose of the structure must not be the avoidance of Corporate Tax. The FTA has made clear that Family Foundations are intended to facilitate genuine succession planning, asset protection, family governance, and long-term wealth preservation rather than artificial tax planning arrangements.

Finally, where public benefit entities are included as beneficiaries, additional distribution requirements must also be satisfied.

For many entrepreneurial families, these requirements are not particularly restrictive. In fact, most properly structured Family Foundations established for succession planning, asset protection, family governance, and investment holding purposes will naturally align with the legislative intent behind Article 17.

The result is a powerful planning tool that allows families to centralise ownership of investments, real estate, operating businesses, and other strategic assets within a governance framework designed to preserve wealth across generations while maintaining tax efficiency for the UAE Corporate Tax regime.

Sovereign Group is licensed to establish and administer Foundations in both DIFC and ADGM and provides comprehensive private client services for high-net-worth individuals, family businesses, and family offices. Our multidisciplinary team assists clients with Foundation formation, ongoing administration, governance arrangements, accounting and bookkeeping services, Corporate Tax registration and filings, economic substance compliance, and broader cross-border wealth structuring matters. By combining CSP, corporate, accounting under one roof, we help families create robust structures designed to protect and preserve wealth for future generations.

The post UAE Family Foundations: Key Tax Clarifications Every Family Office Should Understand appeared first on The Sovereign Group.

Any business operating in Saudi Arabia will quickly encounter two terms that are often used interchangeably: Saudization and Nitaqat. The two terms are closely linked, but in fact refer to different aspects of the same framework.

Understanding the distinction is important because these rules influence recruitment decisions, expansion plans and, in some cases, a company’s ability to access essential Saudi government services and government contracts.

The framework has evolved considerably in recent years. The latest phase of the Developed Nitaqat programme, introduced in 2026, signals a continued move towards sector-specific localisation requirements and closer monitoring of compliance. For businesses entering the Saudi market, workforce planning is no longer something that can be addressed after incorporation. It needs to be considered from the outset.

Saudization and Nitaqat, what is the difference?

Saudization is the policy objective. It refers to the Kingdom’s broader strategy of increasing the participation of Saudi nationals and Saudi employees in the private sector workforce as part of the Vision 2030 agenda.

Nitaqat is the mechanism used to put that policy into practice. It classifies private sector establishments according to how effectively they meet their localisation requirements.

The distinction is simple. Saudization sets the direction of travel. Nitaqat measures where each business sits against the requirements that apply to it.

For employers, it is the Nitaqat classification that has the more immediate practical impact.

How does the Nitaqat system work?

Under the Nitaqat framework, companies are grouped according to their economic activity and workforce profile. They are then assessed against the applicable Saudization requirements and assigned a classification.

The best-performing establishments fall within the Platinum category, followed by the Green bands while businesses that fail to meet the minimum requirements may find themselves classified as Red.

This classification influences a company’s ability to access certain labour-related services. A business with a stronger classification will generally encounter fewer restrictions when dealing with employment administration. Falling below the required threshold can have operational consequences that extend well beyond recruitment.

The important point is that there is no single percentage that applies to every business. The required level of Saudization depends on what the company does and, increasingly, the professions it employs.

What changed in 2026?

Saudi Arabia’s Ministry of Human Resources and Social Development has launched a new three-year phase of the Developed Nitaqat programme, with the stated objective of creating more than 340,000 additional jobs for Saudi nationals in the private sector.

This latest phase builds on earlier reforms rather than replacing them entirely. The underlying framework remains in place, but the direction is clear. The authorities continue to refine localisation targets and expand profession-specific requirements across different sectors.

For employers, this means compliance has become more dynamic. Businesses that were comfortably meeting requirements a year ago may find that their position has changed as thresholds evolve.

Reviewing workforce composition periodically is therefore becoming just as important as monitoring financial or operational performance.

Profession-specific localisation

One of the most noticeable developments has been the expansion of profession-based Saudization requirements.

In practice, this means that overall compliance may not always be enough. A company could satisfy its headline Saudization ratio while still being exposed because a particular department or profession falls below the required threshold.

Recent measures have affected a range of sectors and functions, including marketing, sales, engineering, procurement and administrative support roles. The implementation dates and required percentages vary depending on the activity concerned.

For that reason, businesses should avoid relying on general assumptions about their obligations. The detail matters.

Why does Nitaqat compliance matter?

Nitaqat is often viewed simply as an HR issue. In reality, its implications can be much wider.

A company’s classification can influence its access to employment-related services and affect routine administrative processes linked to workforce management. Where compliance issues arise, they can quickly move beyond the HR department and become an operational concern.

That is why many businesses now treat Saudization compliance as part of their broader planning process rather than a standalone compliance exercise.

Addressing localisation requirements early is usually easier than trying to rectify a shortfall once restrictions begin to affect day-to-day operations.

What should foreign companies consider?

For foreign investors entering Saudi Arabia, workforce planning should sit alongside decisions around licensing, ownership structures and business activities.

The activities selected during the establishment process can influence the localisation requirements that ultimately apply to the business. Equally, recruitment strategies developed elsewhere in the region may not translate directly to the Saudi market.

This does not mean that foreign companies cannot build international teams. Saudi Arabia continues to rely on expatriate expertise across many sectors but the objective is to ensure that opportunities for Saudi nationals form part of that workforce strategy.

Businesses that understand this balance from the beginning are generally better placed to adapt as the regulatory framework develops.

Keeping pace with change

One of the challenges with Saudization is that it continues to evolve.

New profession-specific decisions can be introduced with relatively short implementation periods. Guidance is updated and thresholds may change as the authorities respond to labour market conditions and broader economic objectives.

As a result, compliance is increasingly an ongoing process rather than an annual review exercise.

Regular reviews of workforce arrangements and an understanding of how future recruitment decisions may affect a company’s Nitaqat position can help businesses respond before issues arise.

How Sovereign Group can help

Saudi Arabia remains one of the region’s most significant growth markets, but the regulatory environment continues to develop alongside that growth. Understanding how Saudization and Nitaqat apply to your business is an important part of establishing and maintaining a successful presence in the Kingdom.

Sovereign works with businesses entering and operating in Saudi Arabia to help them understand the practical implications of localisation requirements and how these interact with their wider establishment plans. We also support with the essential portal registrations, such as Qiwa (Nitaqat) for ongoing company compliance.

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