Latin American wealth is engaging more actively with US markets with growing appetite for dynamic and hands-on strategies.
The US has become increasingly attractive to Latin American high net worth individuals (HNWIs) and family offices, seeking stability, growth, and strong legal protection for their wealth.
As economic conditions fluctuate in Latin America – along with new leftist governments in Brazil, Chile and Colombia – sophisticated investors are prioritising the US market for wealth preservation and expansion. Regulatory changes to investment diversification are helping drive this interest.
HNWIs from Latin America possess investible assets worth $9.4tn, according to the Capgemini Research Institute’s World Wealth Report 2024. This figure rose 2.2 per cent from the year before.
Latin American family offices and private equity firms have moved beyond traditional asset management, increasingly investing directly in US companies in a variety of sectors. Real estate remains a mainstay, offering consistent returns and acting as a buffer against regional volatility.
However, many families are now being drawn to private equity and co-investment opportunities within the US. This diversification reflects a notable evolution towards high value opportunities rather than purely protective investments. This trend is redefining how Latin American wealth engages more actively with US markets and signals growing appetite for dynamic and hands–on strategies.
Miami price
This trend is particularly evident in Miami, a migration destination of choice for the fortunes of the region’s wealthiest investors, fleeing political turmoil and chasing increasing yields. Wealth managed by the Miami office of JP Morgan Chase & Co, for instance, grew 10 per cent this year from Mexico, Argentina, Chile, Peru and other Latin American countries.
This shift is occurring even as the scarcity of US tax treaties in Latin America blocks many investors from accessing preferential US tax rates and reduced withholding on outbound US source payments.
For decades, the US’s only Latin American tax treaty partners were Mexico and Venezuela. In early 2024, the US-Chile tax treaty finally became effective following an unprecedented capital outflow from a country that has historically reinvested its wealth domestically. While a double-edged sword when it comes to information exchange, the US-Spain treaty is also an increasingly useful tool for Latin American investors in the US, as most of their countries do have a tax treaty with Spain that can sometimes provide benefit for multinational operations.
Creating a dynasty
Latin American families are increasingly turning to US trusts for intergenerational wealth transfer and asset protection. US trusts provide a level of confidentiality, control and robust legal safeguards that appeals to Latin American investors. These trusts allow consolidation of diverse asset types – real estate, stocks and private equity – within a single structure, simplifying management and enhancing continuity across generations.
US trusts also facilitate estate planning outside the often-rigid inheritance processes prevalent in Latin America. For instance, dynasty trusts allow families to preserve and control their wealth across multiple generations, shielding assets from sometimes challenging family dynamics. These structures provide a clear pathway for tax-efficient intergenerational wealth transfer, while respecting applicable legal considerations of the investors’ home countries.
Specifically, some countries in the region have yet to issue rules regarding how trusts should be taxed while others, such as Colombia, have established rigid standards that make it very difficult to achieve tax deferral using a US trust. On the other hand, Brazil, the country with more billionaires than the rest of the region put together, has more trust-friendly legislation facilitating more efficient planning.
Overall, US trusts have become central to wealth management strategies of Latin American families, offering simplicity, security and longevity.
Tax attacks
A significant regulatory shift affecting Latin American investors in the US is the recently enacted Corporate Transparency Act (CTA). The CTA requires companies to disclose beneficial ownership information (BOI) to US authorities, affecting structures used by wealthy Latin American investors that hold underlying US companies. Aimed at curbing illicit activities conducted through shell companies, the CTA’s reporting requirements have broad implications for legitimate investment vehicles. For many Latin American investors accustomed to greater confidentiality, the CTA represents a move toward transparency that necessitates careful consideration and compliance with US regulations.
The big question is which foreign governments will have access to BOI and what the process will be to obtain it from the US. Mexico, for example, already exchanges tax information and will likely access BOI as well, at least upon request. Venezuela, on the other hand, most certainly will not have access, except in specific cases using diplomatic channels. It also emphasises importance of robust legal structuring to meet these reporting requirements while still achieving investment objectives. This transparency mandate is part of a broader trend, encouraging investors to adopt bespoke legal structures that are both compliant and effective in serving family goals.
Although many companies have already filed their BOI reports, a temporary injunction was placed in December making compliance voluntary while the courts determine whether the CTA is constitutional.
Fresh perspectives
A growing number of millennials from wealthy Latin American families have pursued higher education in the US, particularly in business, finance and related fields. Many of these young professionals attended prestigious US universities with elite alumni networks and acquired valuable expertise in investment strategies, market dynamics and global financial practices.
As they return home, these millennials are stepping into leadership roles within their family offices, infusing fresh perspectives into investment decisions. In fact, nowadays their family offices are just as likely to be located in the US. With a strong foundation in US business practices and networks, these millennial decision-makers are more inclined toward private equity and angel investing and bringing innovative approaches to family portfolios. Their influence is modernising family investment strategies, prioritising agility, innovation and alignment with global best practices, further strengthening the bond between Latin American capital and US opportunities.
As regulatory and transparency requirements evolve – driven by legislation like the Corporate Transparency Act and shifts in tax policy – Latin American investors must stay agile, adapting strategies to remain compliant and resilient. By thoughtfully structuring their investments, Latin American families can maximise unique advantages of the US market while preserving their wealth for generations to come.
Eduardo R. Arista, partner, Holland & Knight
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