Flexible and international insurance solutions

WEALINS has been dedicated for 30 years to life insurance and wealth management clients of the most varied nationalities. In Portugal, WEALINS supports several Swedish citizens, who have chosen this country to live. Letícia Soares, Country Manager Portugal, highlights the importance of this type of solution: its flexibility and portability, adaptable to any country where the client resides.

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WEALINS has been dedicated to wealth management insurance for 30 years, supporting clients of the most varied nationalities. How would you assess the evolution in the importance of taking out this type of insurance over the years? Are people more aware of its importance?

More and more clients are aware of this type of solution. Not only for the structuring, flexibility, or protection of their wealth, but also for the importance of deciding on their succession. Over the years, clients, mainly from countries considered Latin, such as Portugal, are more and more in demand of a personalised approach and support regarding their wealth expectations.

What features do your life insurance and capitalisation solutions have which allow you to then assure the market of the safety and security that are the hallmark of WEALINS in the markets where you operate?

Several. First, the fact that all our solutions are always in compliance with the tax law of the Client’s country of residence. And for that we work with an independent network of tax and legal experts who certify all our solutions before we presented to partners and their clients.

Furthermore, we are a pure Luxembourg player mainly because we belong to the Foyer Group, the first private group in Luxembourg, historical leader of the local insurance market since 1922, independent of any international financial institution. This means that we benefit from a familiar, stable, and independent shareholder.

And last but not the least, we cannot forget about the strongest policyholder protection regime in Europe (via the Triangle of security mechanism), the access to a wide range of underlying assets and the Luxembourg’s tax neutrality.

“WEALINS solutions
provide access to a wide
range of financial assets, innovative
sophisticated financial assets,
globally more comprehensive
financial assets, globally more comprehensive
available to insurance companies in the country
of the customer’s country of residence”.

Wealth management insurance must be adapted to the needs and reality of each client. WEALINS has, as a corporate characteristic, flexibility. Is this an added value for WEALINS solutions?

Undoubtedly. Luxembourg insurance regulations grant access to a large range of underlying assets, as authorized by the Luxembourg Insurance Supervisor (Commissariat aux Assurances). Our solutions provide access to a wide range of innovative and sophisticated financial assets, which are generally more comprehensive than those available to insurers established in the client’s country of residence. Depending on the amount invested and the size of their estate, clients may invest in bond funds, equity funds, UCITs, money market funds, listed or unlisted securities.  At WEALINS, we have internally a team dedicated to the analysis (on a regular basis) of the eligibility of each asset, quoted or unquoted, considering the situation of each client.

2021 was a year of growth for WEALINS, but 2022 brought war between Ukraine and Russia. What impact did you feel?

A greater demand for our solutions. The pandemic followed by this conflict in Europe are factors of instability in the life of each one  of us, and in these moments, the protection of heritage guaranteed by our product offering, makes our clients look for solutions that allow them to protect and transmit their wealth within a secure environment.

WEALINS also has, among its clients, some Swedish nationals who have been living in Portugal for about 10 years. How important is wealth management insurance for someone who, particularly, does not live in his home country?

Moving to a new country includes to adapt to many changes in the daily life. Some of the important ones are often to take care of the private economy and ensure that the succession planning suits the new country. The wealth management insurance is in most countries, amongst them Portugal, a very useful tool that makes this easier.

Tony Nordblad, Head of Sales North Europe

Is it possible to port these insurances if the client decides to move back to Sweden or to change his residence to any other country?

In fact, the service we offer to our clients, includes supporting them if they, for professional, personal, or family reasons, have to change country of residence.

The portability of the contract means that the Luxembourg life insurance contract can accompany the policyholder when he moves. 

In practice, whenever a client already has a WEALINS contract and decides to change his tax residence, our range of services covers the analysis of any necessary changes to the new jurisdiction, so that the contracted product maintains its classification as ” life insurance”, fully adapted as such to the law in force in the new country.

Specifically in the case of a Swedish citizen living in Portugal who decides to return to his home country, he can do so at any time, since our Portuguese contract taken out by a Swedish customer already has all the characteristics required to be classified as life insurance under Swedish law.

“This means that,
whenever a customer
already has a
WEALINS contract
and decides to change his or her
residence, our range of services
covers the analysis of
possible changes
to the new jurisdiction”.

Considering the cancellation of the Double Tax Treaty – “DTT” between Portugal and Sweden on 1st January 2022, what is the impact in the life of these clients?

From a tax perspective, in the absence of a DTT, Portugal and Sweden are bound to abide by their internal legislation in matter of payments of income to individuals residing in the other country.

The DTT granted Portugal the exclusive right to tax private pensions paid to Swedish pensioners who are tax residents in Portuguese territory, however, the NHR-status gave (until the changes introduced by the State Budget Law – “OE” – for 2020 – imposing IRS taxation, at the rate of 10%, on foreign-source pensions paid to residents registered as NHR) Swedish pensioners who took up residence in Portugal and which met the conditions required by the regime, the possibility of to receive their pensions completely exempt from taxation.

With the cancellation of the DTT this kind of income may now be subject to withholding tax in Sweden.

Nonetheless, Portuguese residents may recover the tax paid in Sweden in their Personal Income Tax in Portugal, through a tax credit mechanism.

WEALINS recommend to all partners and their clients to search legal and tax advice for a careful analysis of the transactions made between Portugal and Sweden.

What are the advantages of having insurance, after the cancellation of this treaty?

Even when the DTT was in force between Portugal and Sweden, we must not forget that all Portuguese residents are obliged to declare and pay taxes at a rate of 28% on capital gains, whether registered under the NHR regime or not.

Life insurance continues to be a solution in Portugal that may benefit from decreasing taxation according to the duration of the contract, as provided for in the IRS Code (one or three-fifths of the income is excluded from taxation if the redemption, advance, redemption, or other form of anticipation of availability, as well as maturity, occur after the first five or eight years of the contract). In addition, life insurance, except in the event of redemption, does not need to be declared for income tax purposes by clients, considering that this is an obligation of WEALINS under the Automatic Exchange of Information in Tax Matters Directive.

If the client intends to return to Sweden, what changes are necessary to the insurance and what should be taken into consideration at that moment?

As mentioned above, there are no necessary changes to be made to the insurance.

The only thing the client needs is to start declaring the insurance in Sweden and pay the annual Yield tax (sv.avkastningsskatt)

The yield tax on a foreign insurance is only due for the tax year after the year the client moved to Sweden.

For example, if the client is moving back in June 2022, the first yield tax (avkastningsskatt) is due for the tax year 2023 to be paid in 2024.

During our last interview, you told us that WEALINS is committed to digitalisation and the possibility of taking out insurance policies online. However, beyond that, what are your next goals that you can disclose?

Digitalization has played an important role in recent years. We listen carefully to the expectations of our wealthy clients, who seem to be increasingly looking for a hyper-personalized approach. To meet these specific needs, we, at WEALINS, are constantly innovating to develop unique and personalized solutions and services to provide a unique client experience.  At WEALINS, we launched the digital underwriting of our insurance contracts (and certain operations) last year based on a client-centric approach and are currently finalizing the implementation in all our markets. The feedbacks from our partners are quite positive about our new digital offering, and we have really tried to adapt to the expectations of our partners and clients. Nevertheless, we must recognize that the digitalization of wealth insurance is not yet over, and our team remains fully attentive to new trends and needs to always and continuously satisfy our partners and clients.

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