MITOS Tool 3 Migrant Asset Custodian Services (MACS)

Transcription

1 MITOS Tool 3 Migrant Asset Custodian Services (MACS) Published by:

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3 MITOS Tool 3 Migrant Asset Custodian Services (MACS) Make use of your assets from abroad 1. Tool: Some migrants leave property behind when they leave (land, assets, money). They can commission a custodian (organization) to maintain the assets in the hometown and use them for business activities in the CoO. 2. Objectives: This tool will: Create awareness of the need for MACS in both the migrants countries of origin and destination Stimulate and guide the emergence or professionalization of BDS Encourage the development and use of the MACS Manual 3. Target groups: CoD: Migrants. CoO: Actors with specific knowledge in property and asset management practice like lawyers, accountants and bankers. 4. Problems and potentials of migrants addressed by this tool: Many migrants leave behind physical and financial assets in their respective CoO. Usually, these are left to the migrants most trusted relatives or friends (and in some remote places, to the village chief). While they are temporarily (or permanently) absent, the assets lay idle or underutilized. The idea of custodian service is unknown in many countries and migrants learn about them only in their countries of destination. This practice not only causes migrants sleepless nights worrying about the state of their assets and properties left behind, but there are real opportunity losses as well. Property buyers cannot immediately buy the property if they do not have adequate information about it. There are also situations in which migrants want to exchange a property in an urban area for an agricultural property in rural areas, or vice versa. It is difficult for asset custodians to formally exist in many of the migrants countries of origin. Technically, it is the combination of three academic fields that seldom cross-fertilize: finance, law and banking. Finance covers asset valuation, security, insurance and risk assessment, wealth management and insuring the productive use of assets. Law handles the transactions rules (e.g., buying and selling the properties, holding the property and executing wills), notarial services taxation. Banking keeps the assets safe and manages change of ownership. As such, the services delivered by each entity are rarely comprehensive, inefficient and fail to respond to specific needs of migrants. More industrialized countries of residence of migrants have custodian services with different titles: estate agents, trust lawyers, notary public, asset custodians, estate planners, etc. Back in their CoO, migrants would not find the infrastructure with lawyers, accountants and bankers or it would be difficult for them to invest if all the investment agencies are in separate offices (See MITOS Tool 11: One Stop Shop Tool). This shows the urgency of the migrants need for this business service. Its potential commercial values are likewise increasing with the number of migrants. Finally, many migrant countries of origin could benefit from the value and wealth creation opportunities would 1

4 the leftover assets be mainstreamed into the local economy. 5. Description: The Migrant Asset Custodian Service (MACS) is based on the custodianship principle. A custodian is an agent or entity who safeguards responsibly and professionally a firm s or individual s properties and assets. They perform various roles for their clients, including: (a) safekeeping, (b) facilitating actions to sell or rent, (c) collect up to date information on asset values (dividends in the case of equities and interest in the case of bonds), (d) security and threat prevention (including insurance), and (e) keep the properties legal. There are national and international custodians. They can provide the clients with a comprehensive services menu when the migrants are: (a) preparing to move to their host countries, (b) while they are abroad (temporary or otherwise), and (c) on return. MACS can also represent their clients legally. MACS lawyers can handle trusts and estate documents. Trusts are established by a grantor (a migrant) who, over the span of his or her lifetime, adds assets such as real estate or investments to the trust for the purpose of passing them to a designated beneficiary. An estate is a broad definition of a client s total assets at the time of death, and is distributed according to the terms in a will. See Annex 1 for a generic job description The tool: In MACS, assets or properties are any physical or intangible items that are owned by migrants, his or her family or jointly by a group of migrants. They include: (a) real property (commercial, industrial and agricultural, etc. land), (b) personal property (physical possessions belonging to the migrant: cars, jewellery, book collection, trusts, savings, (equities and bonds, shares in cooperatives, etc.)), (c) private property (property owned by legal persons or business entities, houses, leased properties, art pieces, gifts, awards, special collections, etc.), and (d) intellectual property (exclusive rights over artistic creations, inventions, etc.). This tool will create the structure for a manual for the provision of MACS services to interested migrants. To use the tool, your project would need the following elements: 1. Initiation. A one-day appraisal workshop on asset custodianship can initiate the launching of MACS and a manual (See Annex 2 for the Generic Format). The workshop could assemble potential stakeholders based on their interest in creating and offering MACS services to migrants, like lawyers, accountants, bankers and (real estate) financiers. The agenda can cover: (a) migrants needs for managing assets and properties, (b) consequences of absentee management, (c) the business of asset custodianship, (d) a workshop on services for migrants linked to the different stages of migration (e.g., before migration, during a stay abroad, visits, and after relocation), and (e) contents of a MACS manual. In the end, the workshop can identify a group who can contribute in preparing the manual, as required by local/national context. 2. Manual development. The manual should be prepared by selected local writers to ensure ownership and to strengthen the cross-fertilization among the different professions involved. Chapter writers should submit their topic outlines prior to developing the contents. An editorial board (e.g. consisting of respected seniors in the profession) may likewise be set up to review the entries and ensure a unified terms. During the development process, the project can initiate several two-hour get-together meetings to review the progress, integrate and tighten links between chapters, encourage cross-fertilization, and promote business partnerships. 3. Tools. The manual should contain relevant inputs on the following issues: (a) Asset Profiling and Asset 2

5 Valuation Techniques, (b) micro-insurance schemes, (c) threat risk assessment, (d) e-storage, (f) internet marketing, etc. The project may provide a national short term expert in this regard. Periodic meetings may be arranged by your project/institution and the writers. 4. Dissemination and application. For the printing, the project should approach sponsors including MFIs, money transfer operators, professional associations and other migrant assisting companies and stakeholders. The project may also create an e-storage for all the MACS prepared by similar projects. The manual can be disseminated via business and vocational schools, chambers of commerce, and relevant local government units. In addition, MFIs and money transfer operators can also selectively disseminate copies. 6. Prerequisites: Implementing organization/service providers: Early participation of the professional regulations board, chambers of commerce, migrant NGOs, and the government will add credibility to the manual and eventually the MACS as a business. The members of the manual s editorial board should consist of respected individuals representing the main disciplines. 7. Particularities and/or difficulties: MACS can be attached to an existing legal, accounting or banking service as available in most developed migrant destination countries. However, new partnerships can also emerge as a result of the cross-fertilization experience expected during the manual s development. The business branch of managing migrants assets offers interesting vocational perspectives. It can be expected that several young professionals will emerge as entrepreneurs in this field. In some countries there are junior lawyers (paralegals), junior accountants, etc. who could be trained and certified as MACS providers. Depending on the country and cultural context, it will be a key success factor to identify professions that are renowned and accepted by their integrity and trustworthiness. 8. Costs: Costs vary from country to country based on rates of resource persons and other cost items. A table of estimated average costs for different activities is given as follows: Activity Approximate cost in US$ Initiation of the manual 500 Appreciation workshop 4,500 Manual development 10,000 MACS tooling workshop 3,000 Dissemination and application 3,000 Total 21, Dissemination: Similar practices like MACS are available in many migrants countries of residence. This can easily be replicated in migrants countries of origin. Depending on the size of the migrants market, MACS can also be sold as a commercial franchise for specific high density migrant populations. 10. Links to other MITOS tools: MITOS Tool 01: Migrant Opportunities Website MITOS Tool 04: Migrant Innovation Treasury MITOS Tool 10: Trade Promotion Agency Manual MITOS Tool 11: One Stop Shop Service for Migrants Prepared by: Dr. Eduardo Canela, CEFE International coordination@cefe.net 3

6 Annex 1 Generic Job Description 1. Job content The MACS will report to the client (Name of Migrant): periodically and will perform the following services: 1. Listing and cataloguing assets. Compile all the assets and supporting documents of the client. Arrange for the safekeeping of the documents and check the status of the assets during the period agreed with the client. 2. Valuing assets. Arrange for an asset valuation using appropriate tools. Analyze the market for benchmarks and report on it. 3. Managing properties and assets. When granted the legal permission to do so, represent the client to vendors, sell property to buyers on client s behalf, suggest disposal of property, let and sublet. 4. Monitoring values. Periodically assess the value of the assets and the developments within the perimeters and report to the client whenever new developments happen. 5. Securing insurance. Review assets and liabilities and determine if they are adequately covered by insurance. Suggest insurances (including life and accident) that will provide maximum financial security for family and protect the assets to the client. 6. Advising. Advise clients on wills, trusts, business agreements, market potentials, price levels, and taxes. Compute expenses, taxes, and debts to determine the value of adjusted gross value of the assets according to accounting and tax laws. 7. Maintaining trust. Maintain a strong and trustful relationship with the client s wealth management banker or adviser. 2. Educational requirements Law, accounting and finance graduates with at least five years of experience in related fields. If available, they should be licensed by their respective professional boards. MACS needs constant participation in training and events in related topics including database management, spreadsheet, and internet technologies. 4

7 Annex 2 A generic format of a MACS manual Chapter 1: The Service Industry and MACS Needs of migrants The asset custodian service industry Out-migrants In-migrants Pre-needs, needs and others Trends and prospects Chapter 2: Legal framework and applicable laws Chapter 3: MACS Introduction to BDS Migrant services during: Pre-departure Visits Return (permanent or temporary) Other tied-in services (valuation, security, inspections, documents, estate agent, credit and collection, designers, urban planners, travel bureaus, etc. Note that each service should have: (a) a brief description, procedures for delivery, forms and templates (to be annexed), indicators that the service has been delivered, costing and pricing services Chapter 4: MACS Tools Asset profiling and asset valuation techniques Micro-insurance Threat risk assessment E-storage Internet marketing Chapter 5: Dealing with Migrants Migrants as clients Customer relations Internet-based customer relations Knowing your customers The long haul service Chapter 6: Professional qualifications Education Training Special courses and conferences Certification Building MACS competencies Chapter 7: MACS Career and Professions Code of conduct Professional associations Image and reputation management Succession management 5

8 Chapter 8: MIS and Records Management Ownership papers and documents Rules in managing documents MIS principles and database management Safekeeping for documents Chapter 9: Succeeding in your business Organizing your MACS business (Single proprietorship or partnership) How much capital is enough? Marketing MACS Managing your contacts and time You and your assistants Office administration Legal and financial audits You and the internet Ten tips to succeed in MACS Chapter 10: Epilogue Frequently asked questions Relevant sites Annex 1: Relevant forms and templates Annex 2: Software and internet sites 6

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12 Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Sector Project Migration and Development Registered offices Bonn and Eschborn, Germany Friedrich-Ebert-Allee 40 Dag-Hammarskjöld-Weg Bonn/Germany Eschborn/Germany Phone: Phone: Fax: Fax: migration@giz.de Authors CEFE International and the global network of CEFE trainers Design andreas korn visuelle kommunikation, Bad Homburg Printed by Aksoy Print & Projektmanagement, Eppelheim Printed on FSC-certified paper Photographs Front cover: GIZ/Ursula Meissner As at July 2012 GIZ is responsible for the content of this publication. On behalf of Federal Ministry for Economic Cooperation and Development, Division Federal government/states/local authorities; migration and employment; returning experts; export credit and investment guarantees Addresses of the BMZ offices BMZ Bonn BMZ Berlin Dahlmannstraße 4 Stresemannstraße Bonn/Germany Berlin/Germany Phone: Phone: Fax: Fax: poststelle@bmz.bund.de