Asset Protection in Germany
Asset Protection in GermanyUpdated on Monday 14th September 2015
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What is asset protection?
Asset protection refers to strategies and policies developed to protect one’s assets in case of debt collection or bankruptcy procedures in Germany. Germany is a renowned wealth management center in which local and foreign investors are seeking to protect their assets by appealing to business or estate planning solutions. The German Commercial Code also provides different types of companies that can be employed as efficient asset protection vehicles.
Investment funds as asset protection vehicles in Germany
Investment funds are, perhaps, the most employed vehicles employed by investors to protect their assets in Germany. Among the available types of German collective investment schemes are retail funds, foreign retail funds and hedge funds. The traditional concept of investment funds allows foreign investors to open a German investment management company that will handle the portfolio management and fund administration. Foreign investors may opt for master funds that provide the possibility of accumulating capital in one master fund that gathers several sub funds that can be managed by different managers. Another type of investment funds in Germany are special funds that are usually held by institutional investors. Special funds may allow external managers to administrate the assets of the foreign investor in Germany.
In order to protect retail investors, the German Federal Ministry of Finance published a draft Retail Investor Protection Act in July 2014. The draft legislation is meant to expand the supervision of certain financial tools sold to retail investors in Germany.
You can contact our law firm in Germany for details about investment funds as asset protection vehicles.
Estate planning as asset management strategy in Germany
The main legislation employed in estate planning is the Inheritance Law in the German Civil Code. The Inheritance Law applies to both movable and immovable property in Germany. When planning one’s estate there are certain requirements that must be taken into consideration. If disposing of one’s assets is made by testament, foreign citizens established in Germany must comply with the requirements of the jurisdiction in order for the testament to be valid. A testament is valid if it complies with the laws of the country where the testator made the will. With respect to immovable property, if located in Germany, the testament will be subject to the German Civil Code.
Asset protection as a concept is not very well defined, but you can ask our German lawyers about the best strategies to protect your assets.