When The Bahamas passed the [Executive Entities Act](https://bfsb-bahamas.com/legislation/2011/ExecutiveEntitiesAct2011.pdf) in 2011, it did so in an attempt to resolve what Rose Chamberlayne, partner in the London firm of Wiggin, Osbourne, Fullerlove, describes as a *“universal challenge”*, in that families can go from *“shirtsleeves to shirtsleeves in three generations.”*

Ms. Chamberlayne is a former partner at Macfarlanes who along with Bahamian advisors and the Bahamas Financial Services Board worked on the BEE legislation. She notes, *“Family Office advisors are actively engaged in working with UHNW families and their businesses to break this paradigm. But how is this done? Whilst governance systems and processes which stabilise control of the family wealth, democratically plan for succession, enfranchise the family in a united purpose and deter and deal with conflicts are increasingly recognised as the proper tool for the job, it is how these are actually adopted into a wealth structure and adhered to in practice which presents the real challenge.”*

Echoing Ms. Chamberlayne, Katie Booth, Managing Director of Amber Private Office Ltd., says *“Many have come to realise that a succession plan only works in practice if successive generations subscribe to it and share in its vision and philosophy. Any such plans, however entrenched in the asset structuring and governance documentation, will only be of real practical benefit to the family if they are capable of responding to the family’s changing circumstances. A successful legacy family is one where the succession plan is based on a shared vision, not simply by the decree of the patriarch.”*

The BEE was enacted to put in practice the proper tools for governance in a common law legislative framework that is respected and secure. Indeed, many of the BEEs on the register in The Bahamas were designed to act as protectors or enforcers, just the type of fiduciary roles that enable the family to maintain their wealth. This wealth is not simply at risk because of errant heirs but largely because without a clear direction, wealth shrinks if spending outpaces returns …even more so, the larger the family tree. This is why governance is so critical and as Ms. Chamberlayne notes, *“The BEE offers a simple and focused platform for implementing governance within wealth structures.”*

In addition to governance functions, the original challenge the BEE was designed to meet was that of the share ownership of a private trust company. Finding a holding entity that does not create unnecessary complexity is always a challenge and the BEE resolves this problem in the neatest way possible because it is self-contained. The Bahamas is looking to make further amendments to the BEE Act this year, which would enable the BEE to perform functions like holding and exercising rights in relation to the management shares of an operating company or investment fund. The fact that the BEE is able to obtain insurance to indemnify its officers and council members makes it ideal for this purpose.

BFSB CEO Aliya Allen notes that already this year the Financial Transactions Reporting Act in The Bahamas was amended to allow the BEE to operate in relation to structures organized in more countries, including BVI, Chile, India and Mexico. This is welcome news for wealth advisors who were waiting to utilize the BEE in structures organized in a wider array of jurisdictions, *“Designed as a best practice solution for a single family office looking for an entity to own the shares of a PTC, act in a supervisory or advisory capacity and carry out administrative functions in relation to a series of structures, the BEE has grown into a versatile and popular vehicle with its executive capabilities set to expand further.*” says Ms. Chamberlayne.

Remarking on The Bahamas’ attractiveness for family offices, CEO Aliya Allen, says, “*Family Offices and their advisors are finding that The Bahamas offers a host of advantages: a full product suite of best in class legislation, a welcoming environment for business and residency, and the financial infrastructure, administration and asset management options that allow it to truly deliver to clients a fully integrated and overarching wealth plan for generations to come.”*