The Rise of HNWI in Eastern Europe

25 May 2021

Eastern Europe is increasingly a great place to do business for a number of varied reasons. A knock-on effect of this is that we are seeing increased wealth across much of the region.

‘Although we do see some inheritance of significant wealth in Eastern Europe, it’s more the norm that the wealth comes from first-generation entrepreneurs and founders who have accumulated wealth in their lifetime. This means that wealth isn’t multi-generational in the same way we see in other parts of Europe and the US. It will be interesting to see what happens next: will an external CEO come in to lead the business when the founder steps down? Will siblings run the company, or will just one child take over the business? The coming years may well set the scene for the handover of wealth in the Eastern European region in the future,’ says Martina.

Eastern Europeans tend to be family-orientated and for the wealthy, setting up structures that ensure everyone is taken care of can be a consideration, especially for founders whose wealth is self-made and who may come from humble beginnings. Rather than only passing on wealth to children, they may want to include structures where brothers, sisters, nieces and nephews are also considered, especially in the sense of giving the next generation the resources to be able to chase their own opportunities. We have recently seen an increased number of enquiries from this region considering setting-up Trust structures for estate planning and wealth protection purposes.

Philanthropy is becoming a more popular trend, with many wealthy families and individuals looking to give back to worthy causes in their home countries.

As with most holders of significant wealth, UHNWI tend to be well-versed by advisors and have been for some time. However, much of Eastern Europe’s family wealth being generated at the ‘HNWI level’ (between the equivalent of the 1 million USD and the USD 30 million mark).  The result is that these wealthy individuals and families are often just starting to think about how to structure their wealth and may not have worked with advisors and service providers like ZEDRA before.

‘It’s here that ZEDRA sets itself apart, as we have a lot of experience with Eastern European clients and their advisors. With a significant understanding of the region, local, cultural and language knowledge and familiarity with the specific structures and requirements typically used by these clients, we are ideally placed to offer support, especially for clients who are thinking about structuring their wealth for the first time,’ says Martina.

For more information, please contact Martina Edwards.

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