Mirrored Entity Portfolio Investing: U.S. Stock Options for Vietnamese Investors
September 3, 2021
By José E. Latour, Esq.
LatourLaw has almost 3 decades of serving as the multifamily office (MFO) for foreign clients with U.S. assets and investments. During that time, we’ve managed real estate transactions, monitored business investments, purchased/sold/registered insured aircraft and yachts…we’ve pretty much done everything an absentee investor with U.S. assets requires for their peace of mind. Charging an affordable annual fee based on the specific size/substance of our client family’s US holdings, LL MFO serves primarily as a “watchdog” for our clients’ interests, supervising and liaising with accountants, real estate managers, insurers, construction companies, etc. to ensure that our clients’ US assets AND their ongoing financial interests are being protected.
Since establishing our full-time office in Ho Chi Minh City six years ago, LL MFO services have been of particular interest to our Vietnamese clients, due to both the geographic distance from the U.S. (making it difficult for the client to pop in to check on their US investments) and the practical reality that most are far too busy even if they were closer. Moreover, over 80% of the Vietnamese clients having U.S. assets that I’ve personally spoken to over the past decade have been previously ripped off or defrauded by the very attorneys, realtors, and advisors – some Vietnamese, others American – who were SUPPOSED to protect their interests in the U.S. That’s where LL MFO comes in.
Despite nearly 30 years of playing this role, there has been ONE service LL MFO has not been able to previously provide to our private clients: a direct investment channel offering our high net worth Vietnamese clients the opportunity to invest directly and legally within the U.S. stock, futures, equities, and other financial markets. Because of complex financial, banking, and tax regulations introduced in the U.S. over the years, it has become nearly impossible for U.S. brokerage firms to accept international investors who are non-U.S. citizens or residents. Today, NOT ONE of the respected American brokerage houses will accept a new account applications from a non-U.S. resident…not even from Europe.
While there are several online U.S. investment companies who appear to accept foreign investors, my research led me to conclude that they are treading on thin ice as far as U.S. securities regulations; moreover, to open an account with these online brokers, the U.S. government requires extensive private information regarding the foreign investor, a very invasive process. While our clients fully understand and accept that they must pay U.S. taxes on the profits of their U.S. investments, it would be foolhardy to voluntarily submit their foreign investments to USG scrutiny when it is absolutely not required.
I have only been able to make it to Vietnam once in 2021, but the trip made my 14 day hotel quarantine worth every minute. I am eager to return to my regular travel schedule but in the meantime, Monica, Laura, and I continue to speak and work together daily to fashion solutions for our Vietnamese private clients. After years of having to tell clients that we could NOT assist them in establishing U.S. investment portfolios, I decided to go deep into the subject, asking myself this question:
How can we offer U.S. investment market access to LL clients without creating tax complications for them?
It took me over six months of research, interviews with compliance teams, regulators, and countless discussions with investment advisors to finally come up with a solution: Latourlaw’s Mirrored Entity Portfolio Investment Services (“MEPIS”). The solution, carefully crafted with my personal investment team – one of America’s top investment houses – complies with all U.S. laws while simultaneously creating a secure, transparent, and entirely private investment portfolio for our eligible clients. As has always been the case with our MSO services, LatourLaw will only be able to offer MEPIS to a small number of accredited investors (as defined by U.S. securities laws) and, more specifically, to our most esteemed and closest clients and friends.
Here is a brief explanation of how MEPIS works:
- The interested client applies for MEPIS via a confidential appointment (Facetime) to establish their eligibility, explain the source of their intended investment funds (SOF), and verify they qualify. (Since many of our inquiries come from our existing clients in Vietnam and we conduct due diligence on 100% of our clients, the SOF issue is usually already resolved in advance.)
- Upon LL MSO’s acceptance of the client:
- the client pays a US$10,000 MEPIS retainer fee which will be used to establish the necessary U.S. entity (depending on the client’s specific needs, either a Limited Liability Company or a Limited Partnership), register with the IRS, open bank account, open brokerage account, establish accountant oversight, and integrate the client’s planned investment portfolio into the database shared by LL MFO offices in Miami, Florida and Saigon, which serves as the direct contact point for al MEPIS clients and
- the client arranges to transfer their MEPIS investment funds (minimum US$1M) to LatourLaw’s U.S. trust account, where funds clear and are held until the client approves disbursement to the brokerage firm.
- After the retainer has been paid and funds wired to the U.S. trust account, the client participates in a secure video conference along with both LatourLaw offices and the Vice President of our U.S. MEPIS brokerage partner, who provides all investment advice to the client. At that time, the client learns his/her investment options, which range from “Mirroring” my own personal investment portfolio (which is aggressive and, accordingly, higher risk) as most clients seem to be interested in doing, or whether they want to do something more conservative or perhaps even select a handful of their favorite US stocks, ETFs, etc.
- Once the client approves the final portfolio breakdown, LatourLaw transfers funds from its trust account to the new U.S. entity, for which LatourLaw serves as the Manager and, for IRS purposes, the “responsible party”. The entity then transfers the funds to the MEPIS brokerage partner, who invests the capital as approved by the client.
While I cannot speak highly enough of the investment advice I’ve received from our partner broker, I find it somewhat humorous that virtually all clients with whom I’ve discussed MEPIS want to “mirror” my exact portfolio. I am certainly no financial expert, I am merely the recipient of good financial advise, after all! My impressive returns this year reflect my aggressive market position, and that implies volatility; any client choosing to “mirror” my account will be getting on the same roller coaster as me. But I suppose it is in some way satisfying to know that you are putting your money exactly where the person you’ve decided to trust put his money, whatever happens.
MEPIS offers something which has never been offered before to accredited non-U.S. investors wanting to invest in the U.S. financial markets:
- Investment Portfolio managed by one of America’s top investment houses and in accordance with all U.S. securities laws
- The opportunity to either “mirror” an informed, aggressive, high-return portfolio identical to my own or craft a unique portfolio of your own
- Direct access and control to U.S. bank account and freedom to receive or reinvest profits, with all U.S. tax accounting supervised by LatourLaw
- Ongoing, perpetual support from LL MFO offices in Vietnam and the U.S.
- A one year commitment to Latourlaw, with the freedom to adjust or even cash out your portfolio at any time.
Latourlaw MSO’s annual service fee, after the initial $10,000 MEPIS set up retainer, is 3% of the total assets invested by the MEPIS client. Your investment returns and profits are yours 100%; but we ALL want your portfolio value to build because as it does, so does LL MFO’s 3% annual fee.
100% of investment advise is provided by the MEPIS broker, a Vice President level executive to whom you will have, if you wish, direct personal access. LatourLaw acts as your intermediary with the broker, arranges all compliance and tax matters, and supports the you, the client, directly, so long as you wish to retain our MFO services. (I can think of potential MEPIS clients in Vietnam who are currently approaching their EB-5 approval who may elect to discontinue LL MFO’s services once they are settled in the U.S. and save the annual 3%…totally up to the client!)
We are NOT investment advisors and that’s why we could never offer this solution before; their was no way to do this without relying entirely on the MEPIS broker’s role. Any and all discussion relating to profit expectations, risks, etc. can only be relayed to MEPIS clients via the broker, but I can state the following as fact: in reviewing the outstanding Year-to-Date performance of my own portfolio for 2021, LatourLaw MFO’s 3% fee is a no-brainer for anyone mirroring my portfolio during this period.
MEPIS is an innovative and entirely novel way via which LatourLaw can assist our high net worth foreign clients in accessing the U.S. market via one of the nation’s largest and most well-respected investment houses. By serving as the U.S. legal representative of the investing entity, LatourLaw can play an ongoing, reliable support role for the foreign client, ensure that the broker/client communication channels remain open and dynamic, and assist our clients in maximizing their profits from their MEPIS investment in the U.S.
Please contact LatourLaw today to schedule your free, confidential evaluation to determine if you qualify for MEPIS.
Attorney José E. Latour
Aug 04, 2023
Feb 28, 2023