EXPERT INSIGHTS

Haibo Xu/Dongming Liu In spite of the global economic slowdown, the export-oriented feature of the Chinese economy has constantly been reinforced. With the volatility of currency exchange rates, there is a stronger desire for idle domestic capital to be converted into foreign capital. By setting up private funds, domestic, industrial and financial capital takes an active role in cross-border mergers and acquisition, and stimulates industrial integration on both a global and a regional basis. Compared with foreign-raised private USD funds, the so-called RMB funds have international vision,and operating capability. They integrate profound government and industrial resources, and thus play an...

EXPERT INSIGHTS 2020

Catherine Le Bourgeois, Wilson Yeung The current legal framework of Hong Kong Trusts The Trust Law (Amendment) Ordinance 2013 ("the Ordinance"), which aims to modernize Hong Kong's trust laws, became effective on 1 December 2013. The Ordinance states that its main objective is to amend the Trustee Ordinance and Perpetuities and Accumulations Ordinance to extend trustees' powers in certain aspects, impose a statutory duty of care on trustees, provide for the validity of certain trusts, abolish the rule against perpetuities, and change the rule against excessive accumulations of income. The major changes include (i) extension of trustees' powers to take...

EXPERT INSIGHTS 2020

Robert Wood Trusts, holding companies, limited liability companies and various other forms of ownership are the norm for offshore clients and assets. In many jurisdictions, even personal residences are rarely held directly by those who live in them. Yet in the midst of considering offshore income and assets, the age-old joint bank account is often still present. Around the world, joint bank accounts are common between spouses, siblings, parent and child, and in many other situations. Indeed, even unrelated people may share investment or property accounts.  Across myriad situations, joint accounts allow equal access to funds but often have unclear...

EXPERT INSIGHTS 2020

Michael Liu So far, most international trustees have to admit that the promotion of offshore trusts in the Chinese market is far from the optimistic expectations they held five years ago, but it is also not as pessimistic as what those who have retreated describe. Like other businesses which entered China for a share of the local market, a very high threshold stands in the way of such a large market, especially for offshore trusts. Due to the significant gap between local trusts and offshore trusts, promoting offshore trusts in China is like selling shoes in a country where people...

EXPERT INSIGHTS 2020

Louis C. Lee In recent years, the wealth management issue that has received the closest attention in China is no doubt the reform of the trust system. As trusts are no longer a purely financial product or instrument, they have also become a mechanism for truly assisting people in managing and passing on their wealth. However, taking a broad view of the international community, every country that has successfully implemented the trust system has without exception steered a cautious course in designing the relationships between the Trustor (or Grantor), the Trustee, and the Beneficiary. Due to the immature environment in...

EXPERT INSIGHTS 2020

In the coastal cities of China, enterprises have been gaining an increasingly deep understanding of offshore companies. Meanwhile, in recent years, more and more offshore institutions have been established and registered. An offshore company refers to a limited liability company established in an offshore jurisdiction according to its laws and regulations on offshore companies. Local government collects no tax but only a small amount of corporation administration charges from offshore companies. Besides, most major banks in the world recognize and accept offshore companies, agreeing to open bank accounts for them and provide them with financial operation services. Offshore companies feature...

EXPERT INSIGHTS 2020

John Swann It is well known that offshore companies are widely used in China with Hong Kong, BVI and Cayman companies being the most common. Such structuring is of great benefit particularly in relation to outbound investment. As time moves on, entrepreneurs and investors are giving increasing attention to matters of estate planning to ensure that the fruit of their labours can be passed to the next generation as efficiently as possible, and ideally in such a way that assets do not need to be broken up or sold in order to settle inheritance tax bills.  It is with such...

EXPERT INSIGHTS 2020

Jacky Jiang The year 2015 has witnessed the rapid expansion of the Chinese family office industry, as indicated by the booming growth of professional institutions that provide services for Chinese families (enterprises) represented by local family offices.  Various family offices’ understanding of the family, industry and approach to service have similarities but differs in many ways, too. Our team has been studying the myriad challenges facing the family (enterprise), and exploring the best approach that integrates overseas family offices’ approach with the Chinese practice.We will share our insights with readers in this article. Challenges Faced By Contemporary Chinese Families As...

EXPERT INSIGHTS 2020