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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

Jeffery Chen Recent years have seen calls for the continued opening-up of Chinese individuals’ investments overseas grow louder and louder. Together, with both the arrival of global asset diversification, and the development of private funds in China, domestic funds are already following a trend towards investing in the global market by issuing overseas funds, using global strategies. Generally speaking, the function of overseas funds is to avoid risks in the domestic market and to grasp opportunities in the global market so as to assist clients in their global asset allocation. As for the so-called Chinese Overseas Fund, in reality, it...

EXPERT INSIGHTS 2020

By Wang Hao Introduction Along with rapid economic development, high-net-worth individuals in China are becoming increasingly knowledgeable about family trusts, a tool for wealth management and inheritance. The establishment of family trusts is firstly based on the confidence of a settlor in a trustee; however, in order to enhance the settlor’s sense of security when entrusting his or her assets to others, to better achieve the trust’s purposes, and to strengthen the settlor’s supervision over the trustee, many settlors choose to select a protector in their family trust structure, aiming to facilitate maintenance and extend the settlor’s control over the...

EXPERT INSIGHTS 2020

Liang Han The history of private foundations is as long as that of the trust system in Britain. Rooted in a continental legal system, private foundationshavealso absorbed some concepts from trust laws and modern corporate lawsunder the common law system, and have acquired some aspects of trusts too. However, running in a similar corporate pattern, private foundationsare a legal subject with independent corporate capacity. Therefore, the private foundation system is regarded as the trust system under civil law. I. Advantages of Private Foundations Compared with trusts, private foundations have the following advantages in terms of family wealth management: Perpetual Existence...

EXPERT INSIGHTS 2020