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Hong Kong Reviews Its Trust Reforms

Wednesday, November 20, 2013

In his speech at the recent Hong Kong Trustees' Association Conference 2013, the Secretary for Financial Services and the Treasury, Professor K C Chan, confirmed that the Government is keen to promote Hong Kong as a global center for trust services.

Chan called the trust industry "an indispensable pillar that cements our standing as a premier international asset management center." It offers a diverse range of services and products, including individual wealth and estate planning, as well as corporate trust services, such as trust administration and acting as a custodian. In addition, financial structures and products have been developed that utilize trusts, such as pension funds, real estate investment trusts and hedge funds.

He cited the many advantages that have set Hong Kong apart as a premier trust administration center. In particular, its proximity to the Mainland means the industry can offer its services to ultra-high-net-worth Chinese individuals who are seeking ways to manage their assets, as well as looking to preserve wealth and family businesses for passing on to future generations.

Chan noted that it is the Government's goal to develop Hong Kong "as the most competitive and dynamic wealth management business center in Asia," and that, with the setting up of the Private Wealth Management Association in September this year, "it is of vital importance that our regulations are up to date in order to take on new opportunities."

The Government launched a trust law reform exercise in 2008, which sought to modernize the Trustee Ordinance and the Perpetuities and Accumulations Ordinance, the two main pieces of legislation in Hong Kong's trust law regime. The exercise was brought to completion with the passage of the Trust Law (Amendment) Ordinance 2013 in July 2013.

The Amendment Ordinance, which, he said, "will put Hong Kong's trust law on par with those of other major comparable common law jurisdictions," will come into effect on December 1 this year. Amongst other benefits, it will enhance trustees' default powers and introduce a host of measures that can better protect beneficiaries.

In the Government's opinion, it should itself attract trusts to be set up in Hong Kong. In particular, through the abolition of the Rule against Perpetuities, settlors will be able to set up perpetual trusts in Hong Kong (which is still not possible in most major common law jurisdictions), and, through the introduction of the anti-forced heirship rule, settlors will not need to worry that the assets in the trusts would be clawed back by their heirs against their wishes in the future.

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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