Securing the Future of Your Legacy
Secure the future of your property for your next of kin. Protect your wealth and assets with a Hong Kong trust.
What is a Hong Kong Trust?
A trust in Hong Kong is not considered a legal entity. Rather, it is going to be a private arrangement between you and the party you choose to legally entrust your assets to. This legal party (a trustee) is one you have chosen for a specific purpose. You will transfer your property or assets to this trustee until the time is right for them to distribute it to your next of kin.
In Hong Kong, 3E Accounting can act as your legal trustee. The Hong Kong trust system follows English common law. This is because it was colonised by the UK for centuries and therefore, it has adopted the legal system of the British.
The common law in Hong Kong was then supplemented with several other laws. For example, the Trustee Ordinance 1934 and Perpetuities and Accumulation Ordinance 1970.
The Trust Law Ordinance 2013
Hong Kong made its trust laws modern to be on par with other countries. Thus, it ratified the Trust Law Ordinance 2013. With trust, the following changes were made:
- No more rules against perpetuity for non-charitable trusts. This allows them to be set up indefinitely.
- Trusts will no longer be considered invalid if you (the settlor) retain the power of asset management.
- Moveable property is no longer subject to foreign inheritance laws.
- Clearer standards of care provided by the trustees.
- Trustees have limited exemption of liabilities to protect the beneficiaries.
With this law, trustees also have more power. For example, 3E Accounting, when acting as your trustee, can:
- Appoint agents, custodians, and nominees
- Get insurance for the properties
- Fewer restrictions for investment decisions
When acting within a professional capacity, trustees can also receive compensation.
Why Have a Hong Kong Trust?
A trust in Hong Kong is advisable for the following benefits:
- A trust in Hong Kong recognises foreign ownership.
- Assets are protected from creditors.
- Assets can be passed on quickly to the heirs.
- You (the settlor) retains substantial control.
- 100% of ownership is allowed.
How to Create a Trust in Hong Kong
A trust must contain the word “trust” in its name. You must first create a trust, and then follow the steps below:
- Clearly define properties listed under that trust.
- Clearly define who the beneficiaries are.
- Create a Trust Deed to identify your properties and transfer the title to the trustee.
- If your company is providing services, ensure you are licensed.
In Hong Kong, you don’t need to register your trust with the government. If your trusts are non-resident, you are 100% exempted from all taxes.
Interested in Creating a Trust?
We can help you with that. Secure your future in the hands of Hong Kong’s most trusted professionals. For more information about how we can help, contact our team today.