1Why choose to establish a land trust/financial product in Hong Kong:
Hong Kong Trust has a history of over 100 years; in 1946, HSBC established Hong Kong’s first trust company
● After the new amendments, the Hong Kong Trust can extend the period of asset protection indefinitely, so it can effectively plan for multi-generation asset inheritance.
In most common law jurisdictions, it is generally impossible to extend trusts indefinitely, while in other countries, the maximum period of trusts is only 125 years.
(Malaysia-80 years; Singapore-100 years; United Kingdom-125 years)
The Securities Regulatory Commission, the Insurance Regulatory Authority, the MPFA and the Hong Kong Monetary Authority are the main regulators of the Hong Kong financial system. Since trust is at the top of the financial industry, trust companies can hold stocks, funds, insurance and banking products, etc., and are directly supervised by the above-mentioned major institutions. Therefore, Hong Kong Trust Asset Management Co., Ltd. is directly under the supervision of the Financial Secretary of the Hong Kong Special Administrative Region.
Ranked first in Asian finance; no foreign exchange management system, free capital flow
As of September 11, 2017, the Global Financial Centers Index showed that Hong Kong ranked third, with New York as the first and London as the second.
2. How can Hong Kong Trust effectively hide the identity of clients
The trust company will, according to the wishes of the trustor, entrust the trust company to invest in the trustee's name. Therefore, the trust can effectively hide the identity of the customer.
3. Is the establishment of a trust in Hong Kong highly confidential?
According to section 33 of Part 6 of the Personal Data (Privacy) Ordinance, it is prohibited to transfer personal data to places outside Hong Kong except under specified circumstances. The trust company must protect the privacy of its customers and does not need to disclose the privacy information of its trust customers to any institution or country. (Example: After the amendment of the Hong Kong Trust Law in 2013, trust companies do not need to disclose trust customer privacy information to any institution or country.)
4. If the trust company mismanagement/bankruptcy, how can client assets be protected
In fact, the probability of a trust company going bankrupt is almost zero. According to relevant statistics, there are currently 165 trust companies in Hong Kong, but so far there is no record of bankruptcy. If the trust company does not operate well, the trust still has a special mode of operation; the bank will manage the trust assets independently, and the customer assets belong to the beneficiaries, not the trust company or the founder of the trust. Therefore, trust assets are not affected by the failure of trust companies. According to Chapter 76 of the "Trust Recognition Ordinance" Chapter III-Recognition Section 11, the trust property is an independent fund and not part of the trustee's property. According to Chapter 29 of the Trustee Ordinance, Part 8 of the trust company, the trustee’s assets are kept and accounted separately from the trust company
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5. How does Hong Kong trust protect trust customers
According to the "Anti-Compulsory Inheritance Rights", the trust declaration is governed by Hong Kong laws. The overseas mandatory inheritance rights rules will not affect the effectiveness of the settlor's transfer of current assets to the trust during his lifetime. Ø According to Article 2 of the "Trust Recognition Ordinance" Chapter 76, trust assets are held in the name of the trustee or in the name of another person on behalf of the trustee. Therefore, after the trust contract takes effect, all the client's assets will be held in the name of the trust company, that is, the trust product can effectively hide the client's identity. Ø According to the "Hong Kong Privacy Ordinance" and "Trustee Ordinance", the trustor transfers assets to a Hong Kong trust company, and there will be two legal regulations to protect personal data. Ø According to Article 33 of Part 6 of the Personal Data (Privacy) Ordinance, Hong Kong Trust has a high degree of confidentiality. Ø According to Chapter 76 of the "Trust Recognition Regulations" Chapter III-Recognition Section 11, this recognition must at least mean that the trust property is an independent fund within the scope required or prescribed by the law applicable to the trust. This recognition must particularly mean that-- (a) the trustee’s own creditors have no recourse against the trust assets; (b) when the trustee is insolvent or goes bankrupt, the trust assets must not become part of his property; (c) ) The trust assets shall not become part of the trustee or his spouse’s marital property, nor may it become part of the trustee’s posthumous estate; that is, the Hong Kong trust can achieve asset isolation.
6. General investment strategy
Mainly invest in high-quality bonds with bond ratings above BBB. Companies that issue corporate bonds must return their investment principal to investors in accordance with the bond issuance agreement when the bonds expire. According to the provisions of Hong Kong's "Trustee Ordinance", trust investment products can only be invested in capital-guaranteed projects and investment-grade bonds.
7. The benefits of choosing Hong Kong Trust's cash trust custody plan
1. Cost reduction. The trust establishment fee of US$50,000 can be waived.
2. Trust deed. Effectively protect customers' rights and interests and strictly comply with customers' wishes
8. How can Hong Kong trust reduce tax costs
Ø Taiwan can be divided into seven types of national taxes and eight types of local taxes: • National taxes: customs, mining tax, income tax, inheritance tax, gift tax, excise tax, securities transaction tax, futures transaction tax, business tax, tobacco and alcohol tax. • Local taxes: stamp duty, license tax, land value tax, land tax (stopped in 1987), land value-added tax, housing tax, deed tax, entertainment tax. Ø Current taxes in Malaysia: corporate income tax, personal income tax, real estate profits tax, petroleum income tax, sales tax, contract tax, windfall profit tax, service tax and customs duties, etc.
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According to the "Trustee Regulations", the profits made by trust companies investing on behalf of clients are not subject to tax.
9. How the trust treasures the safety of client assets
Hong Kong trust asset management requires a legal trust license and is regulated by relevant Hong Kong laws; its investment products are also regulated by the MPFA, the Securities Regulatory Commission, the Monetary Authority and other departments, and their security and transparency are quite high. The trust company will make arrangements in accordance with the guidelines of the Hong Kong regulatory authority to strictly protect client assets. In addition, under the protection of the trust contract, the trust company will make asset trust management arrangements according to the wishes of the clients, and the lawyers and the third-party custodian bank will jointly manage and protect the assets, and have a multi-faceted professional asset preservation system for management and preservation. Depositing money in the bank has safer preservation and supervision.
10. Will Hong Kong trust customers be affected by the Common Reporting Standard (CRS)?
Although the CRS is not a legally valid model, the OECD, the organization that initiated the CRS, advocates that member states should sign agreements on citizen information exchange as required. According to CRS regulations, banks, trust companies, insurance companies, funds, investment companies, etc. are required to fill in CRS personal information, but based on the protection of Hong Kong’s Personal Data (Privacy) Ordinance and the Trustee Ordinance, Hong Kong trust companies do not need Proactively declare personal information. In addition, the current CRS is mainly aimed at people with a net asset value of more than US$1 million, so it is recommended to participate in a Hong Kong trust as soon as possible.
11. How does a trust achieve asset isolation
There are many types of trusts. To properly protect assets and hope to achieve the effect of the firewall, the founder must first establish a "Living Trust", that is, the assets under the founder's name have been injected into the trust during his lifetime, and the trustee (usually a trust company) will follow the trust file And refer to the founder’s wishes to manage and distribute these assets, and continue to financially take care of the founder’s designated beneficiaries after the founder’s death to protect their living needs. After the founder and the trustee sign the trust file, the founder will legally transfer the assets under his name to the trustee in accordance with the established timetable. After completing the relevant transfer procedures, the trustee will become the nominal owner of the assets people. Since the name of the founder will no longer be shown as the current property owner in the current asset registration and other asset certification files, the possibility of others obtaining such information from public records is reduced, and the protection of confidential asset information is strengthened to build "Asset firewall".
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12. Will the trust involve "money laundering" behavior?
"Money laundering" means to conceal the true source and existence of illegal funds and legalize them through various means. However, the trust has a long history of nearly 100 years and is strictly regulated by Hong Kong trust laws. The purpose of the trust is to manage assets for individuals or families, and to make legal investments according to individual wishes. There is no “money laundering” involved. In addition, the trust founder must sign a capital certificate before establishing a trust to ensure that its funds are sourced from legal sources. Therefore, a trust is a legal and safe asset management method. In short, the trustee of the trust may refuse to custody funds with questionable origins ("veto" for short). Currently, banks have strict guidelines on this, which can avoid various illegal actions.
13. Does the government have the right to investigate the trust founder?
According to section 33 of Part 6 of the Personal Data (Privacy) Ordinance, it is prohibited to transfer personal data to places outside Hong Kong except under specified circumstances. The trust company must protect the privacy of its customers and does not need to disclose the privacy information of its trust customers to any institution or country. (Example: After the Hong Kong Trust Law was revised in 2013, trust companies do not need to disclose trust customer privacy information to any institution or country.)
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