ニュースレター September 2014


Zetland Newsletter 
September, 2014

Dear Friend of Zetland,
I have recently read an article on Takashi Hashiyama, president of a Japanese firm which owned an art collection. In 2005, amidst an expected downturn in the economy, he wanted to sell the art and was faced with deciding which auction house to commission for the sale. Upon presentations of three auction houses he was still undecided and requested the auctioneers to play Rock – Paper – Scissors for the acceptance of the bid. While two companies did not give it any further thought and left the outcome to chance, the other researched and sought specialist advice from his daughter who played the game daily in school. He took her advice and was successful in winning the contract which netted his company also USD2 million.
I guess what I am trying to say is, don’t leave your affairs, corporate or personal, to chance, and have a strategy at hand. And if you need a specialist advice, contact us.
Here are some pointers for your next bar tab game: Statistically, rock is the most common choice for male players, particularly for alpha males (like me). Thus, choosing paper you have a marginally higher chance of winning. When playing multiple rounds, a win-lose pattern was observed: The player that wins is more likely to stick with his choice, whereas the losing player is more likely to switch to what would have beaten the winner’s choice.
Just as some useless information, I read the other day that there are more potential chess games than there are atoms in the universe.
Zetland is sponsoring the STEP Asia Conference held this year in Hong Kong on 8-9 October. We would enjoy meeting you at our stand.
Yours sincerely,




James Lee
Group Managing Director
Zetland Fiduciary Group

HK Trusts for IPOs

1409_HKTrustBusiness trusts in IPOs and listing structures are no longer just a niche product in Asia. Although REITs are still representing the majority of listed trusts, business trust have become an alternative offering vehicle to a straight corporate listing.
Singapore is Asia’s most developed trust listing hub with 49 listed trusts, of which 20 are business trusts. As early as 2004, Singapore implemented its business trust regime and listing rules.

In Hong Kong the first business trust listed in 2011. It was the PCCW spin-off HKT. Since then Hong Kong has seen 3 more trust listings. Among them Langham Hospitality Investments and HK Electric which have hit big news with their listing volumes. Although Hong Kong does not have a statutory listing regime, HKEx approved a hybrid structure consisting of fixed trust units and preference shares of the company, called Share Stapled Units to facilitate the listing.

The Share Stapled Unit arrangement, which is listed and traded as a single unit on the stock exchange, consists of three components: a) a unit; b) a beneficial interest in a specific ordinary share of the listing company which is linked to each unit and; c) a specific preference share issued by the listing company.


The benefit of using a business trust over a REIT is that the regulatory process is less stringent and the listing can usually be achieved in a shorter timeframe. A business trust has also more flexibility in terms of the underlying assets. This can be real estate, but may also be operational business such as PCCW and HK Electric, or a golf course.

Compared to a traditional listing, a trust listing promises the investors yield generating assets with a pledge to pay out most of its cash flow which is regulated in detail in the trust deed. Listed trust would generally pay out a higher dividend to their investors than traditional corporate listings.


Although business trusts have gained wide acceptance, it is more common to see trusts being used in pre-IPO planning and in many red-chip listing structures. In a red-chip structure, the Chinese operating company is typically held by a Hong Kong SPV making use of the China-Hong Kong double taxation agreement to reduce dividend payment withholding rates from 20% to 5/10%. The listing vehicle itself is, like the majority of HKEx listed companies, domiciled in the Cayman Islands. If the shares before the listing are held by a trust instead of a Chinese resident, this may enable a tax deferral on capital gains. Trust which allow for reserved powers of the settlor should be preferred as it leaves the settlor with more management and control flexibility.

Hong Kong’s trust law allows for reserved powers and settlers and can be tailored to IPO planning requirements.

For further information please contact in our Hong Kong office James Lee (jamesl@zetland.biz) or Dominik Stuiber (dominiks@zetland.biz).


香港にて初めて事業信託が上場されたのは2011年になります。大手通信企業PCCWが中核であるHKT(通信事業)を事業信託として香港で上場しました。以来、3つの事業信託が上場されています。ホテル業大手のLangham Hospitality Investmentsと電力会社大手のHK Electric(港灯電力投資)は調達資金額の大きさで話題となりました。

ゼットランドは香港信託の委託ライセンスを保有し信託サービスを提供しています。詳しくはJames Lee(ゼットランド代表、弁護士 jamesl@zetland.biz)または日本語は intray@zetland.biz までお問い合わせください。

Choice for Offshore Company – The Republic of The Marshall Islands

1409_MarshallIn recent years, the REPUBLIC OF THE MARSHALL ISLANDS Corporate Registry has witnessed dramatic growth in Asia especially in China. Professional intermediaries and financial institutions have supported the Corporate Registry because of its modern and flexible legislations, ease of formation and unparalleled customer-service. In addition, Marshall Islands Registry will also carry out KYC check on every individual before actual incorporation.
This growth is a direct result of the Marshall Islands’ ability to address aggressively and efficiently the leading issues facing the corporate world. With the intertwinement of governments and international organizations in transparency, it has become increasingly difficult for an offshore jurisdiction to retain the elements that make a corporate registry successful. The Marshall Islands, however, has met these challenges while maintaining its fundamental elements and is now the jurisdiction of choice for many professionals worldwide.

Modeled on Delaware laws

The Marshall Islands Associations Law, adopted in 1990, is primarily modeled on the corporate laws of State of Delaware of the United States of America. The Associations Law contains the Business Corporations Act (BCA), Revised Partnership Act, Limited Partnership Act, and Limited Liability Company Act.

The BCA governs international business corporations (IBCs). Marshall Islands IBCs are low-cost, easy to form and simple to administer. If standard Articles of Incorporation are used, a company may be formed in as quickly as in one business day. Ready-made shelf corporations are also available. All filed documents must be in English but may be accompanied by a filed foreign language translation. The name of a Marshall Islands entity can be in any language and any internationally recognized corporate suffix is acceptable.

Flexibility in organization and operation

The BCA contains provisions with unique flexibility so that each corporation may be organized in the US style with a President, Secretary and Treasurer or in the UK style with Director and Corporate Secretary. Only one director is necessary and the only officer required is a secretary. Corporations may have such other officers, however designated, as provided in the Articles of Incorporation or bylaws. Officers and/or directors may be of any nationality and may be corporations or individuals and their meetings may be held anywhere in the world. A person and/or entity can hold more than one office and/or directorship. Companies are not required to file the names of officers and directors with the registry, but they may do so on a voluntary basis.

The Articles of Incorporation may include special provisions regarding the scope of activities or the conduct of the affairs of the corporation. There are also selected optional purpose and power clauses, which may be included in the Articles. Banking and insurance corporations are not permitted.

Shares may be in registered and/or bearer form. There are no minimum state-in capital requirements and no annual filings required. Board of Director and Shareholder meetings may also be held anywhere in the world and there is no requirement that a share registry be kept in the Marshall Islands.

Documents filed in the Marshall Islands do not require notarization and/or legalization. As a party to the Hague Convention, the Marshall Islands can also Apostille filed documents for free.

Worldwide Recognition

There are currently 45 Marshall Islands companies publicly traded on leading international stock exchanges in New York and London. These 45 successes further ascertain that the laws of the Marshall Islands are widely accepted by financial institutions worldwide and are sound legislation.

This article was kindly provided by Annie Ng, Head of Asia, The Marshall Islands Registry.

For further information, please contact your nearest Zetland office or e-mail us at intray@zetland.biz.














【本記事はマーシャル諸島登記所のアジア本部、Annie Ngにより寄稿されたものです】

詳しくはゼットランド、intray@zetland.biz までお問い合わせください。

New regulatory requirements for Corporate Service Providers (“CSPs”) in Singapore

1409_SingaporeSingapore has been continuously reviewing and updating its regulatory regime in order to maintain itself as a trusted international financial and business center with robust regulatory frameworks against money laundering and terrorist financing.
As a member of Financial Action Task Force (“FATF”) since 1992, Singapore has to comply with the 40 FATF recommendations and will be assessed by FATF in the second half of 2015. FATF is an intergovernmental body that sets global standards to to combat money laundering and the financing of terrorism and proliferation of weapons of mass destruction.

With rising surveillance on cross border entities and capital transactions to prevent tax evasion, money laundering and terrorist financing, the CSPs have come under closer scrutiny. They face potential risk of abuse by criminals who could set up complex business structures concealing beneficial ownership and illegal transactions.

To enable the CSPs to comply with these revised Recommendations, the Accounting and Corporate Regulatory Authority (“ACRA”) has amended its Act and enacted the ACRA (Service Providers) Regulations to enhance the regulatory framework for corporate service providers, which comprises registered filing agents as well as registered qualified individuals. The new regime will also benefit the corporate service providers industry by raising professional standards.

The guidelines that will be provided by ACRA to assist CSPs to get ready the enhanced CSP regime will contain the internal policies, procedures and controls template as well as Know Your Customer (“KYC”) template form.

Under the new regime, a person who wishes to register as a Filing Agent (“FA”) can be a business entity, company, LLP or LP must have its annual registration renewed. It also must have at least a registered Qualified Individual who is fit and proper, who meets the qualification requirements and experience.

Registered FAs and QIs must perform ongoing customer due diligence and transaction monitoring, and report any suspicious transaction when necessary. FAs and QIs that fall short of the requirements, in breach of a term or condition of registration will face censure, suspension and/imposed a financial penalty.

The enhanced CSP regime is targeted to be implemented in the last quarter of 2014. With the robust regulatory framework against money laundering and terrorist financing, it will further strengthen Singapore’s reputation as a trusted international financial and business centre.

For more information, please contact Su Lee, General Manager of Zetland Singapore at suleec@zetland.biz or +65 65572071.









ゼットランドではシンガポール支店にてシンガポール法人設立及びシンガポールでのビジネスをサポートしています。お問い合わせは直接シンガポール支店(Su Lee suleec@zetland.biz)または日本語はintray@zetland.biz まで。

VAT reform in China is expanding

1409_ChinaIn March 2014, the Ministry of Finance (MOF) announced that it was working with other government departments to further expand the scope of the Value Added Tax (VAT) pilot reform, which started in 2012, to more sectors – including the telecommunications, construction, real estate, finance and living service sectors.
On January 1, 2012, the trial of the value-added tax (“VAT”) Transition from business tax (BT) to VAT (“VAT Transition”) for transportation and certain modern service industries was implemented in Shanghai. In July 2012, the State Council further expanded the pilot area to Beijing and seven other provinces and municipalities in stages: Beijing (September 2012); Jiangsu and Anhui provinces (October 2012); Fujian and Guangdong provinces (November 1, 2012); and Tianjin Municipality, Zhejiang Province and Hubei Province (December 1, 2012). The reform is intended to be completed by the end of the 12th Five-Year Plan (2011-2015).

The objective is to replace the current dual system of indirect taxes – value added tax and business tax – with a single VAT system, which applies to the entire goods and services sector. By the end of last year, the MOF said around 2.7 million enterprises had been covered by the VAT reform, an increase of 160% from the end of 2012, and tax burdens for companies had been reduced by more than RMB 140 billion (US$22.83 billion), up from RMB 42.6 billion in the previous year. According to the MOF, the reform had been effective in reducing double taxation and promoting the service sector’s development.

The VAT Transition program mainly involves the transportation industry and parts of modern service industries. The VAT tax rate is 11% for the transportation industry, 17% for the tangible property leasing services industry, and 6% in the remaining modern service industries. Meanwhile, VAT is imposed on import of services in the domestic process, while zero tax rate or exemption is applicable to exports. A VAT rate of 3% is applicable to the small-scale taxpayers. Foreign invested companies providing the above services are also subject to VAT instead of BT.

The expansion of the VAT programme is therefore likely to be welcomed by the business community, especially multinational companies and other large businesses. The key benefits include:

  • Businesses will be required to register as general VAT taxpayers where their turnover exceeds 5 million yuan of annual sales income. In addition to paying output VAT on their services, they will be eligible to claim input VAT credits for the goods, fixed assets and services they purchase from other VAT taxpayers;
  • Businesses providing services which are subject to the VAT pilot programme will be eligible to claim VAT zero rating or exemption for certain types of services that are exported. This compares favorably with the existing position by which the export of services is generally subject to 5% BT. Likewise, where services are provided from overseas parties to businesses in mainland China, which are registered as general VAT taxpayers, VAT withholding obligations apply. However, input VAT credits may now be claimed for the purchase of these services so as to offset any real VAT cost impact;
  • Small-scale taxpayers will also benefit from a reduction in their tax burden from 5% BT to 3% VAT.

While the introduction of VAT for each of these sectors is challenging, it is clear that officials from the Ministry of Finance and the State Administration of Taxation are ready for the challenge. They have studied international systems and shown a willingness to adopt key principles beneficial to business, and to use international principles to meet the needs of the Chinese economy.

International experience highlights that while the transition to VAT can create ripples in the short-term, the longer-term transition to VAT is expected to be collectively beneficial both to businesses and the economy. China’s new VAT rates of 6 percent and 11 percent, coupled with its existing VAT rate of 17 percent, are all lower than the OECD global average rate of VAT, which now exceeds 18 percent.

The shift to a more modern tax system is consistent with international norms, will help alleviate indirect tax liabilities in B2B transactions, and promote export services. It is an important step in promoting the development of the services sector as part of the government’s 12th Five-Year Plan.

For more information please contact Ms. Phoebe Luo in our Shanghai office at phoebel@zetland.biz.

ゼットランドは上海支店にて中国法人設立及び中国でのビジネス支援を行っております。お問い合わせは直接上海(Phoebe Luo, phoebel@zetland.biz )または日本語は intray@zetland.biz まで

Forming a Firm Foundation – Belize International Foundation

1409_BelizeBelizeThe concept of civil law is fundamentally different from the common law, as it does not know a distinction between legal and equitable rights. Civil law in contrast to common law is not judge made law but its legal norms are enshrined in codes. Civil judges do not create law but implement and interpret the legal provisions contained in the codes. The structure of the Belize International Foundations is very similar to that contemplated for trusts and their administration. The crucial difference lies in the fact that a foundation in contrast to a trust enjoys legal personality and may be set up by unilateral declaration of the founder and the assets of the foundations only need to be endowed rather than be transferred physically. For clients in civil law countries this is of importance as the concept of a trust is not validly recognized and courts may not recognize transfer of assets such as real estate into a trust but they may recognize transfers into foundations.
In accordance to the International Foundations Act, 2010 it provides additional protection where it concerns the subject of bankruptcy. It is established notwithstanding any foreign law, rule or regulation, the foundation shall not be void or voidable due to the fact that it is voluntary and without valuable consideration being given for a disposition to a foundation or to it being established for the benefit of the founder, or the founder’s spouse or children. The Act further states that the foundation endowment shall not be subject to transfer, encumbrance or other restraint solely because of the founder’s bankruptcy, liquidation or insolvency in any action or proceeding at suit of a bankruptcy trustee, receiver or creditor of the founder’s bankruptcy estate.

A Belize Foundation is established upon proper execution of a foundation charter or equivalent document, by a founder and the members of a foundation council, by which a founder makes a disposition of rights, title or interest in property to the foundation for a specific purpose. Some potential uses of foundations are for succession planning and wealth management, discrete structures, discretionary benefits, and charitable or non-charitable purposes. Belize Foundations are exempt from business tax and offer a no tax haven for offshore investors. Not to mention the high level of anonymity offered by the jurisdiction and its geographical location is well placed in terms of access and international relations to other jurisdictions worldwide.

Feel free to contact us at Zetland to assist with the formation of foundations in Belize, whether it is for protection of personal wealth from financial and political instability of your local jurisdiction, tax planning for inheritance assets or estate management.

For further information, please feel free to contact Anju Gidwani, Director of the Belize Office (anju@zetland.biz)



ゼットランドではベリーズ支店にて財団の設立をサポートしております。お問い合わせは現地担当者に直接(Anju Gidwani anju@zetland.biz)または日本語はintray@zetland.biz まで。

Zetland Tax Advisors News
Scope Of UK ATED And CGT Extended
UK bringing more properties within the scope of Annual Tax on Enveloped Dwellings (ATED); and proposing to implement a Capital Gains Tax (CGT) charge on non-residents

Scope Of UK ATED And CGT Extended

UK bringing more properties within the scope of Annual Tax on Enveloped Dwellings (ATED); and proposing to implement a Capital Gains Tax (CGT) charge on non-residents

Annual Tax on Enveloped Dwellings (ATED)

1409_UKTaxSince April 2013, the ATED has been charged where a Non Natural person (NNP) owns a UK residential property valued at more than GBP2m. An NNP can be a UK or non-UK company, partnership or collective investment scheme. The 2014 Budget announced ATED will cover properties valued above GBP1m from April 2015 and above GBP500,000 from April 2016. The existing reliefs for certain property businesses will still apply.

Capital Gain Tax on non-residents regardless of the disposal proceedings

The UK government is currently consulting on the extension of CGT to gains arising from April 2015 to non-UK residents upon disposal of UK residential property. The aim of the proposals was said to ensure both UK and non-UK residents are subject to a comparable rate of tax on such gains.

The rate of the extended CGT charge has not yet been announced. As for the method of collection, the UK government has said that it would prefer a withholding tax (collected by lawyers, estate agents or accounts) upon the disposal.

The consultation also includes proposals to change Principal Private Residence (PPR) relief if more than one residence is owned. PPR currently exempts individuals from CGT on the disposal of their main residence. The consultation proposes the removal of the ability for taxpayers to elect which residence is their residence. This would be replaced by the determination of main residence based on the balance of various factors or the introduction of a definitive test. A further proposal could make PPR relief available to non-UK residents in certain circumstances.

Draft legislation is likely to be published in December 2014.

Action items for you:

A NNP (typically a company) needs to self-assess its ATED liability. There is the option of self-assessing the property value or commissioning a formal valuation. The forthcoming change from April 2015 extending the scope of CGT to include all non-residents who own property directly could further complicate acquiring, owning and later on selling residential property in the UK.

It you already own UK residential property or you are planning to acquire a residential property in the UK, these rules could affect you. Please call us +852 3552 9084 or email us at tax@zetland.biz.







居住者及び非居住者の方でイギリスに不動産をお持ちの方はこの新条例の影響を受ける可能性があります。お問い合わせはゼットランド税務チームまで(tax@zetland.biz)もしくは日本語はintray@zetland.biz までどうぞ。

© 2014 Zetland Fiduciary Group Limited, All rights reserved.