HK’s Trust Amendments to Take Effect from 1st December
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HK TrustHong Kong being the gateway to China, its trust industry has a clear comparative advantage over other locations in Asia.
However, many industry players have long felt that Hong Kong’s premier position is being eroded by its trust law, which is relatively out of date and inflexible. Since its enactment in 1934, the Trustee Ordinance has not been substantially reviewed and amended.
In response to such market sentiment and increasing competition from Singapore, the Trust Law (Amendment) Ordinance 2013 was gazetted in February this year and will take effect from 1st December.
These amendments are intended to strengthen the clarity and certainty of Hong Kong trust law, and grant trustees modernised powers necessary for the efficient management of trusts in Hong Kong.
The Ordinance updates the existing legislation in certain specific aspects of by enhancing trustees default powers, abolishing the rule against perpetuities and changing the rule against excessive accumulation of income. In practice though, in most cases there will be a trust deed drafted to govern the powers and obligations of professional trustees.
Here is a brief summary of the main changes to HK trust legislation:
Introduction a statutory duty of care for trustees when they are exercising their powers in relation to investment, delegation, and appointment of nominees.
General power for trustees to appoint agents, with specified safeguards.
Abrogation of the existing rules against perpetuity in respect of new trusts to be set up.
Abrogation of the rules against excessive accumulation of income in respect of new trusts to be set up, except for charitable trusts.
Granting of more powers to insure trust assets against risk of loss or damage by any event, and pay the premium out of the trust funds.
Foreign forced heirship rules will not affect the validity of a lifetime transfer of moveable assets to a trust expressed to be governed by Hong Kong law.
Trust instruments can no longer exempt a trustee from liability for fraud, wilful misconduct and gross negligence.
Having considered the essential features of the Trust Law (Amendment) Ordinance 2013, the advantages for the settlor in setting up a trust based in HK and with a HK trustee will depend mostly on the settlor’s personal circumstances and country of residence. Some may be attracted by the fact that HK is a major finance and business centre well known internationally compared to “exotic” jurisdictions.
中国大陸へのゲートとして発展してきた香港、他アジア地域の信託法と比べ、香港の信託法は利点が多いことでも知られています。しかしながら香港の信託法は時代錯誤であり且つフレキシブルに対応していないとの批判も聞かれてきました。1934年に信託法が設立されて以来、大きな改定がさせずにきましたが、ここ近年、金融市場のライバルであるシンガポールの台頭を受け、香港でも2013年の2月に信託法への改正案が出され、2013年の12月1日を持って新信託法が執行されます。
これら新信託法では受託者がより効率的に信託を管理できるように改定されています。
弊社では信託管理のライセンスを有し、各お客様のニーズにあわせた信託の設定を承っております。詳しくは弊社までお問い合わせください。
