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Registering a Trust Company in Hong Kong

Updated: Jun 29




What is a Trust in Hong Kong


In Hong Kong, a trust is a legal arrangement where one person (the settlor) transfers ownership of assets to another person (the trustee) to hold and manage for the benefit of a designated person or group of people (the beneficiaries).


Here's a breakdown of the key features:


  • Split Ownership: There's a separation between legal ownership (held by the trustee) and beneficial ownership (held by the beneficiaries). The trustee has the legal right to the assets, but they must manage them according to the trust deed (the document outlining the terms of the trust) for the beneficiaries' benefit.

  • Flexibility: Trusts can be designed for various purposes. You can set up a trust to distribute income to beneficiaries, provide for their education, or manage assets for future generations.

  • Benefits: Trusts offer several advantages, including:

  • Avoiding probate: Assets held in trust can bypass the probate process, saving time and money.

  • Asset protection: Trusts can shield assets from creditors or future claims.

  • Tax planning: Depending on the structure, trusts can offer tax benefits.

  • Succession planning: Trusts are a useful tool for managing wealth distribution after your passing.


Regulations: Trusts in Hong Kong are governed by the Trustee Ordinance (Cap. 29) and common law principles.


Types of Trusts in Hong Kong: There are various types of trusts commonly used, such as:


  • Fixed Interest Trusts: Distribute income or capital in a predetermined way.

  • Discretionary Trusts: Give the trustee the discretion to decide how to distribute benefits.

  • Employee Benefit Trusts: Manage employee benefits like retirement plans.

  • Charitable Purpose Trusts: Hold assets for charitable causes.


Registering a Trust Company in Hong Kong


Here's an overview of the process to register a trust company in Hong Kong:


Eligibility:


  • Your company must be incorporated in Hong Kong and not be a private company as defined by the Companies Ordinance (Cap. 622).

  • At least HK$3,000,000 of your issued share capital needs to be fully paid-up in cash.

  • Your company must be financially sound and able to meet its obligations without relying on the deposit mandated by the Trustee Ordinance.


Application Process:


  1. Application Form: Download the application form, "Application for registration as a Trust Company under Part 8 of the Trustee Ordinance (Cap. 29)" from the Companies Registry website [Hong Kong Companies Registry Trust Company Application Form].

  2. Complete the Form: Fill out the form with your company details and confirm that you meet the eligibility criteria.

  3. Supporting Documents: You'll likely need additional documents as per the checklist provided by the Registry. This may include a valid Business Registration Certificate and statements regarding the fit and proper criteria for directors.

  4. Fees: Prepare the application fee of HK$11,250 and HK$840 for the certificate issuance.

  5. Submission: Submit the application electronically through the e-Services Portal or in hard copy to the Companies Registry.


Result and Timeline:


  • The Registry will typically notify you within 10 working days after receiving your complete application.

  • An electronic Certificate of Registration as a Trust Company will be issued upon successful application.


Additional Resources:



How Bestar can Help


Bestar can be invaluable in several ways when it comes to trusts in Hong Kong:


Choosing the Right Trust:


  • Understanding your needs: We can help you identify your goals for the trust, such as asset protection, wealth distribution, or managing inheritance for minors.

  • Recommending the right type: Different trusts offer varying benefits and drawbacks. Bestar can explain the different options (fixed interest, discretionary, etc.) and advise on the best fit for your situation.


Setting Up the Trust:


  • Drafting the Trust Deed: This is a crucial document outlining the terms of the trust, including beneficiaries, asset distribution, and trustee powers. Bestar ensures the deed is legally sound and reflects your intentions.

  • Ensuring Compliance: We will ensure the trust adheres to Hong Kong's Trustee Ordinance and relevant regulations.

  • Funding the Trust: This involves transferring assets properly into the trust to ensure legal ownership is transferred to the trustee.


Ongoing Trust Management:


  • Advising the Trustee: Bestar can advise trustees on their duties and responsibilities, ensuring they manage the trust assets according to the trust deed and applicable laws.

  • Dealing with Complexities:  We can handle complex situations like tax implications, or amendments to the trust.


Additional Benefits:


  • Tax Planning: Bestar can advise on potential tax implications associated with trusts and explore strategies for tax minimization.

  • Avoiding Probate:  A properly established trust can help your assets bypass probate, saving time and costs for your beneficiaries.

  • Peace of Mind:  Having Bestar guide you through the process can provide peace of mind knowing your trust is set up correctly and aligns with your wishes.


Overall, Bestar can be a valuable partner in establishing, managing, and ensuring the smooth operation of your trust in Hong Kong.






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