Sovereign’s Asia Conference 2026 brought together colleagues, regional partners and industry contacts for a productive programme spanning Hong Kong and Shenzhen, which combined internal knowledge sharing with external on-the-ground engagement in one of China’s most dynamic business regions.

The conference opened in Hong Kong with a series of internal Sovereign sessions focused on Group updates, regional priorities and cross-border opportunities. Discussions covered developments across Hong Kong, Singapore, the Middle East, Cyprus, Malta, Guernsey and wider international markets to allow offices to exchange insights and devise strategies to support clients with increasingly international needs.

A key highlight of the programme was a seminar on ‘Driving Global Business Expansion, which featured perspectives from several Sovereign jurisdictions and service lines and provided a broad overview of structuring, expansion and planning considerations across Asia, the Middle East and Europe.

Once the Hong Kong programme was completed, the team then travelled to Shenzhen for a series of visits and meetings across Futian, the central business district (CBD), and Qianhai, the tech, finance and urban innovation district that serves as the primary gateway for cross-border collaboration with Hong Kong.

The Shenzhen programme included engagements with the GoGBA Business Support Centre run by the Hong Kong Trade Development Council (HTKDC), the Longhua District’s Industry Going Global Alliance platform, the Top China Brand Global Expansion Expo Alliance collaboration, the landmark Qianhai Exhibition Hall, the Qianhai Shenzhen–Hong Kong Youth Innovation & Entrepreneur Hub cross-border incubator, and the Shenzhen office of international law firm DeHeng Law Offices.

These visits provided first-hand insight into the platforms, policy initiatives and professional networks supporting Chinese companies as they seek to expand internationally. From government-backed business support and brand globalisation platforms to innovation hubs and legal advisory networks, the programme offered a timely view of how Shenzhen and the Greater Bay Area continue to strengthen their role in cross-border trade, investment and entrepreneurship.

The trip also reinforced the importance of face-to-face engagement. Meeting with government representatives, industry leaders, start-ups and professional advisers enabled the Sovereign team to deepen relationships, better understand local priorities and identify where the Group’s international network and advisory capabilities can add value for businesses looking beyond their home markets.

This year’s Sovereign Asia Conference was not only an opportunity to share expertise internally, it was also a valuable platform to connect regional knowledge with international opportunity. As businesses across Asia continue to pursue growth across borders, Sovereign remains well placed to support clients with practical, coordinated and informed solutions.

Commenting on the event, Alan Fong, Managing Director Asia, added: “This year’s Asia Conference further reinforced Sovereign’s position as a truly international business, underpinned by strong regional insight. By bringing together colleagues from across our regional offices to Hong Kong and Shenzhen, we were able to deepen collaboration and gain valuable, first-hand perspectives on cross-border growth. These engagements have strengthened our ability to deliver coordinated, practical solutions to clients navigating international expansion, allowing their businesses to grow beyond their domestic markets.”

The post Sovereign Asia Conference 2026: combining Regional Insight with International Opportunity appeared first on The Sovereign Group.

The Monetary Authority of Singapore (MAS) announced that the revised framework for Single Family Offices (SFOs), which provides a simple, streamlined process for SFOs to establish operations in Singapore, was brought into force on 15 June.

The revised framework creates a straight through class exemption from licensing for all qualifying SFOs operating in Singapore, regardless of structure. SFOs that meet the requirements need only notify MAS of their operations and maintain an account with a MAS-licensed bank. They also have to file an annual return with information on the total assets under management and the name of their bank.

This revision follows a public consultation on the revised SFO framework and the policy responses by MAS to the industry’s feedback published in November 2024. Existing SFOs operating in Singapore will have a transitional period of one year to comply with the revised framework.

To operate in Singapore under the licensing exemption framework an SFO must only conduct fund management for, or on behalf of:

• Family members, including family trusts and corporations wholly owned by, and for the sole benefit of the family.
• Charitable organisation(s) funded exclusively by the family.
• Key employees (Executive Directors, Chief Executive Officer, Chief Financial Officer and investment professionals). Assets originating from key employees must not exceed 10% of the total value of the SFO’s assets under management in aggregate.

An SFO can be held via a trust, foundation or any other legal structure, provided the funding of the SFO originates exclusively from members of the same family, whether directly or indirectly, and key employees, who are permitted to own a non-controlling stake of up to 10%.

An SFO must be incorporated in Singapore and the SFO and its fund vehicle(s) must each open and maintain a bank account with a MAS-licensed bank. Foreign incorporated fund vehicle(s) may open and maintain an account with a MAS-licensed bank in Singapore, or with a regulated bank in a jurisdiction that complies with equivalent anti-money laundering and countering of financing of terrorism (AML/CFT) requirements consistent with Financial Action Task Force (FATF) standards.

The term ‘family member’ refers to all lineal descendants of a common ancestor (living or deceased) who are up to five generations removed from the youngest generation that established the SFO in Singapore, including:

• Current or former spouses.
• Adopted children.
• Stepchildren.
• Parents-in-law.
• Siblings-in-law.

It is not MAS’ intention to license SFOs because, unlike licensed fund managers, they manage their own assets or assets belonging to members of the same family. A new SFO must simply file a Notice of Commencement of Business with MAS within 14 days of commencement of its operations in Singapore. An existing SFO that intends to continue operating in Singapore will have one year from 15 June 2026 to satisfy the conditions under the licensing exemption and to file the Notification.

An SFO is required submit its first annual return within four months from the end of its current financial year, in respect of that financial year. There is no requirement to submit an annual return in respect of the SFO’s previous financial year prior to Notification.

A service provider can submit the Notification and annual returns on behalf of an SFO. The Notification must be accompanied by a copy of the declaration signed by a family member who provided the assets to be managed by the SFO, and a director of the SFO. Only one signatory is required if the family member is also a director of the SFO. The service provider cannot provide the signed declaration on behalf of the SFO. Electronic signatures are accepted.

An SFO must ensure that it is able to satisfy all the conditions of the exemption, before submitting its Notification. There is no requirement for an SFO to seek legal advice to support its qualification under the exemption or to provide a legal opinion when submitting its Notification. An SFO is not required to provide the name of its legal adviser as part of the Notification.

“The revised MAS framework is a welcome development for Singapore’s Single Family Office ecosystem, particularly in moving towards a clearer and more practical notification-based regime. While legal advice is no longer formally required as part of the notification process, families should still take care to ensure that the structure, governance, banking arrangements and ongoing compliance are properly thought through from the outset,” said Andrew Galway, Managing Director of Sovereign Management Services in Singapore.

“This is where experienced partners can add real value. At Sovereign, we are well placed to help families navigate the practical implementation of a Singapore SFO, coordinate with suitable professional advisers where needed, and introduce appropriate Singapore banking partners. The framework may be simpler, but getting the structure right at the beginning remains important.”

Banks are also required to conduct the AML/CFT checks on SFOs and their fund vehicles. The customer due diligence and ongoing monitoring checks conducted on an SFO should be subject to the bank’s risk-based approach when it establishes a business relation with its customer.

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A Will remains the default estate planning tool for many Indian families. It is familiar, straightforward and is typically sufficient for simple estates and clear asset distribution. But in practice, a Will typically deals with succession too late because it takes effect only upon death, is subject to the sometimes lengthy and expensive probate process, is vulnerable to legal challenges, and generally lacks the flexibility to cater for family businesses, multiple assets and complex family dynamics.

These limitations are increasingly significant for Indian families whose wealth is no longer held only in India. Many high net worth Indians now have international operating companies, holding companies and investment portfolios based in international financial centres such as Singapore, the UAE, the UK or Guernsey, while family members, real estate and other assets may be spread across multiple jurisdictions worldwide.

In this context, succession planning is no longer just about who receives what. It is about maintaining control and continuity, structuring wealth for long-term protection and succession, while also providing tax efficiency and mechanisms for effective governance and dispute prevention. This might include setting up appropriate vehicles such as Trusts, Foundations, Companies and Partnerships.

Trusts are highly effective tools for asset management and protection, multi-generational succession planning, philanthropy, flexible distributions and provision for vulnerable beneficiaries.

The limitations of a Will

Indian succession law is complex because the applicable rules depend on religion, asset type and location, and whether the deceased left a valid Will. The Indian Succession Act 1925 can apply to all testamentary successions, but intestate successions (where no Will has been made) will be governed by the Hindu Succession Act 1956 or, for other religious communities in India, by distinct legal frameworks that reflect their religious laws and customs.

A properly drafted Will is still important. Recent Indian case law confirms that a Will is not automatically invalid merely because natural heirs, such as a spouse or children, are excluded. The Supreme Court has just reiterated (Parvathi Nairthi v Laxmi Nairthy 2026 INSC 521) that exclusion of natural heirs is not, by itself, sufficient to make a Will suspicious if the Will is otherwise genuine and legally sound.

But that does not mean a Will is dispute-proof. In many family situations, the real dispute is not just about legal entitlement. It is about perceived fairness, control of a business, influence of spouses, access to liquidity, family expectations or mistrust between siblings. A Will may express intention, but it rarely creates an operating system for how the family wealth should be managed after the founder is gone.

Matrimonial Risks

One area of high concern for Indian families is the risk that wealth intended for children or grandchildren becomes exposed to matrimonial disputes or pressure from in-laws. This needs to be approached carefully. A Trust should not be used to defeat legitimate claims, conceal assets or frustrate existing legal obligations. Courts can disregard transactions that are artificial, fraudulent or designed to deprive a spouse or creditor of proper legal rights.

Where assets are settled into a properly constituted Family Trust before any dispute arises, with independent trustees, clear beneficiary classes and genuine fiduciary administration, the Trust can help ensure that family wealth remains within the intended family line and is not fragmented by future personal events.

This is particularly relevant where parents wish to benefit a child without giving them outright ownership. Gifts or inheritances may be vulnerable to poor investment decisions, creditor risk, marital pressure or family disputes. A discretionary Trust can instead provide access to benefit without necessarily giving the beneficiary direct control or ownership of the underlying assets.

Indian matrimonial and domestic laws also recognise specific rights and protections, including a woman’s rights over ‘stridhan’ (a woman’s property) and protections under the Protection of Women from Domestic Violence Act 2005. This is why planning must be done transparently, with Indian legal advice, and with a clear distinction between legitimate long-term succession planning and any attempt to defeat existing legal claims.

High net worth families need structures, not documents

A modern family wealth structure is not just a document. It is a governance framework that is capable of responding to questions that a Will often leaves unresolved:

• Who should control the family business after the founder?
• Should all children benefit equally, even if only one works in the business?
• Should spouses be beneficiaries?
• Should in-laws have access to information or influence?
• How should distributions be made?
• Who decides if and when assets are sold?
• How are younger beneficiaries educated before receiving wealth?
• What happens if a child divorces, becomes insolvent or develops a dependency issue?

The importance of a Trust is that it separates economic benefit from legal ownership and control. The trustee holds the legal title to the Trust assets and administers them for the beneficiaries according to the Trust deed. In India, the Indian Trusts Act 1882 defines and governs private Trusts, while international families may also consider offshore (overseas) Trusts where assets, banking relationships and family members are located outside India.

Singapore Success

Singapore has become a leading jurisdiction for Asian family wealth because it combines legal stability, a sophisticated banking and professional services ecosystem and a regulated trust industry. Licensed trust companies in Singapore are governed under the Trust Companies Act 2005, and MAS states that companies carrying on trust business must hold a trust business licence unless exempt.

Singapore Trusts are built on English common law foundations but its framework has evolved through specific local legislation and progressive court rulings to become a leading global wealth management and succession planning hub. Singapore trust law is supported by the Trustees Act 1967, which sets out key trustee powers and duties.

From a practical perspective, this means an Indian family can establish a Singapore Trust to hold non-Indian assets such as investment portfolios, shares in offshore holding companies, family investment vehicles, or international real estate holding structures.

Singapore also offers tax and estate planning advantages in appropriate cases. Singapore completely abolished estate duty in 2008 and the Inland Revenue Authority of Singapore (IRAS) states that gains from the sale of property, shares and financial instruments are generally not taxable unless they are trading gains or otherwise income in nature.

For Indian families, Singapore is especially attractive where there is already a commercial nexus: regional business operations, investment portfolios booked in Singapore or family office activity in Asia. The Trust structure can also be paired with a Singapore private trust company, family office, investment committee, or holding company, depending on the family’s objectives and tax advice.

Guernsey Gain

Guernsey is another leading jurisdiction outside Asia for the establishment and management of Trusts. It is used by international families, particularly those seeking a common law environment, an effective judicial system, experienced fiduciary providers and strong banking and financial services sector.

Guernsey’s principal trusts legislation is the Trusts (Guernsey) Law 2007, which is supported by a body of case law from the Island’s courts. It is often used for cross-border estate planning and asset protection because Guernsey law accommodates non-resident settlors and beneficiaries, and provides protections against claims based on foreign forced heirship rules.

The Island further offers fiscal neutrality. Trusts with no Guernsey-resident beneficiaries are only liable to tax on Guernsey source income and Guernsey bank deposit interest is not treated as Guernsey source income when received by the trustees of a trust with no Guernsey-resident beneficiaries. This makes it a highly attractive platform for Indian families with assets in the UK, Europe, the Middle East or other financial centres, to operate alongside their Asian advisory and banking relationships.

Singapore or Guernsey

A Singapore Trust may be a suitable structure where the family’s assets, banks, advisers and next generation are Asia-focused. A Guernsey Trust may be more appropriate where the family wants a more European nexus, or continuity with existing international structures and advisers.

In some cases, a family may set up a Trust in one jurisdiction and position the underlying companies, investment accounts or holding vehicles in another jurisdiction. The key is to match the structure to the family’s circumstances: residency and tax residency, asset location, exchange control, future migration plans, family governance needs and the risk profile of the beneficiaries.

A practical structure for Global Families

A typical structure might include:

1. Family Trust – the Trust holds the family’s international wealth for a defined class of beneficiaries, such as children, remoter descendants and selected family members. The settlor decides how the assets in a Trust should be used. This is usually set out in a document called the ‘Trust Deed’, a very flexible instrument that can include directions to the trustee not to make distributions to beneficiaries whose assets are subject to attachment or need protection from marriage breakdown.
2. Underlying Holding Company – to hold bankable assets, shares in family investment vehicles, real estate holding companies or international operating interests.
3. Letter of Wishes – the Trust settlor sets out how they would like the trustees to manage the assets of the Trust and to provide guidance on which beneficiaries should benefit, when and on what terms. A Letter of Wishes can be changed at any time, without the cost and formality of amending the terms of the Will or Trust deed and, unlike a Will, can generally be kept confidential from the beneficiaries.
4. Family Governance Framework – a structure that sets out how a family makes decisions, how family members are kept informed and how family governance integrates with other structures such as a family Trust or family business. The framework typically consists of a family charter and a family council.
5. Indian Tax and Legal Review – for Indian resident settlors or beneficiaries it is essential to ensure that the Trust structure is genuine, properly administered and doesn’t create exposure to tax and potential claims, while protecting personal and business assets held in different jurisdictions with strategies tailored to cross-border requirements.

The Will is not enough

For high net worth Indian families with global assets, a Will is not likely to be sufficient or efficient on its own. A Will transfers assets after death, but a Trust can create a living governance framework that operates before and after death, across generations and jurisdictions.

Used properly, Singapore and Guernsey Trusts can help Indian families consolidate global wealth, reduce succession disputes, protect family assets from fragmentation and create a more disciplined framework for the next generation. The real value is continuity, governance, fiduciary oversight and clarity.

So the question should not be “Have you made a Will?” but “Have you created a structure that is capable of preserving multi-generational family wealth from deaths, divorces and disagreements?”

The post Beyond the Will: how Indian families should build legacy and succession structures that last appeared first on The Sovereign Group.

To strengthen its position as a global business and financial hub, Hong Kong introduced an inward company re-domiciliation regime in May 2025 to provide a simple, cost-effective and court-free pathway for foreign companies to re-domicile in Hong Kong while maintaining their legal identity and ensuring business continuity.

Previously, companies wishing to re-domicile in Hong Kong had to undergo the complicated judicial procedures associated with either winding up in the original domicile and incorporating a new body corporate in Hong Kong or entering a court-sanctioned scheme of arrangement to convert into a wholly owned subsidiary of a Hong Kong incorporated company.

The new regime received a positive market response. A unit of PetroChina Investment (Hong Kong) became the first foreign company to receive a certificate of re-domiciliation from the Companies Registry last October, with a further five companies redomiciling to Hong Kong before the end of the year. This year, a total of 28 companies had redomiciled to Hong Kong up the end of April, including the first public company.

Upon re-domiciliation in Hong Kong, a company retains its legal identity and all existing property, rights, obligations, liabilities, and contractual and legal processes. It enjoys the same rights as other companies of its kind incorporated in Hong Kong and will have to comply with the relevant requirements as other locally incorporated companies under the Companies Ordinance (Cap. 622).

The regime only allows for inward re-domiciliation. Outward re-domiciliation is not available.

Eligibility for Redomicilation

Under the Companies (Amendment) (No.2) Ordinance 2025, the type of company under the law of its original domicile must be the same or substantially the same as the proposed type in the Hong Kong re-domiciliation application.

The re-domiciliation regime applies to four types of companies that can be formed in Hong Kong or their comparable overseas incorporation types:

• Private companies limited by shares.
• Public companies limited by shares.
• Private unlimited companies with a share capital.
• Public unlimited companies with a share capital.

The laws of the original domicile of the company must permit outward redomiciliation, the company’s members must consent to the re-domiciliation, and the application must be made in good faith and must not be intended to defraud existing creditors. In addition, the company must:

• Have been incorporated for at least one financial year.
• Be able to pay all debts that will fall due within 12 months.
• Not be in liquidation or in the process of being wound up, and no such proceedings against the company should be ongoing or pending.
• Not be used for unlawful purposes or purposes contrary to the public interest.

Application for re-domiciliation

The company is required to submit an application form together with the following supporting documents to the Hong Kong Registrar of Companies:

• Re-domiciliation Form (NNC6).
• Notice to Business Registration Office (IRBR5).
• A legal opinion from a qualified legal adviser in the company’s original domicile issued within 35 days of the application date.
• A copy of the proposed articles of association to be adopted by the company.
• Certified copies of the company’s certificate of incorporation and constitutional documents.
• A members’ resolution duly passed by at least 75% of the eligible members of the company.
• Accounts of the company dated no more than 12 months prior to the application date.
• A certificate confirming the company’s fulfillment of the eligibility criteria issued by the board of directors of the company within 35 days of the application date.

The company will need to pay a prescribed fee of HKD6,050 (digital form) or HKD6,725 (hard copy form) together with its application.

Approval procedures

If documents and particulars required for the re-domiciliation application are in order, the applicant should generally be registered as a re-domiciled company within two weeks. The naming restrictions and requirements under the Hong Kong Companies Ordinance are applicable to a re-domiciled company.

Upon approval, a certificate of re-domiciliation will be issued to the company. From that date, the re-domiciled company will be regarded as a company incorporated in Hong Kong and will be required to have a registered office in Hong Kong and appoint a company secretary.

Upon the registration of a non-Hong Kong corporation as a re-domiciled company, the re-domiciliation form and the proposed articles of the company will be made available for public inspection in the Companies Register together with the certificate of re-domiciliation.

Hong Kong profits tax will apply only to profits arising in or derived from Hong Kong from a trade, profession, or business carried on in Hong Kong.

The Inland Revenue Ordinance (Cap. 112) has been amended to address transitional tax matters, including the fair deduction for trading stock, specified types of expenditure and depreciation allowances. If the company’s actual similar profits are also taxed in Hong Kong after re-domiciliation, the Hong Kong government will offer unilateral tax credits to eliminate any double taxation.

Post-approval procedures

The re-domiciled company must deliver to the Registrar of Companies within 15 days a return in the specified form (Form NSC21) to report the statement of capital of the company as at the re-domiciliation date.

A re-domiciled company is required to de-register from its original domicile within 120 days of the issuance of the certificate of re-domiciliation in Hong Kong. Documents evidencing the deregistration must be submitted to Hong Kong Registrar of Companies and failure to comply could result in revocation of the re-domiciliation registration.

The post Hong Kong’s Company Re-domiciliation regime – One Year On appeared first on The Sovereign Group.

Financial Secretary Paul Chan delivered Hong Kong’s 2026-27 Budget on 25 February. Themed as ‘Driving High‑quality, Inclusive Growth with Innovation and Finance’, the Budget is focused on sustaining growth momentum, advancing long‑term capability building and positioning Hong Kong to capture new opportunities.

Hong Kong’s economy grew by 3.5% in 2025, marking the third consecutive year of expansion, supported by strong external trade and a recovery in domestic demand. It is forecast to grow by 2.5%-3.5% in the year ahead, while the headline inflation rate is expected to remain below 2%.

Chan said a buoyant economy and capital market had driven higher tax revenues, while a reinforced fiscal consolidation programme had helped public finances improve sooner than expected. To preserve the SAR’s simple and low-rate tax regime, the government will introduce and extend a series of modest tax relief measures for households in 2026, along with a package of preferential tax policies for targeted businesses and industries.

To raise revenue, the government is to raise stamp duty rates from 4.25% to 6.5% on high-value residential property transactions valued above HKD100 million (USD12.8 million). It will also continue to implement the OECD Pillar Two Global Minimum Tax, which has been in force since financial years (FYs) starting on or after 1 January 2025.

Under the rules, multinational enterprise (MNE) groups with consolidated annual revenue of at least €750 million are required to pay top-up taxes if their effective tax rate falls below the minimum 15%. According to Chan, implementation of these rules is expected to bring in an additional HKD15 billion (USD1.9 billion) in tax revenue per year starting from FY 2027-28.

To align Hong Kong’s economic future with its development goals, the focus of investment in the Budget was in the innovation, artificial intelligence and international financial sectors, with initiatives including:

• Asset and Wealth Management – to increase the number of single-family offices in Hong Kong, which currently exceeds 3,300, and attract funds to set up in Hong Kong, the HK government will introduce an amendment bill in the first half of this year to enhance the tax regime and expand the scope of ‘fund’ to cover specific funds-of-one, as well as classifying digital assets, precious metals, specified commodities as qualifying investments eligible for tax concessions; it will also legislate to enable privatisation of Real Estate Investment Trusts (REITs) and to amend the law next year to provide stamp duty waiver for transferring non-residential properties into REITs seeking to list.
• Corporate Treasury Centres (CTCs) – the HK government to relax criteria for stamp duty relief for intra-group transfer of assets, applicable to instruments signed from Budget day. Further measures to strengthen Hong Kong as a base for CTCs to be announced in the middle of this year, including additional tax incentives, greater flexibility for CTCs and associated companies, and the introduction of a pre-approval mechanism.
• Company Re-domiciliation Regime – with the approval of 22 re-domiciliation applications since commencement of the regime in 2025 and a further 20 applications being processed, the government will step up publicity to attract more enterprises to establish in Hong Kong.
• Development of Digital Assets – CMU OmniClear, which operates Hong Kong’s central securities depository (CSD) for fixed-income, to establish digital asset platform in the year to support issuance and settlement of digital bonds. The government will introduce a bill this year to establish licensing regimes for, among others, digital asset dealing and custodian service providers.
• Intellectual Property Trading – the HK government to introduce legislation this year for tax deduction arrangements for capital expenditure in purchasing intellectual property; to invest HKD28 million in the Hong Kong Technology & Innovation Support Centre for patent evaluation and implement a two-year Pilot Patent Valuation Support Scheme; to invest HKD52 million for Intellectual Property Academy on two-year pilot.
• Trade Centre – the HK government to introduce amendment to tax law this year for preferential policy packages, including preferential arrangements on land grants, financial subsidies and tax incentives. Preferential tax rates at half rate or 5%; to set up Advisory Committee on Tax Policy; to set up cross-sectoral professional services platform to support Mainland enterprises expanding overseas using Hong Kong as a base; and to invest HKD100 million to attract international, large-scale exhibitions with new elements.
• Mutual Market Access – the HK government to expedite the launch of Chinese Government Bond futures in Hong Kong, inclusion of REITs in mutual access, and inclusion of RMB trading counter under Southbound Stock Connect.
• Driving AI+ Development – the HK government to establish Committee on AI+ and Industry Development Strategy to transform industries; the Hong Kong AI Research & Development Institute to operate in second half of year to support R&D and transformation of outcomes.
• Small and Medium-sized Enterprises (SMEs) – the HK government to inject a further HKD200 million into the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD Fund) to assist Hong Kong-based companies capitalise on opportunities in the Chinese Mainland and ASEAN countries, and raise the funding ceiling of ‘Easy BUD’ to HKD150,000 per application; to increase the total loan guarantee commitment to enterprises through the SME Financing Guarantee Scheme by HKD20 billion and extend the application period for the 80% Guarantee Product to the end of March 2028 and the application period for the principal moratorium arrangement to mid-November this year.
• Aviation, Shipping and Logistics – the HK government to launch a Future Innovative Logistics Acceleration Scheme this year to enhance interconnectivity of logistics data; to introduce legislation this year to enhance tax-concession measures for maritime services industry, provide half-rate tax concession to eligible commodities traders, revamp existing ship registration arrangements, extend current arrangements under Air Transhipment Cargo Exemption Scheme.
• Supporting Emerging Industries – the HK government to set up HKD10 billion I&T Industry-Oriented Fund to begin operation this year to channel market capital into strategic and emerging industries, including life and health technology, AI and robotics, and future industries; to review and enhance tax arrangements for R&D expenditures; to push for R&D and applications in embodied AI, quantum technology and new materials; to direct Office for Attracting Strategic Enterprises (OASES) to attract aerospace enterprises and Stock Exchange of Hong Kong (HKEX) to review listing requirements for aerospace enterprises; Hong Kong Investment Corporation (HKIC) and enterprises to establish Hong Kong RISC-V Alliance, forging collaboration among industries, academia and the investment sector in microelectronics.
• Gold Trading – the HK government to explore tax concessions for eligible institutions conducting gold trading and settlement in Hong Kong.
• New Industrialisation – the HK government to launch a New Industrialisation Elite Enterprises Nurturing Scheme this year to support high-growth enterprises; to allocate HKD220 million to establish the first national manufacturing innovation centre outside the Mainland at Yuen Long InnoPark, which will be led by the Hong Kong Microelectronics Research and Development Institute and focus on semiconductor R&D.
• Northern Metropolis for I&T – the HK government to set aside HKD10 billion each for the Hetao Hong Kong Park, the San Tin Technopole and the Hung Shui Kiu Industrial Park to accelerate the megaproject through the government’s partnership with developers and tech enterprises.

The government has launched a public consultation on the implementation of the OECD’s new Crypto-Asset Reporting Framework (CARF) and related amendments to the Common Reporting Standard (CRS 2.0) for the reporting and automatic exchange of information in respect of crypto-assets. It plans to complete the necessary legislative amendments in 2026 to implement the CARF rules to be effective on 1 January 2027 and the CRS 2.0 rules on 1 January 2028.

The government is committed to expanding Hong Kong’s network of Double Taxation Agreements, which currently comprises 55 agreements, including those signed last year with Jordan, Maldives, Norway and Rwanda.

In view of the evolving global tax environment, the Financial Secretary is to establish and chair an Advisory Committee on Tax Policy to gather views from commercial, industrial and professional sectors, so that Hong Kong’s tax policy can reinforce economic development.

2026 marks the first year of China’s 15th Five-Year Plan. Chan announced that Hong Kong will, for the first time, formulate its own local five-year plan, indicating that the region’s development trajectory will align more closely with national policy priorities in the coming years.

The post Hong Kong Budget focuses on innovation, AI and finance appeared first on The Sovereign Group.

Hong Kong’s status as the preeminent supply chain ‘super-connector’ for Chinese Mainland enterprises to expand overseas and for global companies to access the market and regional supply chains has been reaffirmed by a major new US-Hong Kong research initiative published in December.

Commissioned by the Hong Kong Trade Development Council (HKTDC) and conducted by the Bay Area Council Economic Institute of the United States, the study analysed the ways in which the shift in US trade policy has triggered the accelerated reconfiguration of global supply chains.

Titled ‘Strategically Leveraging Supply Chains to Access the Asian Market’, the study noted that heightened geopolitical tensions, evolving trade policies, environmental pressures and technological advancements had served as a collective catalyst for a supply chain revolution that was impacting every aspect of the global economy.

In the wake of this mass recalibration, companies are having to reassess their operations and look to manage previously unencountered risks, ensuring that resilience is now prioritised alongside cost management and consistent competitiveness. This, it said, will inevitably impact the primacy of Asia’s role within this transformed landscape.

While subject to the same US reciprocal tariffs as the Chinese Mainland, Hong Kong as a stand-alone customs territory maintains a zero-tariff rate distinct from the Mainland and does not impose reciprocal tariffs on the import of US goods.

This and the exemption from tariffs for qualified goods exported from Hong Kong to the Chinese Mainland under the Closer Economic Partnership Arrangement (CEPA) has positioned Hong Kong as a key potential platform for US sales to the China market. In 2018, the CEPA was extended extension to include trade facilitation measures in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).

To qualify for the preferential treatment, goods exported to the Chinese Mainland require a Certificate of Hong Kong Origin–CEPA (CO–CEPA) issued by the Hong Kong SAR’s Trade and Industry Department or by one of several Government Approved Certification Organisations (GACOs) such as the Hong Kong General Chamber of Commerce.

International companies with a qualified Hong Kong presence are eligible to leverage CEPA’s benefits when accessing the Chinese Mainland market. This can be done by establishing a legal entity in Hong Kong or by partnering with or acquiring a qualified Hong Kong company.

The manufactured products produced in Hong Kong and sold in the Mainland market will not be subject to Mainland tariffs. Qualifying companies are required to meet Rules of Origin thresholds that may consider where production occurs, apply a change in tariff heading (CTH) approach, and consider local content in a value-added requirement.

For zero-tariff treatment in some product categories, a company’s products must undergo “substantial transformation” in Hong Kong, with a value-added of at least 30%. Companies can subcontract for processing outside Hong Kong and add final finishing to a product in Hong Kong before its export to the Mainland.

This would, for example, allow a US company to establish a base of operations in Hong Kong, develop production partnerships in the GBA, and export those products to the Chinese Mainland under favourable CEPA terms.

When structuring contracts or joint ventures with Chinese Mainland partners, including those in the GBA, the foreign company’s Hong Kong entity has the ability to select Hong Kong as the governing law and seat for arbitration, assuring access to the city’s common law framework and significantly mitigating risk with regard to trade, investment, intellectual property, and other commercial disputes.

Service providers can also access CEPA benefits. Currently, the Chinese Mainland has fully or partially opened up 95.6% of its service sectors to Hong Kong companies. Benefits include the allowance of wholly-owned operations, relaxed restrictions on equity shareholding, reduced registered capital requirements, and relaxed restrictions on geographic location and business scope.

The critical step is to incorporate a legal entity in Hong Kong. Under CEPA’s non-discrimination principle, a foreign-owned company registered in Hong Kong will be treated as a “local Hong Kong service provider” and eligible for CEPA benefits.

The entity could be a regional headquarters, a project-specific company, or a joint venture with a local partner. With the recent removal of a qualification requirement of three years of substantive operations in Hong Kong, newly established companies can access these benefits almost immediately.

Another evolution of the original CEPA provides (with some exceptions) national treatment for investors from Hong Kong in all non-service sectors including manufacturing and investment in assets. Investment protection measures apply to both the service and non-service sectors, including restrictions on the expropriation of assets, the transfer and return of investments, and the simplification of procedures relating to investment. The Trade & Industry Department provides Hong Kong Investor (HKI) certificates to qualifying Hong Kong entities.

The report cited the electric vehicle (EV) sector as one example where Hong Kong is already playing a pivotal role in the regional supply chain transformation process. As mainland-based automotive manufacturers, as well as their global counterparts, prioritise the expansion of EV and battery production in Southeast Asia, Hong Kong has served as a crucial investment and financial hub, acting as an effective conduit for significant capital to be channelled into countries such as Indonesia, Thailand and Malaysia.

More generally, recent investment data also clearly indicated that Chinese Mainland companies are increasingly utilising Hong Kong as the support platform for many of their regional projects. This outcome bolstered by Hong Kong’s wide-ranging financial and professional services sectors, as well as the city’s agility in adapting to technological transformation and the evolving regulatory landscape.

“The adoption of strategies such as reshoring, nearshoring and developing redundant supply routes by many global businesses is accelerating the regionalisation of supply chains,” said Sean Randolph, Senior Director of the Bay Area Council Economic Institute. “Companies are diversifying their manufacturing bases, while relocating certain activities from China to other countries in Southeast Asia, India and Mexico – adopting the so-called ‘China+1’ strategy in order to ensure resilience and reduce risk exposure.

“At the same time, despite the ongoing bilateral friction, it is notable that many US companies remain deeply engaged with China. This is largely on account of the country’s unique concentration of suppliers – especially in the case of regions such as the GBA – which cannot be easily replaced or replicated elsewhere.

“Indeed, a number of recent surveys and announcements – including major Chinese Mainland investment commitments by businesses of the stature of Nvidia and Apple – have clearly demonstrated that, for many US businesses, China remains a key locale, with their engagement at least partly due to the indispensability of the broader regional supply chains,” said Randolph.

This new HKTDC research highlights Hong Kong’s vital roles as both a ‘super-connector’ and a ‘super-value-adder’, while confirming the city’s status as the key enabler for any mainland enterprise looking to expand overseas, and simultaneously serving as a gateway for any global company looking to access the revitalised regional supply chains and the China market.

“As companies reshape supply chains and seek resilient gateways into the region, Hong Kong remains one of the most efficient and trusted locations to establish a presence,” said Alan Fong, Sovereign Managing Director – Asia. “Hong Kong is a key strategic hub where regional, Mainland and global businesses continue to build and expand their operations.”

Sovereign Hong Kong can support clients through:

• Hong Kong company incorporation and redomicilation.
• Full corporate administration and management.
• Professional company secretarial and governance services.
• Accounting, HR, payroll and economic substance services.
• Integrated business and wealth structuring.

With Hong Kong’s strategic role strengthening, now is an ideal time for businesses and families to explore new opportunities in both the city and the wider Greater Bay Area. To learn how we can support your Hong Kong set-up or expansion, please contact us at below.

The post Hong Kong’s role as ‘super-connector’ in global and regional supply chain appeared first on The Sovereign Group.

Why a company secretary is required in Hong Kong

Understanding the requirements for a company secretary in Hong Kong is crucial for any business owner or director.

The role of a company secretary is to ensure that the company complies with all statutory financial and legal requirements under applicable laws and regulations in Hong Kong. These include, among others, the Companies Ordinance, Business Registration Ordinance and the Inland Revenue Ordinance.

The Companies Ordinance sets out clear guidelines to ensure that every company appoints a qualified and capable company secretary.

Who can act as a company secretary in Hong Kong

A company secretary can be either an individual or a corporate body. A company secretary who is a natural person must be aged 18 or above and must be ordinarily resident in Hong Kong. Company secretaries who are natural persons are only required to report their correspondence addresses to the Registrar of Companies instead of their usual residential addresses.

A company secretary who is a corporate entity must be a Hong Kong-registered company, or an overseas incorporated company registered in Hong Kong as a non-Hong Kong company, that has its registered office or principal place of business in Hong Kong.

If the secretary is a corporate entity, it must further hold a Trust and Company Service Provider (TCSP) licence issued by the Companies Registry.

A private local limited company must have at least one director who is a natural person and one company secretary. The Companies Ordinance expressly prohibits a sole director from acting as the company secretary of the same company. It also provides that no private company having only one director may have a body corporate as its company secretary if the sole director of that body corporate is also the sole director of the private company. If there are multiple directors, one director may take on the role of company secretary.

For listed companies, the requirements are even more stringent: the company secretary must be a member of the Hong Kong Chartered Governance Institute (HKCGI), a qualified solicitor or a certified public accountant.

The HKCGI, formerly known as The Hong Kong Institute of Chartered Secretaries (HKICS), is the only qualifying institution in the Chinese mainland and Hong Kong for the internationally recognised Chartered Secretary and Chartered Governance Professional qualifications.

Why many companies appoint a professional company secretary

Given the complexity and importance of the company secretary role, many companies choose to appoint a professional corporate services provider.

Sovereign Trust (Hong Kong) is a Hong Kong-registered company that has its registered office in Hong Kong. It holds a Trust and Company Service Provider (TCSP) licence issued by the Companies Registry.

We offer expert company secretarial services and registered office facilities to Hong Kong companies, ensuring that your business meets all statutory requirements and operates smoothly and compliantly.

Our company secretarial services include:

• Acting as named company secretary of the Hong Kong company
• Preparing annual returns and filing at the Companies Registry
• Preparing documents in respect of annual general meetings
• Keeping and updating statutory books and records
• Preparing documents in relation to share transfers
• Amending articles of association under Hong Kong law and filing at the Companies Registry
• Preparing documents and filing at the Companies Registry in respect of:
  • Change of director or company secretary
  • Change of registered office address
  • Change of name
  • Share allotment
  • Consolidation or subdivision of share capital

If you are unsure whether your current arrangements meet the legal requirements, or if you need help appointing a qualified company secretary, contact us today for a consultation.

The post What Are the Requirements for a Company Secretary in Hong Kong? appeared first on The Sovereign Group.

Companies, wherever they are based, are required to process employee salaries accurately and on time. They must also ensure their income tax and social security compliance in terms of withholding, calculations and reporting. Every country’s employment and tax system is different.

Payroll is more than a routine task – it’s a strategic function that impacts compliance, employee satisfaction and business reputation. This Guide explores why outsourcing payroll is a smart move for businesses operating in Hong Kong.

What Makes Payroll Management in Hong Kong So Complex?

Hong Kong’s payroll regulations are governed by the Hong Kong Employment Ordinance (Cap. 57), Inland Revenue Ordinance and the Mandatory Provident Fund Schemes Ordinance (MPFSO).

The Employment Ordinance is the primary legislation governing employment practices in Hong Kong. It sets out the rights and obligations of both employers and employees, covering key aspects such as wage payment, rest days, statutory holidays, paid annual leave, sickness allowance, maternity and paternity protections, and end of year payments. It also covers employment contracts, termination procedures, severance and long service payments, and protections against anti-union discrimination.

The Inland Revenue Ordinance is Hong Kong’s main tax law, governing taxes like salaries tax, profits tax and property tax. The salary tax system in Hong Kong employs a progressive tax rate structure that is applied to net chargeable income, calculated by subtracting deductions and allowances from total income.

Every employer in Hong Kong must submit a Form BIR56A return annually for the company, as well as individual annual returns (Form IR56B) for all employees, reporting all income regardless of whether they work in Hong Kong or overseas. Employers must submit also submit an IR56E form to the IRD within three months of a new employee’s start date to officially report their commencement of employment.

The Mandatory Provident Fund (MPF) is Hong Kong’s compulsory retirement savings scheme, which requires employers, employees and self-employed individuals to make regular contributions.

Employees who earn below HKD7,100 per month are exempt from contributions, but the employer must contribute 5% of the monthly income. For employees earning between HKD7,100 and HKD30,000 per month, both employer and employee must contribute 5%. For employees earning HKD30,000 or above per month, contributions are capped at HKD1,500 each for both employer and employee.

Employers must enrol employees in an MPF compliant scheme within 60 days of employment and make timely contributions. Adherence to the MPF regulations is critical for payroll compliance and also shows commitment to investing in your employees’ long-term financial future.

In addition to complying with tax reporting by filing employer’s and employee’s returns annually (Forms BIR56A and IR56B), and notifying the IRD of new hires, terminations or departures, employers must maintain accurate payroll records for at least seven years, including wage details, leave records, and MPF contributions.

How Is Payroll Set Up and Managed in Hong Kong?

The first stage will involve registering the employer and its employees with the local tax office and the government employment department, recording employment notices and contracts, obtaining bank details of the employer and employee and, finally, inserting all that information in the payroll system.

The payroll team must process the monthly payroll for salaried employees. It is responsible for creating, maintaining and updating all payroll data, which can include overtime, commissions, expenses, statutory sickness, maternity and other employee benefits.

Regular payroll tasks include calculating wages, deductions, and bonuses, updating records, managing timesheets and ensuring compliance with tax and employment laws. The payroll team will also assist employees with any payroll queries and liaise with tax authorities.

There is no legal requirement under the Employment Ordinance for employers in Hong Kong to provide payslips to employees, but it is a recommended practice. Payslips provide employees with a detailed breakdown of wages, including basic salary, overtime, allowances and deductions, allowing them to verify that they are being compensated correctly.

Accuracy comes from double-checking calculations, reconciling records regularly, understanding tax rules and keeping up to date with legislation changes. Payroll professionals must stay informed and apply updated labour, income tax, social security, pension and any other statutory rules at the right time. Failure to comply can lead to incorrect payments for employees, regulatory fines and penalties, and reputational damage.

Payroll also involves highly sensitive employee data, including employment records, salaries, tax and bank details. Confidentiality is crucial; access should be restricted and data should be handled in line with company policies and regulations under the Personal Data (Privacy) Ordinance, Cap 486 of the Laws of Hong Kong (PDPO).

If your Hong Kong company has an establishment in the European Union or European Economic Area (EEA) where personal data is processed, you must also comply with the EU’s General Data Protection Regulation (GDPR), which has extra-territorial application and imposes greater data protection obligations, as well as substantial penalties for violations.

Why Should Businesses Outsource Payroll in Hong Kong?

Staying on top of these payroll requirements can be challenging, especially for companies without dedicated HR or finance teams. Experienced payroll managers are well remunerated and will also require investment in systems.

Outsourcing your payroll, particularly when setting up business or expanding into a new market, can free up valuable time and resources, while also ensuring that all your obligations and responsibilities are met in a timely and efficient manner in every jurisdiction of operation.

Sovereign Trust (Hong Kong) provides a comprehensive but flexible outsourced payroll service that can be scaled and structured to a client’s specific requirements. You will able to submit data and access real-time payroll information via an online portal, and we will provide the payroll professionals and specialised software to process this information, including calculating wages, handling tax deductions and contributions, issuing payslips, making mandatory reports and managing pension schemes.

Outsourcing payroll to a trusted provider in Hong Kong offers several advantages:

• Expertise in local regulations – ensures full compliance and reduces risk.
• Timely, accurate payroll processing – enhances employee trust and satisfaction.
• Efficient management of MPF scheme ¬– MPF scheme set-up and trustee services, employee enrolment and monthly contribution submissions.
• Comprehensive record-keeping – supports Hong Kong audits and reporting.
• Scalable solutions – we can adapt and scale up our payroll solutions as your business grows.

Sovereign’s Accounting and Payroll Services are tailored to the unique needs of businesses in Hong Kong. Let us handle your payroll complexities so you can focus on what matters most – growing your business. Contact Sovereign Trust (Hong Kong) today for a customised payroll solution.

The post How to Outsource Payroll in Hong Kong: A Strategic Guide appeared first on The Sovereign Group.

GDP per capita has risen from less than USD700 in 1986 to almost USD4,500 in 2023, while foreign investment continues to flow steadily into the country despite ongoing fluctuations in the global economy, reaching USD18.4 billion in the first five months of 2025, a 51% increase year-on-year.

This economic success has seen the emergence of a new generation of entrepreneurs, with Vietnam becoming a hotspot for start-up activity in Southeast Asia. Vietnam boasts over 930,000 active enterprises, with 98% classified as small and medium-sized enterprises (SMEs). The private sector contributes about 60% of GDP and employs 85% of the workforce.

At the same time, the rate of growth of personal financial assets (PFA) has outpaced that of other Asian countries in the past ten years. Vietnam’s wealth creation is booming. According to Henley & Partners, the number of millionaires nearly doubled to 19,400 between 2013 and 2023, which was the fastest growth worldwide. Knight Frank’s Wealth Report 2025 estimates that Vietnam now has 5,459 individuals worth over USD10 million.

As this sector matures, however, families are beginning to confront a more complex challenge — how to protect what they have built up and pass it on smoothly to the next generation. Estate planning and succession in Vietnam can be a difficult and complex area, particularly with so many high-net-worth families owning operating businesses.

Why succession planning is becoming critical for Vietnamese families

Vietnam’s first-generation wealth creators are now in their 50s and 60s. Many own successful family businesses or substantial real estate portfolios, but few have formalised plans for succession. Most rely on wills, informal understandings, or company shareholdings held in personal names — all of which can become complicated when families grow, relocate or hold assets overseas.

Vietnam’s Civil Code includes forced heirship provisions that guarantee ‘reserved shares’ for close relatives, regardless of testamentary wishes. While this protects dependants, it can also fragment business ownership or create disputes among heirs.

Although Vietnam has no distinct Inheritance Tax, inheritance is considered a form of taxable personal income under the Personal Income Tax (PIT) Law. PIT applies at a rate of 10% on taxable inherited assets valued at VND10 million (c. USD400) or more per transaction. It is worth noting that the Ministry of Finance is proposing to double the value threshold to VND 20 million. If this proposal is accepted, the increased threshold may be applicable from 1 January 2026.

Inheritance tax is determined and assessed when the beneficiary registers ownership or usage rights for the inherited assets according to type:

• Real Estate – when the beneficiary registers ownership at the Land Registry Office.
• Securities (stocks, bonds and other financial investments) – when ownership is transferred at a depository or on a trading platform.
• Business shares or capital contributions – when the beneficiary updates shareholder records in the company’s business registration.
• Cash and other financial assets – when the beneficiary formally receives the inheritance in Vietnam through legal documentation.

In the case of real estate inheritances only, certain close family members are exempt from inheritance tax including spouses, siblings, biological or adopted children, parents, parents-in-law and children-in-law, grandparents and grandchildren.

An added complication is that foreigners face restrictions on property ownership in Vietnam. Foreigners are not entitled to hold ownership of land or buildings in Vietnam, except in cases permitted by the 2023 Law on Housing and the 2024 Law on Land, which established rules under which foreigners can now acquire land-use rights or own assets like houses or apartments subject to specific regulations.

For real estate that does not meet the conditions, the immovable property must either be sold, in which case the foreign beneficiaries can only inherit the amount equal to the value of the property, or the ownership can be converted into an allocation for residential land or a lease for commercial land for a maximum term of 50 years, which is renewable.

However, Vietnam’s government is working to make things easier for overseas Vietnamese. The amended Land Law 2024, effective in 2025, grants overseas Vietnamese full property ownership rights, equal to that enjoyed by domestic citizens, thus simplifying transactions and encouraging investment in local real estate.

The legal system of Vietnam is fundamentally a civil law system and trusts are not recognised under Vietnamese law. The lack of a domestic trust framework means families have limited tools to plan beyond simple inheritance. As a result, many Vietnamese families are now looking beyond their borders for more flexible and internationally recognised solutions.

Why trusts are a preferred structure for modern global families

The best alternative to a will is to set up a trust during lifetime. A trust is established when an individual, known as the ‘settlor’ makes a transfer of assets to a trustee, who then holds and manages these assets for the benefit of chosen family members or other beneficiaries.

The practical advantages of a trust are gained from the distinction that is drawn between the legal owner of property, the trustee, and those people that have the use or benefit of the property, the beneficiaries. Importantly, the assets transferred into trust are no longer regarded as being the personal possessions of the settlor.

Trusts provide a highly effective mechanism for families to protect their assets, ensure smooth succession and manage family dynamics. A well-constructed trust can place the right assets, in the right hands, at the right time. They offer the flexibility, creativity and control that a will cannot, and allow the settlor to organise their wealth to ensure that they can maximise its effectiveness during their lifetime and beyond.

Generally, the trust terms are set out in a trust deed, which will include the names of the beneficiaries and how they can benefit from the trust fund. The standard form is a ‘fixed interest trust’, where the beneficiaries may be given a right to income and/or capital, perhaps on the occurrence of a specified event.

However, a ‘discretionary trust’ can provide a mechanism for managing property that can adapt as conditions or family circumstances evolve. No beneficiary has any fixed or absolute interest in the trust assets, allowing the trustees to adapt distributions based on beneficiaries’ changing circumstances, such as financial needs or personal situations.

The settlor can guide the trustee in relation to his intentions by a ‘letter of wishes’. This is used to guide trustees on how the income and assets should be used – to support future generations, to support business expansion, or for education or philanthropy. The letter of wishes can be updated throughout the settlor’s lifetime without having to amend the trust deed.

If settlors are not comfortable with the idea of handing over complete control over their assets to a third party, a number of trust jurisdictions, including Singapore, have legislated to reserve powers generally given to the trustee. A common reserved power, particularly in Asia, is the ‘reserved power over investments’, which enables the trustee’s role in investing the trust fund to be divested to the settlor or another third party. This offers a practical solution in situations where a settlor is more knowledgeable or experienced in managing their investments and wants to continue to do so even after they cease to be the legal owner of the trust assets.

Private Trust Companies (PTCs) also provides a mechanism for the settlor and their family to retain influence over the management of trust assets without compromising the validity of the trust. A PTC is a company that is formed solely for the purpose of acting as trustee of a single trust or a group of related trusts.

This structure gives the family control over asset management, succession planning and distribution policies, ensuring that the trust aligns with their long-term interests. Family members can hold a majority of board positions and roles can be created for the next generation to learn stewardship skills.

Offshore vs. Onshore considerations

Given the absence of recognition of trusts under Vietnamese law, Vietnam-resident expatriates and Vietnamese nationals with foreign assets will need to assess the different countries worldwide that have enacted trust legislation, which can vary in quality and suitability.

When selecting the best offshore jurisdiction for establishing a trust it is important that it should offer:

• A strong tradition of enforcing trusts.
• An English common law system.
• An established reputation for trust business.
• Modern legislation, including contemporary trust concepts.
• Low or no taxation for trusts.

Hong Kong and Singapore score highly in all these areas and both have the added benefit of a convenient location in Southeast Asia. Further afield, Sovereign generally recommends Cyprus, Gibraltar, Guernsey, the Isle of Man, Malta and Mauritius as among the best available options. Sovereign is fully licensed to act as professional trustees in all these jurisdictions.

Beyond wealth transfer: preserving family legacy

For families who have worked hard to build success, the question is how best to ensure that their legacy endures. A lifetime of work can be jeopardised by inadequate succession arrangements, fragmented ownership or disputes between heirs. Trusts offer a framework to consolidate assets, manage transitions and preserve family unity.

An offshore trust that is set up in a tax neutral jurisdiction may offer substantial tax efficiencies, but for Vietnamese families with assets or investments abroad, the principal a properly structured offshore trust offers many advantages:

• Cross-border flexibility – Trusts can hold diverse assets, from company shares to real estate and investment portfolios, across multiple jurisdictions under one legal structure.
• Continuity and control – a trust allows assets to be managed and distributed according to the settlor’s wishes, without the delays or complications of probate in multiple countries.

• Continuing a family business – placing shares of a family business in a trust prevents the unnecessary liquidation of a family company on the owner’s death and ensures that their wishes are observed.

• Confidentiality: Unlike wills, which become public on death, trusts are private arrangements between the family and the trustees.

• Asset protection: as the legal ownership lies with the trustees, the trust assets are generally insulated from claims by creditors, litigants and divorcing spouses by providing a layer of protection against third-party claims.

By appointing independent trustees, founders can ensure that their businesses and investments continue to be managed professionally, even after they step back. Family members who are not directly involved in the business can still benefit financially through trust distributions, while operational control remains stable.

Why families choose Sovereign for trust and succession planning

As the Asian region continues to grow as a hub for HNWIs, the need for sophisticated wealth management and preservation strategies has never been greater. Sovereign Group is well-positioned to assist HNWIs and families in navigating the complexities of wealth management and legacy planning in this dynamic region.

Sovereign has more than 30 years’ experience of setting up and managing various types of trust around the world. We offer trustee, wealth management, succession planning and tax advisory services to internationally mobile families and entrepreneurs, with an emphasis on cross-border asset management and family governance.

Choosing the right trustee is a crucial part of setting up a trust. Corporate trustees that are appropriately licensed, like Sovereign, are held to a standard of providing responsible ethical conduct, careful exercise of discretionary powers, competent investment management, expertise in tax and legal matters, and continuity in the administration of the trust for its duration.

We can review your circumstances and provide bespoke trust planning to Vietnamese clients to ensure your wealth is managed and preserved in the most effective way possible. Contact us today to learn more about how we can help you achieve your legacy goals.

The post Planning for the Future: How Trusts Can Elevate Wealth and Asset Management in Vietnam appeared first on The Sovereign Group.

Hong Kong has been ranked as the most international city in Asia in a new index compiled by global market research firm Ipsos and commissioned by the Hong Kong General Chamber of Commerce.

The inaugural ‘Asian Cities Internationality Index 2025’ was established to evaluate the internationality of 11 Asian cities – Bangkok, Ho Chi Minh City, Hong Kong, Jakarta, Kuala Lumpur, Mumbai, Seoul, Shanghai, Singapore, Taipei and Tokyo.

Out of a maximum score of 100, Hong Kong ranked first, with a score of 73.7, followed closely by Singapore at 73.5. The Index recognised Hong Kong’s position as an international financial hub, a centre for international events and an international hub for world-class education, as well as its free, safe, and stable living environment. Singapore was highlighted as a multicultural city that nurtures a diverse talent pool.

The Index measured 113 indicators in seven areas: Business & Economy, Quality of Life, Infrastructure & Connectivity, Innovation & Ideas, Human Capital Diversity, Cultural Interaction, and Government & Legal System for Business.

These included 69 statistical indicators from various national and international sources, and 44 indicators gathered from a survey of 1,107 business executives residing in these cities – both local and expats – to provide a broad spectrum of insights.

Tokyo and Seoul formed the next tier. Tokyo (70.0) was found to excel in quality of life, cultural interaction and international presence, while Seoul (69.4) rated highly in advanced transportation and information connectivity.

They were followed by Shanghai (65.1), Bangkok (61.3), Kuala Lumpur (60.7), Taipei (57.9), Jakarta (55.5), Ho Chi Minh City (53.9) and Mumbai (53.1). Shanghai led in innovation with its vibrant innovation ecosystem. Other cities’ unique strengths included tourism appeal, diverse educational resources and accessibility of information, but they were found to have not fully elevated their international standing.

According to the Chamber, Hong Kong’s top ranking was powered by its lead in the Business & Economy segment. But it placed fourth in Innovation & Ideas, trailing Shanghai, Singapore and Seoul, a weakness that had to be addressed if it was to secure its future amid rising geopolitical risks.

Chamber chief executive Patrick Yeung Wai-tim said Hong Kong’s development had not yet reached the point where its scientific research could successfully be commercialised on a large scale. “Hong Kong’s own enterprises still invest a relatively low proportion of their operational costs in scientific research and development,” he said.

To improve Hong Kong’s performance, the Chamber recommended providing “more investor-friendly policies to support commercialisation of local academic research”. It also urged action to “foster a balanced and diverse talent pool and improve the deteriorating English proficiency of the working population”, after Singapore led the Human Capital Diversity category.

“This new ranking not only highlights Hong Kong’s strength as an international finance centre, but also as a place that offers world-class education and a great place to do business. Similarly, Singapore has been recognised as a multicultural city with a growing tech and innovation hub,” said Alan Fong, Sovereign Managing Director – Asia.

“Asia is at the forefront of technology and innovation, and this has created the perfect ‘ecosystem’ for investors and individuals to start or grow a business. It should also be noted that Hong Kong and Singapore were ranked third and fourth respectively in the latest Global Financial Centres Index (GFCI) report. This means that, including Shanghai, Shenzhen and Seoul, there are now five Asian cities in the top ten.”

In another survey, the International Institute for Management Development (IMD) recently ranked Hong Kong third globally in its annual World Competitiveness Index, behind Switzerland and Singapore.

According to the IMD, Switzerland continued to demonstrate a robust performance, a result of the country’s resilient and stable economic and societal structures. It continued to lead globally in Government Efficiency and Infrastructure, maintaining its first position in both areas.

Singapore slipped to second from its top position in 2024. Singapore’s top rank in Economic Performance was mainly the result of high growth in GDP and capital formation, as well as notable improvements in the export of goods and commercial services. This combined drive in the Domestic Economy and International Trade subfactors was significant enough to offset slight declines in International Investment (from second to third) and Employment (from fifth to sixth).

Hong Kong SAR advanced two positions to secure third place, up from fifth in 2024, with gains across all four factors of competitiveness. These gains, said the IMD, reflected a broad-based approach to attracting private sector investment.

The post Hong Kong ranked as ‘most international city’ in Asia appeared first on The Sovereign Group.

As an adviser in the trust industry, among the most frequently asked questions I get are “What is the best location in which to establish my family trust?” and “Is Hong Kong a safe place in which to establish my trust?”, writes Alan Fong, Sovereign Trust Managing Director – Asia.

I am obviously biased and, naturally, my answer to the first question is “Hong Kong” and to the second is “Of course”. But don’t get me wrong, my answers are not blindly based on my emotional and commercial attachments to Hong Kong; they simply reflect my confidence in the strengths of Hong Kong as a trust jurisdiction.

Hong Kong as a leading trust jurisdiction

The initial enactment of Hong Kong’s trust law dates back to 1934, when the Trustee Ordinance (Cap. 29) was first introduced. This legislation was modelled closely on English trust law, reflecting Hong Kong’s then status as a British colony, and it laid the foundations of the legal framework governing trustees, their powers, duties, and the administration of trusts.

A modern legal framework with enhanced control and protection

In 2013, there was a timely overhaul. The Trust Law (Amendment) Ordinance modernised trustee powers and introduced a statutory duty of care for trustees, as well as allowing settlors to reserve investment powers for themselves without invalidating the trust. This provides settlors of a Hong Kong trust with a high degree of control over how trust assets are invested, ensuring that their investments can align with their financial objectives.

Importantly, it also abolished the rule against perpetuity, which previously required trusts in Hong Kong to last for no more than 80 years, and introduced forced heirship protections. This makes Hong Kong an attractive location for estate planning, as settlors can place assets into a Hong Kong trust and be assured those assets will be managed according to the trust’s terms rather than according to forced heirship rules.

These changes highlight the evolving nature of trust legislation in Hong Kong. It is aligned with modern estate and legacy planning needs and the amendments served to reinvigorate Hong Kong as a highly competitive global trust jurisdiction and to enhance its status as an international asset management centre.

Hong Kong, which is a Special Administrative Region of the People’s Republic of China (sharing a similar status to Macau), operates under the principle of “One Country, Two Systems”. This means that Hong Kong continues to operate under common law and the Hong Kong courts continue to apply English case law in trust matters.

This ensures a high level of confidence in the legal framework and the effective protection of assets. English is also the business and legal language of Hong Kong and is used alongside Chinese for doing business within the Chinese-speaking countries of the Asian region. English is the language used in commercial contracts.

Further, as part of the wider Greater Bay Area project, the Qianhai Shenzhen-Hong Kong Modern Service Industry Co-operation Zone is designed to integrate Hong Kong’s legal, financial and economic systems with Shenzhen’s mainland framework, fostering a unique cross-border collaborative environment.

A global financial centre supporting trust structures

Hong Kong’s strong, legal framework has been a major contributing factor in enabling Hong Kong to reclaim its title as Asia’s top international finance centre (and third globally behind New York and London). Another, is the strength of its financial services ‘eco-system’, which offers an exceptionally deep pool of professionals with expertise in legal, fiduciary and wealth management services.

This means that Hong Kong isn’t just a trust jurisdiction; it’s a strategic platform for legacy planning, asset managment and global wealth mobility. It has a robust regulatory framework that is aligned with global standards and can be used by families, regardless of their nationality or place of residency, as the ideal location for establishing a trust.

The post Why Choose Hong Kong for Establishing a Family Trust appeared first on The Sovereign Group.

Hong Kong’s Belt and Road Office signed a memorandum of understanding with Saudi Arabia on 29 August to enhance information exchange in infrastructure and construction, as well as to facilitate the entry of Hong Kong professional services into the Saudi market.

The MoU was signed in Hong Kong by Commissioner for Belt and Road Nicholas Ho Lik-chi and Assistant Deputy for the Saudi Services Sector Fahad Alhashem and witnessed by Hong Kong Chief Executive John Lee Ka-chiu and Saudi Minister of Investment Khalid Al-Falih.

Under the agreement, the Belt and Road Office will share information on Hong Kong’s professional services with Ministry of Investment of Saudi Arabia (MISA) to support investment promotion, tendering and fundraising activities.

MISA, in turn, will provide information on infrastructure and construction projects, and help Hong Kong companies overcome potential challenges when entering the Saudi market.

Lee described the agreement as a significant milestone in collaboration between the two sides under the Belt and Road Initiative (BRI), saying that it is the first agreement between Hong Kong and an overseas economy focusing on infrastructure and construction.

He emphasised Hong Kong’s strategic advantages in supporting Saudi Arabia’s Vision 2030, which aims to develop extensive infrastructure projects to diversify the country’s economy away from oil and improve the quality of life. As a leading international hub for finance, shipping and trade, as well as a fast-rising international innovation and technology centre, he said Hong Kong was well-positioned to contribute to the ambition.

Hong Kong and Saudi Arabia are also currently negotiating an Investment Promotion and Protection Agreement to protect, enhance and open investment flows between the two economies.

“As we prepare for the tenth anniversary of the Belt and Road Summit that will be open in Hong Kong on 10 September, the agreement between the Kingdom of Saudi Arabia and Hong Kong is another significant step towards the growing relationship between the two states,” said Alan Fong, Sovereign Trust (Hong Kong) Managing Director – Asia.

“This closer collaboration brings mutual economic benefits and true alignment between the Belt and Road Initiative and Saudi Arabia’s Vision 2030. Sovereign has offices in both Hong Kong and Saudi and will be represented in the Global Investment Zone at the Summit. Please visit us to learn more about our services and how we can help you expand your business across the Asia and Gulf regions.”

Hong Kong has been working to build ties with the Middle East in a bid to attract investments as the growing partnership between the Gulf Cooperation Council (GCC) and dynamic Asian economies gains momentum. In May, a Hong Kong delegation led by Lee signed 35 memorandums of understanding and agreements to deepen cooperation with Qatar, ranging from investment to innovation and technology, with city residents also given 30-day visa-free access to the Gulf nation.

China is a key driver. GCC-China trade has risen by around 50% over the last decade and now almost matches the GCC’s combined trade with the US, UK, and Western Europe.

Al-Falih had earlier led a Saudi delegation on an official visit to China where he met China’s Commerce Minister Wang Wentao in Beijing. Bilateral trade exceeds USD100 billion annually, making China the Kingdom’s largest trading partner.

Chinese customs data showed that while the Asian country exported over USD50 billion worth of goods to the Kingdom in 2024 – including smartphones, solar panels and saloon cars – Saudi exports to China totalled USD57 billion, over 80% of which was oil.

The ministers discussed strengthening cooperation in global trade and boosting direct investment across several sectors. The meeting also saw the signing of the minutes of the Saudi-China Trade, Investment and Technology Committee.

China is ready to align the BRI with Saudi Arabia’s Vision 2030, expand bilateral trade, enhance two-way investment, and broaden cooperation in areas such as new energy, supply chains and capital markets, to further strengthen economic ties, Wang said.

Al-Falih said that China is a key strategic partner for Saudi Arabia. Riyadh is ready to deepen trade cooperation, support Saudi companies in expanding investment in China, and welcome more Chinese companies to invest in Saudi Arabia. The two countries will strengthen practical cooperation in advanced manufacturing, new energy, supply chains and industrial parks, further enriching their comprehensive strategic partnership.

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