PRIVATE TRUST COMPANIES THEIR APPLICATION TO PRIVATE CLIENTS RESIDENT OF CHINA, HONG KONG, SINGAPORE, INDONESIA AND OTHER NATIONS

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1 1 PRIVATE TRUST COMPANIES THEIR APPLICATION TO PRIVATE CLIENTS RESIDENT OF CHINA, HONG KONG, SINGAPORE, INDONESIA AND OTHER NATIONS A presentation delivered to delegates of Swiss-Asia Wealth Exchange Delivered by Simon Denton, Managing Director of Sovereign (UK) Ltd. Zurich, 30 th October 2014

2 Ideal jurisdictions for the establishment of Private Trust Companies (PTC) 2 Nation Characteristics Positive Negatives BVI Popular Robust trust laws Over used and a tax haven Hong Kong Onshore Under used, fiscally neutral Audit requirement and more costly than others Isle of Man Solid reputation Cost friendly Local directors are required New Zealand Onshore A pioneering jurisdiction for PTC and geographic qualities with Asia Cannot incorporate a company with guarantor membership Grand Turk Under used Less administration A tax haven

3 Introducing PTC, their concept and vital advantages 3 A trust settlor can retain a greater degree of control without compromising the PTC validity. A PTC is often a trust structure for the specific purpose of acting as trustee of a single trust. It is a particularly valuable structure for investors and a family business wishing to maintain the control of the assets placed in the trust. Family members can participate in the management of the company including decisions relating to the control and management of companies owned by the trustee. Such participation would not be possible if the trustee was an independent trust company.

4 continued 4 The settlor, members of his family or his advisors can be appointed to the board of directors of the PTC and in this capacity they are in a position to influence the manner in which the trust is administered. PTC are often set up as companies limited by guarantee whose members can be appointed and removed or cease to be members on death. Many jurisdictions specifically exempt PTC from the requirement to be licensed and regulated. PTC should at least be administered by a licensed Trust Company and by management having relevant experience and expertise.

5 Relevance and applicability for the use of Trusts and PTC for residents of the following nations 5 Country of residence Relevance and applicability China No gift or inheritance tax and as yet there are no local anti avoidance rules taxing the income and gains held by a trust. Hong Kong No gift or inheritance tax, so a HK resident settlor has scope to settle assets into a trust. Source based tax system applies. Indonesia No gift or inheritance tax and anti avoidance legislation is not so punitive than European and other countries. Singapore No gift or inheritance tax, so a Singaporean resident settlor has scope to settle assets into a trust. Source based tax system applies.

6 A HK PTC private client illustration Hong Kong Company PTC Ski Holdings Ltd Trust Deed Lake Investments Ltd Cyprus Co. Guarantor Members Head of family GM1 Immediate successor GM2 Director (Sovereign) Investment committee, Chairman and Deputy Chairman Trustee: Ski Holdings Ltd Trust name: The Slalom Trust Date: 30/10/2014 Protector: Known family lawyer Beneficiaries : Trust Property: Head of family Spouse Children and others Cash at Bank Lake Investments Ltd 6

7 What Sovereign does best! 7 Trust establishment and full Trustee services available in Gibraltar, Guernsey, Hong Kong, Isle of Man, Malta, Singapore and TCI. Private Trust Companies. World-wide company formation, statutory and full fiduciary services. Hybrids, Guarantee companies, Foundations, Charities and SPV s. Merchant and private vessel registration and private aircraft registration.

8 continued 8 Fund formation and Fund Administration services. China market entry solutions. International Pensions, QROPS and QNUPS. Image rights planning for UK and non-uk residents. Overseas EBT s. International insurance services.

9 9 For further information contact: Sovereign (UK) Limited 40 Craven Street London WC2N 5NG T: +44 (0) Simon Denton, Managing Director Richard Moir, Ambassador of The Sovereign Group www.