Singapore & Hong Kong Asian Wealth Management Centres

Transcription

1 Singapore & Hong Kong Asian Wealth Management Centres A Presentation by Dr Angelo Venardos, TEP CEO, Heritage Trust Group Singapore Hong Kong BVI Board Member, STEP Worldwide 23 April 2015

2 Agenda Introduction Dr Angelo Venardos, IBF Fellow Overview A. Singapore & Hong Kong as Wealth Management Centres B. Trust Updates C. Estate Planning Tools Q&A i. Panama Foundation ii. Private Trust Companies iii. Wills Asian Focus Global Solutions 2

3 Dr Angelo Venardos CEO and Founder of the Heritage Trust Group, an independent trust and corporate services company which has offices in Singapore, Hong Kong and BVI with a staff complement of 60 professionals. Heritage has representations in Brunei, Seychelles and New Zealand. Angelo holds degrees in Economics & Marketing, an MBA, a Master of Jurisprudence (Corporate & Commercial Law) and a Doctorate of Legal Science. He was the Chairman of the STEP Singapore Chapter during 2009 to 2011, giving up the position to represent South East Asia as a Council Member of STEP Worldwide in London. In December 2013, was elected to the Board of Directors of STEP. Asian Focus Global Solutions 3

4 Overview Singapore 1. Sits between the 2 emerging economies India & China and surrounded by Indonesia/ Malaysia/ Thailand 2. Government-efficient business model not a tax haven but a safe haven 3. Financial Services sector accounts for only 11% of the economy 4. Well regulated government wants Singapore to be perceived as being clean and ahead of the regulatory curve Hong Kong 1. Open Economy and Laisse-faire government 2. Gateway to China as opposed to Singapore being entry point to India 3. Supports HK 9million population plus surrounded by Taiwan, Philippines and Korean markets Asian Focus Global Solutions 4

5 The Key Questions in Next 5 Years Will London throw it away? Can the IFCs survive the end of secrecy? Will Asia be the guys with the money? Who is going to get the regulation right? Asian Focus Global Solutions 5

6 The London Laundry Wealth services From the fiscal to the social, nowhere but the UK capital offers so vast an array of assistance to the expatriate superclass that increasingly populates its smartest streets. Financial Times 12 Mar 2011 Asian Focus Global Solutions 6

7 Regulators slap $4.3bn fines on six banks in global forex probe Financial Times 13 Nov 2014 Asian Focus Global Solutions 7

8 Penalties for lenders leap to record $56bn Financial Times 27 Dec 2014 Asian Focus Global Solutions 8

9 STEP SURVEY NOV 2012 Top Three Financial Centres in 2017 Rank Country Percentage 1 Singapore 24.64% 2 Hong Kong 24.40% 3 London 22.49% Asian Focus Global Solutions 9

10 Financial Times Weekend 19 Oct 2013 Where to Live Asian Focus Global Solutions 10

11 Wealth-X and UBS Billionaire Census 2014 Asian Focus Global Solutions 11

12 World s Leading Wealth Management Centres 2.5 Source: DELOITTE ST 10 Feb US$ (trillion) Switzerland United Kingdom United States Panama & Carribean Hong Kong Singapore (Annualised) Asian Focus Global Solutions 12

13 Private Wealth: Where the Money Is Straits Times 10 Feb 2015 Asian Focus Global Solutions 13

14 A. Singapore and Hong Kong as Wealth Management Centres

15 The Asian Century Jersey Guernsey 2 1 Switzerland China India BVI 3 Bahamas Bermuda Hong Kong 4 Samoa Marshall Islands Vanuatu Mauritius Seychelles Singapore 5 6 Brunei Labuan New Zealand 7 Asian Focus Global Solutions 15

16 The Case for Singapore: The Four Pillars 1. Political 2. Legal 3. Regulatory 4. Financial Asian Focus Global Solutions 16

17 Business Times 15 Nov 2013 Asian Focus Global Solutions 17

18 Political and Legal Framework SINGAPORE Politically stable government for past 40 years. Unicameral parliament and a government patterned after the Westminster model. Matters which have not been legislated upon by the Singapore Parliament are governed by English Common Law embodied in decided cases of the English courts. English Common Law / Client Confidentiality. HONG KONG Special Administration Region One country, two systems and a government patterned after England & Wales. Matters which have not been legislated upon by the Hong Kong Parliament are governed by English Common Law embodied in decided cases of the English courts. English Common Law / Client Confidentiality. Asian Focus Global Solutions 18

19 Financial Infrastructure SINGAPORE Sound economic and monetary governance Strategic location with skilled and educated workforce and excellent telecommunication Financial services account for 11% of GDP 5 th Largest Regional Foreign Exchange trading centre after London, New York, Zurich and Tokyo and 3 rd Largest Global Financial Centre after London and New York Approximately 700+ financial institutions offering trade financing, foreign exchange, derivatives, capital market activities, asset management, securities trading, financial advisory services, insurance and private banking HONG KONG Sound economic and monetary governance Strategic location with skilled and educated workforce, good telecommunication Financial services account for 11.9% of GDP 4 th Largest Global Financial Centre 6 th Largest Regional Foreign Exchange trading centre Asian Focus Global Solutions 19

20 Singapore Companies Companies limited by shares Corporate Tax at 17% Foreign sourced income may be exempted from tax. Audit required when revenue is over S$5 million or companies with corporate shareholdings. No corporate directors allowed Min. 1 shareholder and director. 1 director must be resident individual Individual resident secretary required. Annual filing of accounts & Annual General Meeting. Reduced withholding tax of 5% on dividends from China Subsidiary company Asian Focus Global Solutions 20

21 Straits Times 8 Jan 2015 Asian Focus Global Solutions 21

22 Hong Kong Companies Companies limited by shares Corporate Tax at 16.5% Only profits derived in HK are assessable to tax Offshore income can be exempted from tax (subject to approval from Inland Revenue Department) Annual filing of Annual Returns Min. 1 shareholder and director. Corporate director is allowed (at least one natural person as director). Secretary can either be a resident in HK or a company with its registered office in HK. Reduced withholding tax of 5 % on dividends from China subsidiary company Asian Focus Global Solutions 22

23 Changes in AML Rules SINGAPORE From 1 September 2014: Dual criminality requirement for tax offences has been removed in the Corruption, Drug Trafficking and Other Serious Crimes (Confiscation of Benefits) Act (CDSA). This enables the CDSA to recognise a foreign tax evasion offence whether or not the foreign tax concerned is of a type that is imposed in Singapore. CDSA criminalises the laundering of benefits or proceeds from predicate offences prescribed under the CDSA which include criminal conduct and drug dealing committed in or outside Singapore. Increasing the maximum term of imprisonment for money laundering offences from 7 years to 10 years. Providing the amount of the cross-border cash movement reporting threshold to be prescribed in subsidiary legislation, instead of being specified in the CDSA. From 1 September 2014, the threshold for the cash reporting requirements on travelers who carry physical currency and bearer negotiable instruments into or out of Singapore was lowered from S$30,000 to S$20,000 HONG KONG The Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance ( AMLO ) to enable financial institutions (Fis) to continue relying on certain specified intermediaries to carry out customer due diligence measures until 31 March The AMLO requires FIs to take all reasonable measures to ensure that proper safeguards exist to mitigate the risks of money laundering (ML) and terrorist financing (TF) and to prevent a contravention of any CDD or record-keeping requirement of Parts 2 and 3 of Schedule 2 to the AMLO. Imprisonment for money laundering offences is 10 years. Subject to negative vetting by the Legislative Council, the relevant amendments to the AMLO will come into operation on 1 April Asian Focus Global Solutions 23

24 STEP Journal Nov 2014 Asian Focus Global Solutions 24

25 B. Trust Updates

26 Singapore Trusts Features of Singapore Trust Based on English common law trust principles. Creation of express trust, acting as trustee, trustee arrangements and trust administration. No registration requirements for trusts. Companies providing Trust services are licensed under the Trust Companies Act supervised closely by the Monetary Authority of Singapore (MAS). 26

27 Singapore Trusts Benefits of Singapore Trust Legitimate A safe way to protect assets and manage estate planning Confidentiality Singapore trust is not required to be registered with the Singapore Government or any other governing authority in Singapore, and is committed to comply with OECD guidelines Forced heirship offers protection against foreign forced heirship under s90 of the Trustees Act Duration Perpetuity period of 100 years Taxation Trust income is taxed once only Tax Exemptions Singapore income tax on distributions to non-resident beneficiaries for Qualifying Domestic Trusts and Qualifying Foreign Trust Asian Focus - Global Solutions 27

28 Hong Kong Trusts Singapore and Hong Kong now have similar trust laws. However, Hong Kong has, where Singapore has not, abolished the Rule Against Perpetuities and the Rule Against Excessive Accumulations, provided a mechanism for beneficiaries to remove trustees, put limitations on trustee exoneration and indemnity clauses and, quite interestingly, relieved trustees from potential breach of trust where they follow directions from settlors who have investment powers and asset management functions reserved to them. Asian Focus - Global Solutions 28

29 Hong Kong Trusts The amendments provide a significant modernization of Hong Kong trust law by updating the powers of trustees and the rights of beneficiaries thus making Hong Kong law a more attractive choice as the governing law of private trusts. This in turn resulted in a greater number of existing and new trusts being administered in Hong Kong. Asian Focus - Global Solutions 29

30 Hong Kong Trusts The Amendment Bill included; 1. A New UK style statutory of care. 2. Abolition of the Rule Against Perpetuities and the Rule Against Excessive Accumulation of Income. 3. New statutory trustees powers to insure and to appoint agents nominees and custodians and new corresponding trustees duties and liabilities. 4. Statutory Control of Trustees Exemption Clauses. 5. Statutory provisions concerning the validity of reserving investment powers to settlors. 6. Anti-forced heirship provisions. Asian Focus - Global Solutions 30

31 C. Estate Planning Tools

32 Panama Foundation Panama Foundation is a type of private foundation formed under the laws of Panama. Foundations are familiar to civil law countries and are mainly used for philanthropic and estate planning purposes. In terms of its legal structure, a PF lies somewhere between an offshore company and an offshore trust. Compared with a trust, a foundation is a distinct legal entity (like a company) while a trust is not a separate legal entity but an arrangement. Asian Focus - Global Solutions 32

33 Panama Foundation Benefits of a Panama Foundation Facilitates the administration of family wealth with complete investment flexibility. Swift and confidential transfer of assets to next generation(s). Allows families to plan for Beneficiaries with special needs. Asian Focus - Global Solutions 33

34 Trust and Foundation Comparison TRUST FOUNDATION Settlor Trust Founder Panama Foundation Trust Deed Foundation Charter Trust Foundation Type of documents Trust Deed Foundation Charter Person who set up Settlor Founder Period 100 years Perpetual Jurisdiction Singapore Panama Distribution Letter of Wishes Regulations/ By-Laws Law Common Law (Contract) Civil Law (Legal Entity) Asian Focus - Global Solutions 34

35 Other Estate Planning Tools BVI Vista Trust Private Trust Company Life Insurance Trust Asian Focus - Global Solutions 35

36 Other Estate Planning Tools Issue Trust PTC Will Foundation Type of document Trust Deed Trust Deed Will Foundation Charter When is it effective? When the asset is transferred to the Trustee When the Trust is set up When the Testator dies When the asset is transferred to the Foundation Contestability Seldom, unless a sham Seldom Issues of undue influence, pressure, incapacity Seldom Resist challenge by Creditors Yes, if it is an irrevocable trust for more than 5 years Yes, if it is an irrevocable trust for more than 5 years No Separate Legal entity Beneficiary Anyone or any organization Must be related to settlor Anyone or organization (except Muslims) Anyone or any organization Court order? None needed None needed Probate None needed Revocable Yes, if it is a revocable trust Yes, if it is a revocable trust Yes during Testator s lifetime Yes, if it is a revocable foundation Type of asset Only those assets specifically transferred into the Trust usually finance assets and properties Only those assets specifically transferred into the Trust usually finance assets and properties Deals only with the assets of the deceased s estate at the point of death Only those assets specifically transferred into the Foundation Effect of Client s death Assets are not frozen Assets are not frozen Assets are frozen Assets are not frozen Effect of marriage No effect No effect Revokes the Will No effect 36

37 Asian Focus Global Solutions 37

38 Contact for enquiries Singapore 50 Raffles Place, #15-05/06 Singapore Land Tower, Singapore Michelle Sng Wealth & Estate Planning DID: (65) HP: (65) Hong Kong 902, 9th Floor, Loke Yew Building, Queen's Road Central, Hong Kong Liu Ce Business Development Manager DID: (852) HP: (852) Asian Focus Global Solutions 38

39 Disclaimer The information in this presentation provides general guidance and is provided for information purposes only. Any opinions or statements expressed herein are given in good faith and are based on Heritage Trust Group s own appraisal of the applicable facts, law and regulations in force at the time this presentation is prepared. While all reasonable care has been taken in the preparation of this document, Heritage Trust Group assumes no responsibility or liability for the information contained herein and for the consequences of reliance upon any opinion or statement contained herein. Heritage Trust Group does not accept any liability whatsoever for any direct or indirect, actual or consequential loss arising from any use of information contained in this document. You must consult your own advisors prior to making any decision in respect of such information. Heritage Trust Group is not a legal or tax advisor. The implementation of any of the structures or techniques mentioned should only be made in consideration of specific legal and tax advice on a caseby-case basis. You are strongly recommended to obtain independent legal/tax advice as to the effectiveness of the trust structure both on its establishment and in future in the light of changing legislation and practices. This presentation is confidential and is given to selected recipients only. It may not be reproduced (in whole or in part) to any other person without the prior written permission of Heritage Trust Group. Asian Focus Global Solutions 39

40 Thank You.