GUERNSEY vs hong kong The optimal jurisdiction for trusts INSURANCE INVESTMENT FUNDS TRUST & COMPANY PENSIONS MANAGEMENTINVESTMENT BANKING
Guernsey has a long tradition of providing specialist private wealth management to sophisticated private clients and their families –the island is politically, economically, and environmentally safe and secure. 2 Guernsey vs Hong Kong – The optimal jurisdiction for trusts GUERNSEY vs hong kong
A former British colony but is now a special administrative region of China.
A British Crown Dependency – relationship with the UK is through the Crown not the UK Parliament.
Highly volatile – increasing influence of China has resulted in the erosion of democratic governance, and so increased political volatility. The passing of the National Security Law is a prime example of this at work.
✔ No major weather, geological or other environmental disasters.
HONG KONG weareguernsey.com
A former British colony but became a special administrative region of China in 1997 and is on track to greater integration with China.
POLITICAL AND GEOGRAPHICAL DIFFERENCES
CONSTITUTIONAL,GUERNSEY
EnvironmentallyPoliticalHistoricalcommonprinciplesApplicationcouncilandofEnglishlawtiestoUKvolatilityandgeographicallystable
JURISDICTION
CONSTITUTIONAL, POLITICAL AND GEOGRAPHICAL DIFFERENCES
Political position in the world Right to appeal in UK privy
A self-governing jurisdiction with more than 800 years of constitutional autonomy, having split from Normandy in 1204. ✔ Origins based in Norman-French law, with a strong emphasis on English common law due to strong influence of UK.
✔ No major weather, geological or other environmental disasters.
✘ As a former British colony, the legal system is based on English common law with local legislation codified in the laws of Hong Kong. The passing of the National Security Law has resulted in greater influence of the Chinese Communist Party and further erosion of the common law base.
Not volatile – secure and stable with candidates typically being elected independently.
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The Public Trustee (Bailiwick of Guernsey) Law, 2002. The Trusts (Guernsey) Law, 2007. ✘ ✘ (except for certain unit trusts). Discretionary trust. Life Interest trust. Purpose trust (charitable and non-charitable). Bare trust. Unit EmployeePensionTrust.Trust.Benefit Trust. Trusts with settlor reserved powers permitted. Reserved powers can be granted to others and are wide ranging – enabling influence on investment and asset management, making distributions and in appointing and removing officers, advisors, trustees, and beneficiaries. Trust Ordinance. ✘ ✘ (except for certain unit trusts). Discretionary trust. Fixed AccumulationProtectivetrust.trust.& maintenance trust. Bare trust. Unit EmployeePensiontrust.trust.Benefit trust. Limited reserved powers for trustees.
JURISDICTION DIFFERENCES
Guernsey vs Hong Kong – The optimal jurisdiction for trusts
GUERNSEYREGULATORY AND LEGAL
Principal TypesRegulatoryGovernmentlegislationtrustFeesapprovalsoftrust
HONG KONG
REGULATORY AND LEGAL DIFFERENCES
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Within a few days for a straightforward discretionary trust subject to AML requirements being met. No specific legislation, but a company limited by shares or guarantee can conduct the function of a PTC. No public filing requirement. Trust documents are confidential. Since 2018 by the Registry for Trust and Company Service Providers. KONG
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JURISDICTION GUERNSEYREGULATORY AND LEGAL DIFFERENCES Establishment time PTC legislation and administrationassetsRequirementprofessionalRegulationConfidentialityProtectorsregulationspermittedoftrusteesforlocalorlocaltrust
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Within a few days for a straightforward discretionary trust subject to AML requirements being Discretionarymet. exemptions available subject to discretion of the Regulator. No public filing requirement. Trust documents are confidential. Guernsey Financial Services Commission.
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INTERNATIONAL STANDARDS/PRODUCTS JURISDICTION GUERNSEYADHERENCE TO INTERNATIONAL STANDARDS PRODUCT COMPARISON EU FoundationsPrivatewithCompliancefundPrivateCompliancetrustsNon-charitableCompaniesPrivateSubstanceEconomicstatusTrustpermittedpurposepermittedwithFATFinvestment/vehiclespermittedOECDTrustpermitted Whitelisted (2019). ✔ Under the Fiduciaries Law. ✔ Under the Trusts Law. Compliant with Moneyval and fully committed to the implementation of FATF and CFT recommendations ✔ A Guernsey Private Investment Fund (PIF) can be created as a bespoke private wealth structure for those investors who hold a family relationship. Whitelisted (2009). ✔ Under the Fiduciaries Law. N/A. ✘ There is no specific legislation – PTCs are typically set up in alternative jurisdictions. ✘ Compliant or largely compliant with FATF and CFT recommendations ✘ N/A. ✘ HONG KONG 6 Guernsey vs Hong Kong – The optimal jurisdiction for trusts
Guernsey service providers are renowned for offering competitive fees, and structures that enable a greater retention of control for clients and their families. JURISDICTION GUERNSEY Family CompanyInvestmentpermitted There are plans to allow the creation of a Family Investment Company product, which is due for completion year end 2021. For more details contact arobinson@weareguernsey.com ✘ HONG KONG sacostving ofretentioncontrol safety GUERNSEYsecurityand FUTURE DEVELOPMENTS 7weareguernsey.com future developments FIND A PRACTITIONER TODAY! Visit the business directory at weareguernsey.com
weareguernsey.com Guernsey Finance, PO Box 655, St Peter Port, Guernsey, GY1 3PN +44(0) 1481 720 071 info@weareguernsey.com Please recycle me 70% of the wood used in creating this brochure is recycled material, with the remaining 30% from a ‘controlled/sustainable’ wood forest
