Singapore & Hong Kong – Asian Wealth Management … & Hong Kong – Asian Wealth Management Centres . ... surrounded by Indonesia/ Malaysia/ Thailand 2. ... DELOITTE ST 10 Feb 2015

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

Agenda • Introduction – Dr Angelo Venardos, IBF Fellow • Overview A. Singapore & Hong Kong as Wealth Management

Centres B. Trust Updates C. Estate Planning Tools

i. Panama Foundation ii. Private Trust Companies iii. Wills

• Q&A

2 Asian Focus – Global Solutions

Presenter

Presentation Notes

Leave questions till the end

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.


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


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?


The London Laundry

Financial Times 12 Mar 2011 Asian Focus – Global Solutions 6

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.

Regulators slap $4.3bn fines on six banks in global forex probe

Financial Times 13 Nov 2014

Asian Focus – Global Solutions 7

Penalties for lenders leap to

record $56bn

Financial Times 27 Dec 2014


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%

Financial Times – Weekend – 19 Oct 2013 Where to Live


Wealth-X and UBS Billionaire Census

2014


World’s Leading Wealth Management Centres

Switzerland UnitedKingdom

UnitedStates

Panama &Carribean Hong Kong Singapore

2013 2.14 1.73 1.31 1.09 0.53 0.422014 (Annualised) 2.04 1.65 1.43 0.93 0.64 0.47

0

0.5

1

1.5

2

2.5

US$

(tril

lion)


Source: DELOITTE ST 10 Feb 2015

Private Wealth: Where the Money Is

13

Straits Times 10 Feb 2015

Asian Focus – Global Solutions

A. Singapore and Hong Kong as Wealth Management Centres

15

BVI

China

India

1 Switzerland

2 Jersey

Guernsey

3 Bahamas Bermuda

4 Samoa Marshall Islands Vanuatu

5 Mauritius Seychelles

6 Brunei Labuan

Hong Kong

Singapore

The Asian Century

7 New Zealand


The Case for Singapore:

The Four Pillars 1. Political 2. Legal 3. Regulatory 4. Financial


Business Times 15 Nov 2013


Political and Legal Framework SINGAPORE HONG KONG

Politically stable government for past 40 years.

Special Administration Region

Unicameral parliament and a government patterned after the Westminster model.

One country, two systems and a government patterned after England & Wales.

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.

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.

English Common Law / Client Confidentiality.


Financial Infrastructure


SINGAPORE HONG KONG

Sound economic and monetary governance Sound economic and monetary governance

Strategic location with skilled and educated workforce and excellent telecommunication

Strategic location with skilled and educated workforce, good telecommunication

Financial services account for 11% of GDP Financial services account for 11.9% of GDP

5th Largest Regional Foreign Exchange trading centre after London, New York, Zurich and Tokyo and 3rd Largest Global Financial Centre after London and New York

4th Largest Global Financial Centre

Approximately 700+ financial institutions offering trade financing, foreign exchange, derivatives, capital market activities, asset management, securities trading, financial advisory services, insurance and private banking

6th Largest Regional Foreign Exchange trading centre

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



Straits Times 8 Jan 2015

Hong Kong Companies

22

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

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


Changes in AML Rules


SINGAPORE HONG KONG

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.

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 2018.

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.

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.

Increasing the maximum term of imprisonment for money laundering offences from 7 years to 10 years.

Imprisonment for money laundering offences is 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

Subject to negative vetting by the Legislative Council, the relevant amendments to the AMLO will come into operation on 1 April 2015.

STEP Journal Nov 2014


B. Trust Updates

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).

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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

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.


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.


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.


C. Estate Planning Tools

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.


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.


Trust and Foundation Comparison


TRUST FOUNDATION

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)

Trust Settlor

Trust Deed

Panama Foundation Founder

Foundation Charter

Other Estate Planning Tools


• BVI Vista Trust • Private Trust Company • Life Insurance Trust

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

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Contact for enquiries Singapore 50 Raffles Place, #15-05/06 Singapore Land Tower, Singapore 048623 Michelle Sng Wealth & Estate Planning DID: (65) 6692 1551 HP: (65) 9233 5011 [email protected]

Hong Kong 902, 9th Floor, Loke Yew Building, 50-52 Queen's Road Central, Hong Kong Liu Ce Business Development Manager DID: (852) 2527 9398 HP: (852) 6539 3717 [email protected]

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www.heritagetg.com


mailto:[email protected]

mailto:[email protected]

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 case-by-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.


Thank You.

Singapore & Hong Kong – Asian Wealth Management … & Hong Kong – Asian Wealth Management Centres . ... surrounded by Indonesia/ Malaysia/ Thailand 2. ... DELOITTE ST 10 Feb 2015

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