As global interest in secure, flexible and tax-efficient wealth structures continues to rise, Hong Kong remains a premier jurisdiction for establishing trusts. In this edition of Zetland Newsletter, we explore the current landscape of Hong Kong trusts, including their structure, legal and tax advantages and the latest regulatory developments shaping the industry in 2025.
Why Hong Kong for Trusts?
Hong Kong offers a unique blend of legal certainty, tax efficiency and international credibility. Its trust law, rooted in English common law, provides a robust framework for asset protection, succession planning and cross-border wealth management.
Whether you are a high-net-worth individual, family office or advisor, Hong Kong’s trust regime offers:
- Perpetual trusts for long-term wealth preservation
- No forced heirship rules allowing full control over asset distribution
- Recognition of foreign trusts supporting international families
- Reserved powers for settlors enhancing flexibility
- Protector roles adding oversight and governance
Trust Structure at a Glance
A typical Hong Kong trust involves:
- Settlor – The person who establishes the trust
- Trustee – The legal owner of the assets, managing them per the trust deed
- Beneficiaries – Individuals or entities entitled to benefit
- Protector (optional) – Oversees trustee decisions and ensures settlor intent
Trusts can be discretionary, fixed, revocable, irrevocable or charitable and are often customised to meet complex family and business needs.
Tax Advantages of Hong Kong Trusts
Hong Kong’s tax regime is one of the most favourable globally:
- No capital gains tax
- No estate or inheritance tax
- Territorial taxation – Only Hong Kong-sourced income is taxable
- No withholding tax on distributions
- Access to double tax treaties for cross-border planning
These features make Hong Kong ideal for international clients seeking efficient, compliant wealth structures.
2025 Regulatory Updates: What You Need to Know
Hong Kong continues to modernise its trust industry with key regulatory enhancements:
TCSP Licensing & AML Compliance
Trust or Company Service Providers (TCSPs) must now meet stricter licensing standards under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance:
- Mandatory fit and proper tests for key personnel
- Appointment of Compliance Officers and MLROs
- Enhanced client due diligence and reporting obligations
These measures reinforce Hong Kong’s reputation for transparency and professionalism.
New Regulated Activity (RA13)
The Securities and Futures Commission (SFC) introduced RA13, regulating trustees of Collective Investment Schemes (CISs). Trustees must now meet higher standards of governance and fiduciary oversight.
HKMA’s TB-1 Module
The Hong Kong Monetary Authority (HKMA) released TB-1, outlining expectations for trustees in risk management, compliance and reporting, further aligning Hong Kong with global best practices.
Strategic Outlook for International Clients
Hong Kong’s trust industry is thriving, with assets under trust exceeding HK$5 trillion. Growth is driven by:
- Rising demand from mainland Chinese families
- Integration with family office structures
- Cross-border initiatives like Wealth Management Connect
- Renewed interest through the Capital Investment Entrant Scheme (CIES)
Despite increased compliance costs, Hong Kong remains a strategic jurisdiction for long-term wealth planning.
How to Set Up a Trust in Hong Kong
- Define your objectives – Asset protection, succession, philanthropy
- Choose a trustee – Individual or corporate, licensed and reputable
- Draft the trust deed – Outline terms, powers, and responsibilities
- Transfer assets – Legal ownership passes to the trustee
- Ensure compliance – Meet AML/CTF and TCSP requirements
- Administer the trust – Ongoing management, reporting, and governance
Professional guidance is essential to ensure legal soundness and tax efficiency.
How Zetland Can Help
At Zetland Fiduciary Group, we specialise in establishing and administering trusts in Hong Kong and other leading jurisdictions. Our team combines decades of experience with deep regulatory knowledge and a commitment to personalised service.
Whether you are planning for future generations or managing global assets, we are here to help you:
- Structure wisely
- Protect effectively
- Grow strategically
