Hong Kong trust: how it works and who it suits

What a Hong Kong trust is

A trust is a legal relationship set out in a deed, not a company. You, the settlor, transfer assets to a trustee. The trustee becomes the legal owner, but holds and manages the assets under the deed, for the beneficiaries.

Hong Kong’s trust law rests on the common law, with statute on top.

The main statutes are the Trustee Ordinance (Cap. 29) and the Perpetuities and Accumulations Ordinance (Cap. 257).

The Trust Law (Amendment) Ordinance 2013 reformed this law from 1 December 2013, and the government’s announcement said settlors could now set up perpetual trusts (source: Hong Kong Government press release, 26 July 2013).

It also said that, with the reform, forced heirship rules of a settlor’s home country are not meant to influence how trust assets are allocated against the settlor’s wishes. How a court elsewhere treats assets held there is a question for your lawyer.

Each feature and its source is set out on the law and features page.

Most families choose a discretionary trust. The trustee decides who receives what and when, guided by a letter of wishes that you write and can update. The letter is not binding, so the trustee can respond when circumstances change.

Here we act as trustee directly. There is no partner trustee between you and us, so identity checks, work with the law firm that drafts the deed, the bank account and the yearly accounts all run through one team.

A trust is also not a way to hide assets or to put them beyond the reach of every rule. Banks, tax authorities and the trustee itself need to know who stands behind the trust.

What a trust does offer is continuity. A professional trustee follows the deed after the settlor steps back, falls ill or dies.

For assets properly placed in the trust, the family then depends less on probate in several countries. Advisers in each place say how far that holds there.

Who sets up trusts in Hong Kong

This structure suits founders and business owners, often with assets or companies in more than one country.

Typical aims are to keep shares in a family company together across generations, to place founder shares in trust before a listing, or to hold the investment vehicle of a family office.

Where you live does not stop you from starting, but the trustee must verify who you are.

If we do not meet you in person, we take at least one extra step to confirm who you are.

Examples of those steps are a second set of identity documents, supplementary checks on the information given, or a first payment from an account in your own name. The trustee decides which steps fit your case.

Existing trusts are welcome too.

If your trust sits with another trustee, we can administer it alongside that trustee. We can also take over the trustee role by a deed of retirement and appointment, following the steps your lawyer confirms under the trust’s own governing law.

Our trust administration service covers the move by a deed of retirement and appointment.

Family trust: Hong Kong options from insurance trusts to PTCs

A family trust is the core option: one deed, a named class of beneficiaries and a trustee who answers to the deed. Every other option builds on it.

• Discretionary family trust. The trustee decides distributions within the class of beneficiaries, guided by your letter of wishes.
• Reserved powers trust. The settlor keeps certain powers, such as directing investments. How far that works depends on the wording of the deed.
• Private trust company (PTC). The family sets up its own company to act as trustee. We then provide the administration and support its board with papers, minutes and records.
• Family office trust. The trust holds the investment vehicle that the family’s own office runs. See family office structuring for how the pieces fit.
• Insurance trust. A life policy is held in trust so the proceeds pass under the deed. The policy terms come from your insurer, and the law firm checks how policy and deed fit together.

If you are weighing a family trust in Hong Kong for a business holding, tell us early which assets are involved. Shares in an operating company raise different questions from a portfolio of listed securities or a property.

Trustee duties under Hong Kong law

The trustee must follow the deed, act in the interests of the beneficiaries and keep proper records.

The 2013 reform strengthened the trustee’s default powers and duties (source: Hong Kong Government press release, 26 July 2013).

It also limited exemption clauses. A deed cannot relieve a paid professional trustee of liability for its own fraud, wilful misconduct or gross negligence.

The rule applies to new trusts from 1 December 2013 and to trusts that already existed from 1 December 2014 (same source).

In practice the trustee’s work looks like this:

• holding title to the assets and keeping them separate from its own;
• trustee meetings with minutes for each distribution or major decision;
• accounts and an asset report that we send you;
• a periodic refresh of identity checks on the people connected to the trust;
• collecting the self-certification forms used for tax information exchange and, with your consent, sending what was reported about you to your tax adviser.

What stays with you is the choice of beneficiaries, the letter of wishes, and either the decision on how assets are invested or the appointment of a professional manager to decide.

We administer the trust and take the decisions that the deed gives the trustee. Legal and tax questions go to your own advisers.

Reporting is part of the job. Hong Kong has carried out automatic exchange of financial account information since September 2018 (source: Inland Revenue Department, AEOI frequently asked questions).

It runs the exchange under the Common Reporting Standard (source: Inland Revenue Department, AEOI Ordinance 2026).

A new ordinance requires every reporting financial institution to register in the Inland Revenue Department’s AEOI Portal, even with nothing to report (same source).

It comes into operation on 1 January 2027. Reporting financial institutions that existed before 2027 and are not yet registered must register by 31 March 2027.

The tax and reporting guide explains what that means for a trust and what to ask your adviser.

Documents and timeline

The trustee asks for identity documents, evidence of where your money and wealth came from, and the details that go into the trust documents.

The table is our onboarding checklist.

A law firm drafts the deed, with your letter of wishes alongside it. You review the draft with your own lawyer.

We comment on how the trustee will run the powers the deed describes, so that the deed matches what will happen in practice.

A declaration of trust over Hong Kong shares or property can attract stamp duty under the Stamp Duty Ordinance (Cap. 117), so the law firm checks the terms and the asset when the structure is designed, before the deed is drafted.

After signing, the work becomes routine.

The trustee keeps the records, holds trustee meetings when decisions are needed, prepares the accounts and refreshes identity checks on a schedule set by risk.

We send you the asset report and the minutes, and you can update your letter of wishes at any time.

Timing depends on how complete your documents are and on third parties: the law firm, the bank and any company registry that records a share transfer. We give you a checklist and show where each step stands.

The step-by-step set-up guide walks through every stage and what sets the pace, and the cost guide explains what you pay for at each one.

Choosing between Hong Kong and another place

The clearest difference is who acts as trustee. In Hong Kong we act as trustee ourselves. Outside Hong Kong the service model differs by place, and each guide explains how; the jurisdictions hub lists every place, all open for new trusts.

Beyond that, weigh three things:

1. Where your family and assets are. A trustee close to the business and the bank is easier to work with.
2. Which place your advisers know best. Their familiarity with the law shortens drafting and review.
3. How much paperwork you want in one hand. One trustee and one team means fewer hand-offs.

Tax and legal comparisons between places belong with your advisers, because the outcome turns on your residence and your assets, not on the place alone.

Use the side-by-side comparison tool to put Hong Kong beside another place.

You can also browse every place we cover, or read the answers to common questions first.

When you are ready, request a quote for Hong Kong. It is an estimate based on what you tell us, not a binding offer, and we confirm it once we have seen the structure and the assets.