New legislation in respect of trusts in Hong Kong came into force in December. Prior to the amendments, the Trustee Ordinance was essentially a re-enactment of the 1925 English Trustee Act 1925, introduced into Hong Kong in 1934 and therefore an overhaul of the law was well overdue. Pearl Lam explains how the reforms are in line with changes in the law both in England and Singapore and therefore enhance Hong Kong’s competitive edge.
These include a review of the trustees’ duty of care and exemption clauses, and a reform of key trustee powers, including their power to insure, power as to self-remuneration, power to appoint agents and powers in respect of authorised investments. In respect of settlors, new provisions allow increased ability to reserve powers of investment and asset management and protection against forced heirship claims.
Hong Kong has firmly brought itself into competition with other comparable jurisdictions with these amendments to the Trustee Ordinance. With the modernisation, and the absence of licensing requirements, it becomes an attractive jurisdiction for professional trustees to set up trust companies and will no doubt attract more trust business for sophisticated succession planning purposes, particularly in Asia where dynastic trusts are popular.
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