Trusts are a system of property administration for the benefit of others that originated in English law and has been widely used in the United Kingdom and the United States for a long time.
The trust law in Hong Kong is essentially based on the English Trustee Act 1925, which was introduced in Hong Kong in 1934. The amendment to the Hong Kong Trustee Ordinance (HKTO) and related legislation was passed and came into force on December 1, 2013, which was a milestone for the trust industry since trust legislation in Hong Kong had not been updated for almost 80 years. As a result, Hong Kong’s trust regime was modernized and the territory was positioned as a critical trust jurisdiction once again.
A thorough modernization of the trust legislation has enabled Hong Kong to become one of the leading trust hubs in the world. The benefits of the modernisation of Hong Kong trust law include:
The trust industry in Hong Kong continues to grow. According to the SFC’s latest Asset and Wealth Management Activities Survey 2021, assets held under trusts in Hong Kong amounted to HK$4,719 billion (US$605 billion) as at the end of 2021, up 5% from a year earlier. Of this, 87% (or HK$4,116 billion) was managed by licensed corporations or registered institutions.
Of this total, in terms of the geographical distribution of investments, 35% was located in Hong Kong, 21% was located in North America and 14% was located in Europe (including the UK).
A total of 24% of Hong Kong trust funds are held by family offices, private trusts, charities, and other corporations.
Hong Kong Trust has a long history of over 100 years without a single case of collapse or bankruptcy of the trustees in the territory during the period. For Hong Kong’s trust industry to thrive and maintain its position as an international financial center, industry collaboration will be critical to developing a strong trust foundation and deep knowledge base.
