The essential guide for Russian company seeking overseas trading and wealth management platform

Executive Summary:

• In view of recent trends in Europe and North America, Hong Kong could become the next popular choice of platform to serve Russian companies and entrepreneurs for their global fiscal planning needs.
• Hong Kong offers a low tax rate, appealing Permanent Residency Scheme and vibrant multicultural environment for foreign investors seeking to establish a physical presence.
• We are highly specialized in serving clients from select countries, such as France, Mainland China and Russia. To cater to these needs, we have native speakers from all 3 regions with an aim to serve their needs better.

Hong Kong has long been a popular destination for Russian entrepreneurs and companies seeking to establish a presence in Asia. Recently, its popularity has grown even further- in February 2019, Hong Kong Chief Executive Carrie Lam informed Russian Foreign Minister Sergey Lavrov of the S.A.R government’s plans to establish a Hong Kong Economic and Trade Office in Moscow. Merchandise trading between Hong Kong and Russia in 2018 amounted to HK$35.8 billion. Meanwhile, Hong Kong continues to grow as a destination for private wealth management. In 2017-2018, the number of high net worth individuals in Hong Kong grew by 15%, according to a Wealth-X billionaire survey, while a survey by the Private Wealth Management Association indicates that the industry is projected to grow by up to 20% by 2023 and continue to diversify services.

Hong Kong offers many benefits to Russian individuals or companies seeking to operate in the region; a truly international culture with a perfect blend of east and west for over a century; a trusted, transparent legal system with fair corporate regulation, attractive tax regime, unrestricted currency exchange and free movement of capital, and a stable, commonly traded currency and a framework across systems that protects confidentiality. The China market for minerals, metals and other natural resources is another incentive for many Russian companies, because Hong Kong has functioned as a direct window to the P.R.C for decades, with all the opportunity and none of the restriction. Hong Kong banks also offer multi-currency services including RMB services, simplifying the process of currency exchange. Furthermore, Hong Kong presents an ideal platform for offshore structuring via trusts, private banking and various company structures.

The Ideal Trust Jurisdiction

Hong Kong’s trust laws are among the most favorable and reliable in the world. Hong Kong trusts are not taxed unless their incomes are generated locally, and overseas assets can allocate profits and income without being liable to local income tax. Trusts in Hong Kong are not subject to forced succession, and any such legal provisions from overseas will not be applicable in Hong Kong. Hong Kong trusts ensure confidentiality, and only the settlor and  trustee have a full view of the underlying assets. Unlike many other jurisdictions, Hong Kong trusts operate for an extended period without any time limits. This genuinely unlimited perpetuity, unlike other jurisdictions with time bound definitions of the term, makes Hong Kong ideal for long term strategic plans, including providing for long term family arrangements. We have years of experience working on personalized wealth planning with clients from around the world. Whether you want to plan succession, manage your trust or consider liquidity, our technical expertise and experience will deliver the ideal strategy for you.  In addition to wealth management, preservation and succession, our personalized trust assistance also features fiduciary assistance, rounding out a comprehensive suite of services.    

Benefits of Hong Kong as a Trust Jurisdiction

• Confidentiality protection: Legal protections ensure the confidentiality of the set up
• Protection against forced heirship from other jurisdictions
• No expiry on duration of trust- provides for generations (or as long as desired)
• Control by the settlor: investment and management at the settlor’s discretion
• World class standards for professional management and execution
• Stable legal environment
• No Taxes on foreign sourced income, Capital Gains and no Inheritance Tax
• Confidentiality

A world leader in International Private Banking

Hong Kong has one of the world’s largest banking sectors, with 200 banks from 30 countries operating locally. Many Hong Kong banks offer hybrid private and corporate banking services. Ideally, an astute international strategy would opt for an international private bank account, trust registration and company incorporation in Hong Kong with a corporate bank account in Singapore, Luxembourg, Liechtenstein or Switzerland.

We can assist with sourcing for the most appropriate wealth management platform, ensuring the success of your application and pairing you with private banking services that protect your privacy, provide flexible options, and serving your specific needs. Opening this kind of private bank account is unlike the ordinary process of contacting a retail bank branch. Offshore private banking services are usually provided by reference only, due to the priority placed on asset protection and client privacy. We can draw on our longstanding presence and contacts in the region to assure your success with accessing international private banking facilities. Bespoke wealth management services in Hong Kong are world class, and the industry is committed to further growth and innovation to clients from everywhere in the world.

Great Tax Incentive

There are many benefits to setting up an offshore  trading and investment platform in Hong Kong for Russian companies seeking to expand aboard. The corporate income tax rate is an attractive 16.5%, there is no value added tax or goods and services tax, no capital gains tax and no foreign exchange controls. Income earned overseas will not be taxed in Hong Kong. Hong Kong Company setup is simple and straightforward, allowing for full overseas ownership of foreign companies. Hong Kong also maintains a reputation for clean governance and financial transparency and is internationally viewed as a low tax jurisdiction rather than a tax haven. 

The best way to incorporate a Hong Kong company is through an experienced service provider. We can prepare all the necessary documentation, link you with other trustworthy providers such as bankers and lawyers, acquire all necessary licenses and assist with any ongoing related matters through our affiliated companies. Our native Russian speaking staff at our Russia Desk can assist all aspects of your company incorporation and business set up process without you having to visit Hong Kong in person.

With its strategic location, attractive tax regime, advantageous trust laws and wide-ranging mechanisms to protect confidentiality, as well as the rapidly developing private wealth management industry, Hong Kong is the ideal international base for your wealth management strategy. Our decades of experience and local knowledge, multi-dimensional expertise, and dedicated staff are all at your service and we are committed to securing and enhancing your global asset portfolio. Our detail-oriented services enhance the big picture by decisively navigating every step of the way. Contact us today for a personalized consultation to develop your company set up, asset structuring and long-term planning. With Fung, Yu & Co. you can approach the future with clarity and confidence.