In the New Era
What is a Trust?
Trusts are strictly regulated and protected by law. A trust is a legal arrangement where one party (the truster/settlor) transfers assets to another party (the trustee), who holds and manages those assets for the benefit of someone else (the beneficiary / beneficiaries). The beneficiaries may include you and your family.
Advantages
- Avoid probates
- Provide privacy
- Control asset distribution
- Optimise taxes
Why Opt for a Hong Kong Trust?
Hong Kong is a leading international trade and financial centre. The Rule of Law has fostered prosperity through vibrant commercial activity. Hong Kong has low tax rates, a linked currency exchange rate with the US dollar, and unrestricted fund movement.
Hong Kong is one of the few places worldwide that offers perpetual trusts, enabling individuals to preserve their wealth indefinitely, without the need for withdrawal. Moreover, Hong Kong law now permits settlors to reserve investment management powers after assets are transferred to trusts, allowing them to seize opportunities as they arise.
Well-Established Legal System
Robust Financial Infrastructure
Favourable Tax
Cross-Border Wealth Management
What is a Digital Trust?
We provide customers a one-stop fintech trust management platform that protects their assets. Through the secure trust online platform, customers can manage multiple assets at any time. Our platform empowers customers to efficiently and securely manage a diverse range of assets, including digital assets, via offshore digital asset custody.
Advantages:
- Convenience
- Accessibility
- Efficiency
- Flexibility
- Transparency
- Security
Alternative Banking Solution
With traditional financial institutions and digital assets increasingly intertwined, on-ramps and off-ramps are constantly required. Therefore, there is a demand for a comprehensive and secure treasury hub that serves as an alternative banking solution.
Asset-Linked Credit Card
Spend with your asset-linked credit card
Global Bill Payment
Settle your utility bill payments on one platform
Investment Management
Manage stock and asset investment on one platform by yourself
Asset Injection
Support all-assets-class injection into digital trust
The solution goes beyond traditional banking, with multiple offshore bank accounts to connect global financial institutions.
The Challenges and Opportunities for Web3 Development in Hong Kong
Julia Charlton
Principal Partner of Charltons
There remains a big mismatch between the energy in this market, which could be seen from the numerous unregulated crypto exchanges, prior to the regulation which came into effect.
Julia acknowledges the presence of both over-regulated and unregulated areas in the crypto world. She highlights that many individuals involved in crypto no longer desire complete absence of regulation. Instead, they seek sensible, efficient, and transparent regulations that provide clarity and enable smooth operations, particularly concerning bank accounts and customer interactions.
Bosco Lin
Board Advisor of AUDD Digital
I think the challenge here is how the government or regulators all around the world are trying to restore the confidence from the public side.
Bosco acknowledges the positive efforts of the Hong Kong government and regulators in adopting a more inclusive approach to help individuals understand and embrace emerging technologies and the opportunities they bring.
Jason Magnus
Co-Founder of Khronos Holdings & Metamatic Group
I think Hong Kong has the most fantastic foundation in traditional finance. If we can shift some of this goodwill and trust into Web3, it would lend Web3 certainly a lot of legitimacy in the city.
Jason believes that achieving regulatory clarity aligned with the government’s Web3 aspirations will encourage financial institutions to adopt digital assets. This, in turn, will lead to a positive shift in investor sentiment towards embracing these assets. As Hong Kong aims to become the Web3 hub of Asia, Jason emphasizes the importance of collaboration among various stakeholders, forming a unified approach to support this vision successfully.
Eugene Yeung
Tax Partner of KPMG
I specialise in TMT (Technology, media, and telecom), new economy, and also including crypto or digital asset space. Speaking of this role, it’s actually a good job because there are actually no or very limited tax rules around crypto or digital assets.
Eugene acknowledges the inherent risks and uncertainties associated with crypto trading, particularly regarding tax obligations in Hong Kong. The lack of clear regulations raises questions about how cryptocurrencies should be classified, whether as assets or rights. This lack of clarity can have both positive and negative implications. While it provides some flexibility, there is also the risk of unknowingly violating regulations, as interpretations may change over time.
The On/Off-Ramp Difficulties Amid the Bank Restrictions
Julia Charlton
Principal Partner of Charltons
Julia acknowledges that the on/off-ramp concept involves transitioning between fiat and crypto currencies, which can be challenging. There are limitations in Hong Kong leading people to convert fiat to crypto overseas and remit it back. Since crypto world can move across jurisdictions without restriction, this restriction seems unjustified. It is crucial to have clear anti-money laundering (AML) guidelines, no matter what regulation is in place.
In many cases, seeking clarity from regulators like the SFC leads to advice to consult a lawyer, making it difficult to get answers. The FTX case, although unrelated to Hong Kong, had connections to the city. It was primarily an old-fashioned fraud scheme rather than a crypto scandal. The ease of moving crypto without accountability may have exacerbated the situation.
Similarly, Julia explains the JPEX case appeared to involve misrepresentation, as the SFC denied JPEX’s claims of regulation in various jurisdictions. This fraudulent behaviour could have occurred in any industry. However, these issues prompted Hong Kong’s regulators to form a joint task force with the police to address crypto-related concerns. This development is positive but needs to continue swiftly. The problem of transitioning between crypto and fiat requires more bridging efforts to bring crypto into the mainstream effectively.
Challenges of Crypto Payment Adoption in Everyday Life
Bosco Lin
Board Advisor of AUDD Digital
Bosco acknowledges that the payment industry has a long history and has evolved, especially with the rise of fintech in recent years. Technologies like QR code payments and mobile transactions have become more popular. Bosco believes that using blockchain and cryptocurrencies will be the next wave of innovation, offering many possibilities and advantages such as fast and secure cross-border transfers.
However, challenges remain in terms of accessibility, acceptance networks, and educating people about the value of cryptocurrencies like USDT and BTC. Bosco emphasises the importance of government support and education to encourage the development and adoption of crypto in various payment systems.
How Investors Should Enter the Web3 Space
Jason Magnus
Co-Founder of Khronos Holdings & Metamatic Group
Jason explains that unless someone is already deeply involved in crypto as an investor or a family office, they would need to enter the space through a third-party specialist known as a Web3 specialist. He admits that the language and terminology used in this field can be overwhelming at first. Jason’s personal entry into the space was by backing a token-focused fund after conducting thorough research on how Web3 funds operate and differ from traditional funds. He distinguishes between crypto-native individuals, who tend to be young and have a disdain for the fiat system, and crypto-focused individuals, who are experienced professionals from traditional financial institutions and have embraced the new economic system.
Jason believes that as the crypto space develops, major financial institutions like Goldman Sachs and BlackRock will establish their own specialized divisions. Additionally, he anticipates the emergence of superstar Web3 specialist asset managers and hopes to support one of them.
The Benefits of Setting Up a Trust in Hong Kong
Eugene Yeung
Tax Partner of KPMG
Eugene explains that when considering the use of digital trust, there are two important layers to consider. The first is to clearly define your objective and understand why you want to use a trust. Many clients use trusts to consolidate their family’s assets, allowing for easier management. Although they may not have legal ownership, they can still control the assets through trustees and trust documents.
The second layer involves trusting the trustee or trust company. In Hong Kong, being a trustee is a regulated activity, so it is important to ensure that the chosen trustee company is trustworthy and holds necessary securities.
Eugene also mentions that the tax benefits of using a trust in Hong Kong are relatively small, as the tax environment is already favourable. However, in jurisdictions with different tax regulations, using a trust can provide benefits for succession planning and asset transfer to the next generation. To make informed decisions regarding trusts, Eugene advises seeking professional advice from lawyers, accountants, and trustee companies.
How People Can Bridge the Gap Between Web3 and the Real World
Eugene Yeung
Tax Partner of KPMG
Eugene suggests that in order to navigate the real world, it’s important for individuals like Jason to actively participate in Web3 and gain a better understanding of it. By educating themselves and becoming advocates, they can have a voice in shaping government regulations and support. Eugene emphasizes the significance of education, raising awareness, and being proactive advocates for the crypto community.
Jason Magnus
Co-Founder of Khronos Holdings & Metamatic Group
Jason agrees with Eugene’s point and suggests that the easiest way to embrace Web3 is by considering it an essential part of the real world. He encourages individuals to jump on the learning curve, acknowledging that the transition from Web2 to Web3 may be more challenging than previous shifts.
To get started, Jason recommends engaging directly with Web3 applications. This can involve setting up a metamask wallet or purchasing an NFT. For those unfamiliar with Web3, he advises researching how their specific industry intersects with blockchain and Web3 technology. For example, individuals in financial services can explore stablecoins and international settlements, while those in real estate can look into tokenization or REITs. Jason also mentions that for individuals in the art industry, exploring art NFTs could be a relevant avenue to consider.
Bosco Lin
Board Advisor of AUDD Digital
Bosco believes that the most challenging aspect of getting started with crypto is knowing how to begin. He advises people to seek guidance from friends, companies, or partners who have experience managing digital assets. Additionally, Bosco suggests trying out activities like bidding, as mentioned by Jason, to gain practical experience. However, if dealing with significant amounts of assets, Bosco emphasizes the importance of consulting experts for assistance.
Julia Charlton
Principal Partner of Charltons
Julia agrees with the previous points and adds that it’s crucial to take practical steps in understanding crypto. Setting up personal wallets and accounts, experiencing the challenges of passwords and security, can provide valuable insights. However, she suggests exploring and supporting Web3 companies in Hong Kong as well. Julia encourages individuals to invest in or familiarise themselves with companies operating in the Web3 space and actively engage in the conversation surrounding them.
