The Feng Shui of Asset Protection

In Hong Kong, the Chinese practice of feng shui has an impact of all walks of life. While the word literally means “wind & water”, this geomancy dictates the value of a property’s value to whom you should make friends with next. Having an auspicious number 8 on your licence plate is a status symbol. Then factories or offices with leaking pipes are considered to be of bad fortune (as water symbolises wealth).

Believers purchase feng shui books at the end of each year to get a sneak peak into the future. Yet few of them could have predicted what would have come of 2019 – a year of everlasting trade tension, Brexit-no-Brexit, as well as a series of geopolitical tug-of-war in Asia.

In a period of uncertainty, it helps to explore the topic of asset protection through the five core elements of this ancient pseudoscience.

WaterBank account in Switzerland

All wealth start with cash, and there is no better place to deposit them than the safe jurisdiction of Switzerland. The confederation has a world-renowned reputation, as well as a banking system with strong regulatory oversight. In recent years, Switzerland has also become a highly digitised wealth management hub for the sophisticated offshore depositors.

Swiss banks stand out for their streamlined approach to onboard non-residents,willing to open personal bank accounts outside their domicile. With a minimum balance of USD 100,000, customers would also benefit from a debit card to access cash worldwide, as well as a powerful online trading platform to purchase everything from U.S. equities to the most obscure local currency bond.

This solution is particularly useful to middle class individuals who venture abroad for the first time but need the comfort of full control over their asset.

Wood Secondary Residency

We plant trees in the name of sustainability. In turbulent times, families also seek secondary residency to ensure children’s future is well protected.

At Fidinam we make a distinction between citizenship and residency. In acquiring citizenship, one is expected to fully immerse in a new culture. In parallel, residency can be a bridging solution to serve specific purpose for a defined period of time.

British Citizens who are concerned by their access to continental Europe may consider the resident non-domiciled regime in Italy or Portugal. Likewise, young Asian families seeking new growth opportunities (and better schools) may consider moving to the UAE at a fraction of the cost of a full emigration to an Anglophone country.

Some of these programmes require as few as 2 days a year to reside in the country. Yet they could move and settle there at a short notice. In the case of the UAE, residents also benefit from a tax-free environment on their income and a world class healthcare system.

The key to a successful alternative residency is to understand your objective. Therefore, receiving impartial advice prior would be as important as the application process itself.

MetalTrust

The strongest defence of all is to distance oneself from his/her own asset. While it seems counterintuitive, entrusting your prized estate to a licenced trustee can protect you on an unexpected rainy day.

Trust is a tool for succession planning. Unlike a standalone will, a trust is less likely to be contested in court for its authenticity. A trustee would validate the deed and distribution mechanism in advance – often with the participation of a protector and a trust lawyer – to ensure cross-generation functionality.

As entrepreneurs expand their business worldwide, their sudden death could potentially disrupt operation. In jurisdictions such as China and Vietnam, a change of shareholder could necessitate reapproval by the competent authority. Or in the case of an IPO, the founder would often cash out at trust level (in tandem with residency planning) to maximum tax efficiency.

A trust is a practical estate planning tool for enterprising businessmen with operations in more than 3 countries/regions.

Fire Investment diversification in Australia

The fiery growth in the emerging market has slowed in recent years. Investors again look for assets in jurisdictions with sound legal protection.

Australia is a worth-looking case. Aside from being a Common Law jurisdiction, the country is intrinsically tied to Asia. New wealth generated in China, Korea and Southeast Asia allowed Australia to enjoy a decade of uninterrupted growth. Recently, a lower AUD coupled with an appetite to attract foreign investors have put Australia on the global investment heat map again.

Our Sydney office will dive into deeper details on this topic. Go check it out on this newsletter!

EarthRe-domiciliation in Singapore

Corporations do not benefit from sensationalised decision-making. But in the interest of protecting company assets, the management cannot exclude any scenario from its ongoing SWOT review. When time calls, thou shall move heaven and earth.

Singapore is known for its stability, good governance, and an increasing focus on tech. Little known is that Singapore is one of the few Asian jurisdictions that offers a route for re-domiciliation.

If an entity’s asset or yearly revenue exceeds SGD 10M and/or if it hires more than 50 employees, it is allowed to be redomiciled in Singapore.

Moving the corporate headquarters to Singapore has become a popular chatter topic among companies in the board room across Greater China. But it was a British design company, Dyson, that counts among the firsts to reap benefits from this programme. As manufacturers gradually move out of China to Southeast Asia, Singapore’s leadership within the ASEAN and a broad network of Double Taxation Avoidance Agreements also render the city state a “future proof” platform for growth.

While Fidinam cannot advise clients on feng shui, we are happy to help protect your personal and corporate assets.

Uny Chan, Manager of the Swiss/China Desk of Fidinam (Hong Kong) Limited

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