What's the difference between domestic trust and western trust?

The difference between domestic trust and western trust is explained from the following three points:

(1) Comparison of policies and regulations between overseas trusts and local trusts In terms of policies and regulations, since the domestic trust law is established in accordance with the Anglo-American legal system, the domestic trust law is not much different from overseas trusts in jurisprudence.

China's "Trust Law" stipulates the respective responsibilities of the trustee, the trustee and the beneficiary in trust communication, and stipulates that the trust industry refers to the industry that the trustee transfers to the trustee through trust behavior, and the trustee handles or disposes according to certain trust purposes, as well as the industrial income obtained through handling, using or disposing.

However, in practice, although Article 15 of the Trust Law stipulates that when the trustee is not the sole beneficiary of the trust, the trust can survive if the trustee dies, is revoked or goes bankrupt, and the trust industry is not regarded as its inheritance or liquidation industry. However, whether the trust industry can really end this isolation and whether the trust law is hostile to other laws such as the contract law. There is great uncertainty because there is no actual precedent.

In addition, in the transfer of trust, real estate, equity and other assets, due to the hierarchical system, it is difficult to end the complete transfer to the name of the trust plan, so there are also difficulties at the operational level.

(2) Comparison between overseas trusts and local trust companies In terms of trust companies, overseas trust companies mostly come forward as consultants, providing trust schemes, tax schemes and scheme trust structures according to the actual situation and needs of clients, and only one scheme can charge high consulting fees. After the client agrees, the trust company will help the client to set up an overseas trust and provide long-term handling/handling and consulting services, so the handling fee will be charged for many years until the trust ends.

In terms of trust establishment, overseas trusts often set up subsidiaries in offshore islands, and then transfer the trustee's assets to offshore companies, and set up directors in the companies to handle them. Before the trustee's life, the directors of offshore companies were mostly handled by the trustee himself or his designated person. After the death of the trustee, the investment made by the consultant appointed by him or the third-party investment consultant appointed by the trust company has ensured the preservation and appreciation of the trust assets. Because the trust company itself is a party to the trust contract, it will withdraw and only the trustee will voluntarily handle the trust interests. This is different from the practice that domestic trust companies entrust trust industry investment consultants.

After all, in the trust of a trust company, because its own trust will last for a long time, it requires the client to have great trust in the trust company. Most foreign trust companies have been established for decades or even hundreds of years, and have long-term excellent credit and handling experience. In contrast, most domestic trust companies were established after the founding of the People's Republic of China and are not stable. Moreover, for a long time, domestic trust affairs are mostly oriented to the supply of funds from the demand side, rather than providing wealth management solutions for high-net-worth customers, so there is a lack of experience in this area.

(3) Comparison between overseas trusts and local trusts in terms of customer needs. The purpose of setting up overseas trusts by rich Europeans and Americans is as follows:

Wealth inheritance. Establish a trust to pass the family company or inheritance trust and industry to children or grandchildren, so as to be enemies with third parties and other rubber factories. Even after the death of the client, his assets can still be distributed and disposed of voluntarily. Through trust, the trustor can not only achieve the purpose of the beneficiary after his death, but also control the beneficiary not to squander his wealth. In addition, you can avoid high taxes such as inheritance tax. At that time, Europe and the United States, including developed countries such as East Asia and Southeast Asia, levied a very high inheritance tax, as high as 70%, which was one of the primary reasons why many rich people set up overseas trusts.

Asset segregation. The client transfers a series of assets such as shares under his name to an offshore company, and the ownership of the assets is transferred accordingly, so that even if the client has debts or bankruptcy liquidation in the future, the safety of his trust assets can be guaranteed. Together, they can also hide their industrial information in this way. Other pre-marital property trusts can also ensure the separation of pre-marital property and post-marital property.

Charitable trust is similar to inheritance trust. Through the establishment of the trust, the beneficiary is designated as a charity or himself, so as to achieve the purpose of compassion for the trustee.

In China, in recent years, family wealth has accumulated rapidly, and the demand for wealth distribution and disposal may bring risks to our own trust market. With the trend of accelerated aging, old-age security and wealth inheritance, the market has also put forward demand for its own trust products.

In addition to the above requirements, there are some different characteristics.

Overseas trust, like local trust, is the first choice for investors to contribute financially. However, compared with other types of trusts in villages and towns, overseas trusts can promote the processing and inheritance of wealth. Therefore, they are easily loved and sought after by big families and become the primary way to transfer wealth.

First of all, in terms of inheritance tax, although the "Provisional Regulations on Inheritance Tax" has been issued for a long time, it has not been initially implemented so far, and there is no great obstacle for the domestic rich to pass on their assets to the next generation, which has reduced the demand for inheritance trusts in some countries.

However, the wealthy families in China often have all kinds of chewing gum when distributing their inheritance after death, and even take their relatives to court. If the domestic heritage trust can really achieve the effect of industrial segregation, there will be a great market for its own trust in China.

The second is the demand for asset transfer. For example, Wu Yajun's lover and Pan Shiyi's lover set up a trust for their shares in the company to be listed soon, which can meet the demand of transferring assets overseas and help the company to list overseas together. There are many similar demands. The new wave of immigrants has flashed the rich in China, which has different differences for the future development of China. If domestic trust companies can help the rich to set up trusts and transfer their assets overseas, it will bring great prospects.

In fact, trust products that can help investors to end their investment purposes and increase their wealth, whether overseas or local, are good trusts. Therefore, in the face of investors who are hesitant about overseas trusts and local trusts, don't hesitate so much, just choose the trust products that are most suitable for you according to your own needs.