Open a Trust in China

Opening a trust in China means observing a series of rules and regulations mentioned by the Trust Law of the People’s Republic of China. One of our company formation specialists in China can give in-depth support and assistance for those wanting to establish a trust in China.

Quick Facts
Definition of trust	A trust represents a fiduciary relationship in a form of a legal entity in which the trustor gives the trustee the right to hold and control varied assets for the beneficiaries named in the respective trust.
Legislation	Trust Law in China
Purpose of the trust	Trusts can be established to offer legal protection for the trustor’s assets and to ensure they are distributed in accordance with their wishes.
Types of trusts in China	Civil/commercial/property management/single unit trusts
How is a trust created?	Based on an agreement signed by the settlor and trustee. Our Chinese agents can assist you.
What is the purpose of a trust company in China?	Can invest the money in varied sectors, such as real estate.
Required documents	Trust contract/testament/other legal documents comprising information about assets, distribution, beneficiaries, etc.
Period of a trust in China	Can be established by the settlor.
What are the rights of a trust settlor in China?	Must be up to date in terms of management, has the right to dismiss the trustee if he/she doesn’t act in the best interest of the settlor and beneficiaries.
Separate management is maintained (YES/NO)	YES
Is the information of a trust revealed publicly? (YES/NO)	NO
When is a trust terminated in China?	In agreement with the beneficiaries when the dissolution occurs.
Can a trust be annulled? (YES/NO)	YES
When is a trust in China inoperative?	If the trust property cannot be identified, if the purposes can harm the public interest, etc.
Working with our Chinese agents	Our experts can set up and professionally manage trusts. Dedicated services and personalized offers are at the disposal of persons interested in trusts in China.

Table of Contents

What is a trust and how many types are available in China?

A trust is the type of agreement made by two or more settlers who agree on transferring a part of their assets to trustees, assets such as: stocks, bonds, properties or loans. The trustee must manage such assets in the name of a beneficiary. The following types of trusts are available in China:

property management trusts, which can be used for the administration of non-financial assets;
single unit trusts, which can be developed by trust companies that respect the customers’ requests;
commercial trusts, which are the type of financial tools mostly used by companies involved in the real estate sector or engineering;
civil trusts, which are related to the family properties given to trustees.

Is it possible to set up charitable trusts in China?

Charitable trusts are also available in China, but are mostly overseen by governmental agencies. If you are interested in opening a trust in China, feel free to talk to one of ourcompany formation agents in China.

What is the law applicable to charitable trusts in China?

Charitable trusts fall under the supervision of the Charity Law of the People’s Republic of China, which, according to the National People’s Congress of the People’s Republic of China, was latest amended in December 2023.

How can your team help clients?

Our team can assist in the following matters:

select a suitable type of trust;
assist in drawing up the trust deed;
assist in preparing the registration documents;
offer legal representation in the registration formalities, based on the Chinese regionwhere you will set up the trust, etc.

What are the conditions under which one can set up a trust?

A trust can be registered if there is a legitimate purpose for doing so, as stated by the Trust Law in China. A trust contract or a will is needed for opening a trust, and such documents must comprise complete information like:

the names of the settlers;
the trust’s purpose;
the name of the beneficiaries of the trust;
the type of assets involved.

What institution is responsible for the registration of a trust?

In China, there isn’t a single designated authority responsible for the procedure. Instead, the responsible institution varies in accordance with the type of trust a party will register.

Who can be the beneficiary of a trust set up in China?

The beneficiary can be one of the following:

an individual;
a legal entity;
an organization.

Can a beneficiary renounce his/ her rights?

Yes. A beneficiary can renounce his or her rights granted under the trust.

Can a trustee be a beneficiary?

Yes, the trustee can be a beneficiary of a trust, however, the trustee can’t be the sole beneficiary, as per the Chinese law.

Please discover, the following infographic with details on this topic:

What are the rights of the trust settlor?

The settlor of a trust in China has a series of rights and, among these, the ones referring to the right of being informed about the management of the trust (expenses, incomes, development).

What are the rights and the obligations of the trustee?

According to the Trust Law of the People’s Republic of China, the trustee needs to be paid for such services, as agreed in the trust contract. A trustee must act in the best interest of the settlor and beneficiary of the trust and properly manage it. Trustees are obliged to keep separate managements and accounts and to avoid combining personal assets with the ones for which they are in charge.

What are the reporting obligations of a trustee?

The trustee is legally required to report on the following:

the management of trust;
the manner in which theproperty of the trust is used;
the income of the trust;
the expenses associated with running the trust.

How often is the trustee required to present reports?

On a yearly basis.

What is the duration of a trust?

The legislation does not specify a specific amount of time.

When can a trust be annulled?

If the scope of beneficiaries is not properly described, if the settlor establishes the truston illicit assets, and if the trust properties are not discoverable, the trust can be annulled.

You can also explore this video presentation:

Can I register a trust in Hong Kong?

Yes, it is also possible to open a trust in Hong Kong, however in this case it is necessary to observe the rules and regulations of the Trustee Ordinance – our consultants can offer advice on the applicable rules deriving from this rule of law.