Senior Associate Wisdom Hon, identified as "one to watch" by Legal Week Private Client Global Elite for the second year running, is speaking at two events this week on economic substance laws and their impact - the Hong Kong Trustees' Association Conference (22 October) and Cross Border Planning for Private Client Asia (23 October), where she will also be speaking on offshore structuring for Chinese families.
While the economic substance rules introduced across jurisdictions are largely similar, there are nuances from one jurisdiction to the next. Broadly speaking 'resident entities' in each of the jurisdictions that conduct one or more 'relevant activities' as defined in the substance rules are subject to three requirements:
- the 'directed and managed' test (activities such as board meetings must occur within the jurisdiction)
- the 'Core Income Generating Activities' (CIGA) test (the entity must conduct relevant CIGAs within the jurisdiction)
- the 'adequate' test (the entity must have an adequate physical presence in the jurisdiction in terms of office space, employees etc.)
Wisdom said: "Economic substance rules have been adopted across the offshore jurisdictions where Ogier operates, demonstrating their continued commitment to working productively with key international bodies and their regulators.
"Advisers are working with their clients to ensure both compliance with the new regulations and mitigation of any operational impact that may result from them. Achieving the right balance between these is an area we've been advising many clients on."
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