A Comparative Analysis of Family Trusts: China vs. Foreign Models

In the realm of international tax planning for high-net-worth individuals, Family Trusts (hereafter referred to simply as "trusts") are an indispensable tool. According to the Guidelines on Regulating Financial Institutions’ Asset Management Business, a family trust is a service provided by trust companies to a single individual or family. Its primary objectives include wealth protection, inheritance, and management, offering customized solutions such as asset planning, risk isolation, asset allocation, education planning, family governance, and philanthropic endeavors.

While trusts are not inherently designed for tax savings, they remain a powerful legal instrument. This article examines the differences between Chinese and foreign trusts, with foreign trusts referring specifically to those established under common law systems like the UK and the US.