Hong Kong has plenty of advantages as a major offshore trust centre, even though it plans to review its Trustee Ordinance and Trust Law to enhance its international competitiveness. A low and stable tax regime, a legal sector with expertise in the trust sector, the presence of wealth management, investment advisory and private banking underscore Hong Kong's increasing popularity. The fact that Hong Kong does not require a trustee to file any documents with a government authority in relation to the trust means that the city is competing strongly with other offshore trust competitors despite older legislation and lack of industry regulation. Hong Kong's trust legislation has not been substantially updated for 73 years. Lobbying by professional bodies, therefore, encouraged the Financial Services and the Treasury Bureau to launch a consultation paper in June last year, documenting the need for change to many aspects of the existing trust law. Changes flagged should be implemented next year. 'Hong Kong is at a disadvantage with competitors like Singapore in not having modern trust legislation in place,' says Marcus Leese, partner, Hong Kong, with global offshore law firm Ogier, 'Happily, the new trust ordinance is well advanced and everyone is hopeful it will be in place shortly.' The licensing and regulation of trustees in Hong Kong, which is common among other leading jurisdictions such as Singapore, the British Virgin Islands, Jersey and Cayman Islands, is being dealt with separately, but could also help Hong Kong's reputation and attractiveness, according to John Ashwood, managing director of Vistra (Hong Kong), a global independent provider of trust, fiduciary, corporate and fund services. 'You could argue the lack of regulation is good in the sense that clients can come here and we can set up and administer trusts for them very efficiently,' he says. 'But there are few restrictions to stop anyone in Hong Kong providing trust services. There's currently no official licensing requirement, just a voluntary option to register as a trust company subject to meeting certain criteria. 'Once some regulation of the industry is introduced it will likely cut out those marginal players and add some credibility to the jurisdiction. Although many clients selecting Hong Kong as a jurisdiction aren't concerned by its unregulated environment I'm sure most of them would gain additional comfort if there was appropriate regulation and supervision. For the present, however, ultimately it comes down to the strength of the relationship and trust between the service provider and the client.' Still, the lack of industry regulation hasn't prevented Vistra in Hong Kong from picking up business from traditional jurisdictions.