December 6, 2024

Advancing Business Journey

Empowering Business Excellence

Chinese HNW individuals are looking for advice as tax arrives

Chinese HNW individuals are looking for advice as tax arrives

Chinese authorities are paying increased attention to capital gains made abroad, with Hubbis reporting that the country’s tax officials are summoning HNW investors for assessment. This will drive demand for tax advice in the market—yet not all wealth managers are positioned to capitalise.

China’s move to clamp down on tax evasion is not unexpected. It is part of the government’s Common Prosperity campaign, which seeks to redistribute wealth to drive wider economic prosperity. While this is set to drive demand for international tax advice, it is unlikely to curb HNW investors’ demand for offshore investments. As per GlobalData’s HNW Offshore Preferences Analytics 2024, Chinese HNW individuals book an average of 35.5% of wealth abroad.

The reasons for this are varied, but business interests and an expectation of better returns abroad dominate. Neither driver is likely to be affected by the government’s increased focus on offshore gains. In fact, tax efficiencies are only a minor offshore driver, accounting for a mere 4% of Chinese HNW wealth booked abroad. In addition, the US—the number one booking center among Chinese HNW investors—has not signed the Common Reporting Standard, while China is a signatory. This means no automatic exchange of tax information occurs between China and the US, and centers such as Delaware, Nevada, and South Dakota remain appealing to Chinese HNW individuals looking for privacy.

chinese hnw
Source: GlobalData’s 2024 Global Wealth Managers Survey

Going forward, investors will be eager to get their tax affairs in order. Yet GlobalData’s 2024 Global Wealth Managers Survey found that only 51.7% of private wealth managers in China offer international tax advice. With demand for offshore investments only expected to pick up (91.7% of the country’s wealth managers expect the proportion booked abroad to increase), this is a lost opportunity.

Heike van den Hoevel is Principal Analyst, Wealth Management

Access the most comprehensive Company Profiles
on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free
sample

Thank you!

Your download email will arrive shortly

We are confident about the
unique
quality of our Company Profiles. However, we want you to make the most
beneficial
decision for your business, so we offer a free sample that you can download by
submitting the below form

By GlobalData






Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.



link

Leave a Reply

Your email address will not be published. Required fields are marked *