Shanghai: Opportunities Aplenty for Trusted Advisers

Posted On: 12 Jun 2019

Patrick McCarrick shares this thoughts and insights from a recent return visit to Shanghai, exploring the opportunities and challenges in the region for CSPs such as KHT.


Today, Shanghai is China’s biggest and most prosperous city with a population of over 20 million. It is cited as being the largest centre of commerce and finance in Mainland China, which is why so many Chinese and international companies have chosen to locate there.  Additionally, it is a city that attracts millions of tourists each year who flock to witness the vertigo-inducing modern skyline, or enjoy the more traditional elements of this extremely versatile city.

When I first visited last November to attend the Art Lujiazui Conference, I met with a number of prospective clients and business partners with a view to building relationships and seeking out opportunities within the region.  Since then, we have enjoyed ongoing dialogue with a number of the contacts we made, so it felt like a good time to return to the region and explore in more depth.

Accompanied this time on my trip by my Lancaster Knox colleague, James Heathcote, from the wider Knox group of companies, we also made plans to attend the inaugural Private Client Dining (PCD) Club networking dinner in a bid to further our connections and meet with like-minded professionals. James even made time to record his insights with a quick video interview for PCD club, the results of which we hope to share in the not too distant future.  Be sure to follow us on LinkedIn to see what he had to say.

There is no denying that opportunities are aplenty within Shanghai and China for both KHT as experienced trustees, and for our colleagues within the wider Knox group of companies.  Please read on to hear my thoughts and insights into what I have gleaned from both visits to the region.

In China

In the US and UK the concept of a Family Office is very well established.  However, in China it is still a relatively new concept which presents challenges for local corporate service providers (CSP’s) and opportunities for overseas CSP’s.

From the conversations we held, it has become clear to me that there is a growing appetite in China for experienced and professional firms such as ourselves to expand and import their service offering. A lack of trust and an element of scepticism surround local firms because they are unable to demonstrate a longstanding track record for the provision of such services due to the infancy of the sector. Therefore there is a clear opportunity for CSP’s such as KHT to enter into the Chinese CSP Market, and this is something we are currently exploring.

Outside of China

Immigration by Investment offers the residents of one country an opportunity to work and live overseas.  To date, there are multiple schemes offered right across the globe by different jurisdictions.

The UK and the Isle of Man are among those offering such schemes.  Entry requires participants to make inward investment into the country they wish to visit.  Investment amounts range from £2,000,000 for individuals wishing to obtain a Tier 1 (Investor) Visa through to £200,000 for individuals wishing to obtain a Tier 1 (Entrepreneur) Visa.  Each route details a different and individual qualification criteria with other routes such as a Tier 1 (Exceptional Talent) also being available.

Other Considerations

As you might expect in an era of increasing global tax transparency, discussions naturally touched on our Foreign Account Tax Compliance (FATCA) and Common Reporting Standard (CRS) reporting obligations.  Along with the implications in respect of any structuring and planning that we might be involved with. Discussions with some individuals indicated that, in the wider global fiduciary market, there are some less than scrupulous jurisdictions/providers that are offering their services to create “FATCA/CRS Proof Structures” which assist those wishing to avoid reporting and tax obligations.

While we are aware of the desire for client confidentiality (particularly when it comes to wealthy Chinese Families who are generally more discrete and media shy compared to their US/UK counterparts), we were quick to reiterate our commitment to full compliance and regulatory reporting.  Coming from a highly regulated and respected financial jurisdiction such as the Isle of Man, our reporting obligations include those related to FATCA/CRS and the Public Beneficial Ownership Registers.

On a final note, if you are planning on being successful in this region, you may wish (if you haven’t done so already) to download the WeChat networking app.  Whilst the traditional exchange of business cards is a crucial part of business etiquette, there has been a big shift away from email to using such apps for day-to-day business transactions.


 It is clear that there is plenty of scope for opportunities within China.  However, we have identified that there is still much to learn and a long-term view is needed – along with a dash of patience in order to invest the time to establish, build and maintain good, solid connections within this exciting and vibrant region.

Download our Chinese Corporate Brochure