APAC Monthly Private Wealth Legal Developments – March 2021

Welcome to Herbert Smith Freehills' monthly private wealth industry updates in Asia.

Every month we survey ten Asian jurisdictions for legal developments concerning trust and estate planning which are of interest to the private wealth industry, and provide a succinct summary in a table format.  The jurisdictions covered in the update are Hong Kong, Singapore, China, Taiwan, Japan, India, Malaysia, Indonesia, Thailand and the Philippines. We hope that these updates will prove to be a useful resource to keep private clients, business people, and lawyers abreast of legal updates in the region.

Hong Kong

Tax-free carried interest regime bill gazetted

The Inland Revenue (Amendment) (Tax concession for Carried Interest) Bill 2021 has now been gazetted.  The proposed concessions contemplated by this bill, that being tax concessions for carried interest distributed by eligible private equity funds operating in Hong Kong, will, subject to the passage of the bill, retrospectively apply to eligible carried interest received by or accrued to any qualifying recipient on or after 1 April 2020.

Singapore

Paper issued on managing financial institutions’ remote working risks

The Monetary Authority of Singapore and the Singaporean Association of Banks have jointly issued a paper on managing risks that could emerge from remote working arrangements which financial institutions have adopted in response to the COVID-19 pandemic.  In particular, the paper examines risks to financial institutions in relation to operations, information security and technology, fraud and staff misconduct, and laws and regulations. The paper then suggests relevant risk mitigation and management measures.

China

Regulators green-light country’s third wealth management joint venture

London-based Schroders has obtained regulatory approval to enter into a wealth management joint venture with China-based Bank of Communications.  The joint venture will be foreign-controlled, with Schroders’s Schroder Investment Limited to own a 51% stake in the proposed joint venture.  This joint venture is the third such foreign-controlled wealth management joint venture to have obtained Chinese regulatory permission.

India

No general residency exemption for individuals stranded in the country due to COVID-19

The Central Board of Direct Taxes (CBDT) of India has issued a circular which rejects calls for a general exemption from tax residency determinations for individuals stranded in India due to the COVID-19 pandemic, stating that the effect of the current relevant Indian legal regime is such that there is no possibility of COVID-19-related double taxation of income.  However, the CBDT has nevertheless invited individuals who believe that they may face double taxation issues to make an application to the Principal Chief Commissioner of Income Tax – such cases will then be examined by the CBDT on a case-to-case basis.

Malaysia

Automatic penalties for failures to provide transfer pricing documents

Effective 1 January 2021, taxpayers who fail to provide transfer pricing documentation (TPD) requested by the Malaysian Inland Revenue Board are now subject to fines of between MYR20,000 and MYR100,000, and/or imprisonment of up to six months.  The Transfer Pricing Guidelines 2012 have also been revised such that taxpayers are now given 14 days instead of 30 days to furnish TPD.  Further, the Director General of Inland Revenue may now impose a surcharge not exceeding 5% on any transfer pricing adjustment made (regardless of whether or not the transfer pricing adjustment made resulted in any additional tax payable).

Thailand

SECT seeks public comments on cryptocurrency and digital asset issues

The Thai Securities and Exchange Commission, Thailand (SECT) is seeking comments on proposals in relation to the qualifications of cryptocurrency investors and in respect of a knowledge test in regards to the provision of digital asset investment services.  The SECT’s proposal is aimed at producing an appropriate mechanism for the protection of investors in relation to digital asset products.

Philippines

SECP issues notice on process for online BOTD Form submissions

The Securities and Exchange Commission, Philippines (SECP) has issued a notice which specifies the process by which a Beneficial Ownership Transparency Declaration Form can be submitted online.

The contents of this document are for reference purposes only. Some of the information comes from public sources and this may not be comprehensive, accurate or up to date; where we have relied on third party information and sources, this has not been verified by us. The document does not constitute legal advice, and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action based on this publication, and any facts in this document should be checked for your specific circumstances at the time you wish to use or refer to them.