Increasing demand
Across the world, individuals and their families are becoming progressively more international, not only by virtue of overseas residence, education and employment, but also in terms of the assets and investments they own. Confronted with these issues, settlors are increasingly looking for a trust solution which will not only allow for the integrated management of assets, but also the ability to retain involvement in their trust affairs. A PTC is often the preferred choice, offering convenience and flexibility.

The principal objective of a PTC is to act as trustee for an individual family or group of related trusts. Depending on a family’s particular situation and objectives, they can offer many benefits: allowing settlors to plan for the future ownership of family business interests, retain control in the management of underlying investments, ensure privacy in their financial affairs, and introduce beneficiaries to the disciplines of wealth management.

Involvement and control
“With traditional trust structures the settlor generally relinquishes control over a trust’s assets,” explains George Kean, Head of Private Wealth Solutions, Offshore Islands. “The special features of a PTC, however, allow the settlor and their family to remain involved in the management, investment and disposition of trust assets, and in protecting the best interests of the trust’s beneficiaries.”

Asset diversity
From high-risk investments to private operating companies, blocks of shares in public companies to fine art and super yachts, PTCs can allow a range of assets to be structured efficiently and securely. “For newly wealthy entrepreneurs, considering how to safeguard their wealth can be a complex matter,” comments George. “PTCs can offer unique benefits, as assets for which traditional trustees do not provide fiduciary services can be held and protected, notably closely held companies and other private equity interests.”

Beneficiary education
“PTCs can also serve as valuable educational vehicles, introducing the disciplines of wealth management to younger family members,” comments Bernard Rennell, Managing Director, Private Wealth Solutions, Asia. “By serving as directors, shareholders or committee members, beneficiaries can participate in matters such as family governance, value systems and culture, helping prevent the loss of wealth from one generation to the next.”

Which jurisdiction?
At HSBC Private Bank, we recognise that the choice of where to establish a PTC is an important consideration for clients and their advisers. Indeed, the regulation and incorporation of such structures can be both varied and complex.

With 22 administration and client service locations, Private Wealth Solutions offers PTC incorporation services from leading trust and fiduciary centres worldwide. Popular choices include Bermuda, the Cayman Islands, New Zealand, the British Virgin Islands, Jersey, Guernsey and Singapore. In all cases, our experts work with each client’s independent legal advisers to tailor a PTC to their individual needs.

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