Offshore financial products shield your wealth- Slocap.Org

More recently, the marriage in China, as a rule, was for life. However, before marriage for a Chinese woman was not always prosperous and pleasant. In accordance with tradition, by entering into marriage, women had to give up their rights, and completely submit to their husband and his family. All their lives, women served their husbands and their families, and divorce for women in China was considered a disgrace. If even some of the women managed to get divorced safely, they were called the old shoe (po xie). Second marriages were very unlikely and rare, but even if they were concluded, this did not mean that they were trouble-free, but rather even as problematic as they were to remain a loner. Being divorced was a shame not only for the woman herself but also for her parents. If the parents refused to accept the daughter back to the family, then she was doomed to survive in a society that unequivocally considered the woman as an inferior person.

Before the founding of the People’s Republic of China in 1949, men were the main labor force. Although already in the 1900s, the previous government took the first steps in the struggle for women’s rights. Mao Zedong was the one who began systematically forcing equality between the sexes, in the hope that this would help China become a world power. The first civil marriage in China was adopted in 1950. In order to achieve equality between men and women, it was necessary to take very bold steps, such as introducing a ban on the sale of the bride, organizing marriages, child engagement, concubines and legalizing divorce.

Despite the fact that both women and men had the right to file for divorce in order to invalidate a marriage, divorce was possible only in case of “mediation and counseling” failures, and the couple needed official permission from their employer or district committee before considering a divorce. In 1985, when the mechanism for the development of economic reforms in China was established and began to function smoothly, divorces were still a relatively rare event.

Since then, China’s accelerated economic growth has been accompanied by growing pressure to achieve financial success for the country, which is directly associated with an increase in the number of divorces. Between 1985 and 2009, the number of divorces in China increased by four, from 0.4 to 1.85 per 1,000 people.

Despite the fact that there were certain factors that contributed to the increase in the number of divorces, the amendment to the marriage law in 2003 was central. Formal permission from employers or district committees that were previously necessary for a divorce was canceled, and the procedure itself was greatly simplified, allowing people to obtain divorce certificates in an easier way. According to a report published by the Ministry of Civil Affairs in early 2011, starting in 2003, the number of divorces in China has increased by an average of 7.65% per year. And this trend seems to be only gaining growth.

According to a report published on May 5, 2011 in the daily newspaper, which is the best-selling in Chinese, the Beijing Times, during the first three months of 2011 compared to the same period in 2010, there was an increase in the number of couples who officially informed the state about his intention to cancel the marriage by 17%.

Statistics may be especially relevant for Pekingans, who lead this trend. From 2004 to 2010, according to government data, the number of divorces in the city was almost two times higher than in other cities of the country. Data for 2009 showed that by the number of divorces, Shanghai was practically “on the tail” of the capital, reaching 38%, compared to 39% in Beijing. Shenzhen and Guangzhou were far behind, reaching 36% and 35%.

If you try to discern the cause of the growth of divorces, the statistics indicate pressure due to the accelerated pace of life in large commercial centers in China. The sharp rise in housing prices and the difficulties faced by working career-oriented mothers. Many of them are forced to raise children in foreign cities, without ties and support of their families, which can also provoke stress, which leads to the destruction of marriage.

The fact that the Chinese generation, often called the “post-80s,” which has only one single child, began to marry only in the early 2000s, is perhaps the most frequently mentioned reason for the increase in the percentage of divorces. Selfishness, immaturity and materialism are among the characteristics associated with the generation of the “post-80s.” They grew up in a family where parents had only one child and loved him endlessly. As a rule, in addition to parents, there were two sets of grandparents, which were summed up with close parental attention.

Statistics of the Beijing District Court confirms the arguments associated with this era of parenting. The number of divorces, in accordance with the data published by the court in 2009, among young men to 30 years has doubled, compared with the previous year. 97% percent of couples under the age of 30 were the only children in the family. Today, in order for a man to be considered ready for marriage, society requires him to possess a certain wealth, but it is this attitude that creates marriages based on the mercantile approach.

More and more people in China admit the possibility of divorce, while they are preparing for this worst event, as the best way out of the situation. Divorce – and its emotional and financial consequences – this is something that the newlyweds do not think about on the wedding day, however, wealthy individuals who can lose millions should take precautions. No matter how undesirable or unexpected future events may become.

Perhaps it is an offshore investment that is the most effective way to protect assets in unforeseen circumstances, even though divorce is only one of many possible events, possession of offshore assets, as a rule, protects against the entire spectrum of threats. There are various ways in which offshore structures can be used to protect assets, and the choice of method usually depends on the specific needs of a well-off person, as well as on the distribution of onshore assets.

Offshore asset protection

Offshore companies, offshore funds, offshore trusts and a diversified combination of assets of a wealthy person are all viable methods of protecting clients’ assets in China.

All offshore financial products protect assets to some extent, but when wealthy Chinese spouses specifically seek to protect their assets from divorce, offshore trusts are considered the most favorable. In the case of a trust, there is absolutely no risk of transferring assets during a divorce, because – by their nature – the assets are not legally owned by either spouse.

In China, despite all the scandals and the threat of transparency, the jurisdiction of the British Virgin Islands is a priority when choosing an offshore jurisdiction due to its attractive tax rates, as well as the ease and cost-effectiveness of the services offered.

Chinese customers who plan to emigrate to another country fall into another category. They do not choose offshore financial centers based on their convenience and cost. Offshore trusts and other products, as well as onshore operations, such as investment in property, are often key aspects in the procedure for emigration to other countries.

The next step, after a clear definition of client assets, is deciding which offshore jurisdiction is best for the client — this process is especially important if the goal is to protect the assets during a divorce.

Usually, lawyers in China recommend that their clients categorize their assets before marriage, such as real estate, cash, stocks, and shares in a company. After that, they develop an appropriate asset management structure.

Regarding the type of assets that can be redirected to offshore jurisdiction, China believes that antiques, real estate, and securities should remain in onshore, and funds and shares can be invested in offshore. ” Except when real estate and securities can be cashed and then invested in offshore. Chinese lawyers also advise couples to sign a marriage contract in which the personal property of the spouses should be mentioned and defined before marriage. Next, the couple must agree in advance on how the property will be divided after marriage.

No matter how logical these proposals may sound, the marriage contract is still rare in China. Chinese customers have not yet accepted the concept of a marriage contract. This is due to a number of complex reasons that are beyond the legal nature. For example, emotions and personal trust.

The well-being of a certain person in China is usually associated with the fate of the whole family – either because offspring will expect their parents to support them financially in old age, or because young couples rely on their parents before becoming financially independent. Family members play a large role in managing and determining how assets are divided into marriage. Promising husbands are those who acquired real estate before marriage. Then they will be considered “suitable” from the point of view of the bride’s parents, especially if the parents are wealthy.

Such principles are especially characteristic of parents whose offspring is known as the “second generation”. Although they were also born in the eighties, this “generation” is different from the posterity of the “post-80s” known for its egoism. But these two groups are not mutually exclusive.

The “second generation” appeared in wealthy families who began to “make money” at the beginning of China’s economic reform and in the following years increased their wealth in different sizes. Having only one child, the parents feared such a possible threat as a divorce for their son or daughter.

If adequate legal measures are not taken prior to the marriage, or the marriage contract is not signed, which can equally protect both spouses, there is a risk that the family may lose most of its welfare.

Owing to the increase in divorces in China, today families who belong to the “second generation” of highly wealthy individuals and their parents think more about protecting their assets than in the past.

Some of these people took 30 years of Chinese reform and open policy to make their fortune. A sufficiently large number of representatives of the “wealthy second” and even the “wealthy third” generations appeared under such circumstances. Many countries have gone through a long period of development, but China is unique in this sense.

China differs from other countries in that, in addition to all reforms, China also has a family planning policy, which means that today many wealthy individuals are the only successors in the family.

It does not matter how big the family condition of the bride or groom is, Chinese society is not ready for marriage contracts. If someone in a pair offers to sign a marriage contract, then immediately there are conflicts and suspicions that can lead to the termination of the marriage even before it starts. Offshore asset protection is an alternative that high-income individuals in China are increasingly resorting to in order to protect their assets before marriage.

Due to the increase in the number of divorces in China, private high-income individuals are forced to look for ways to protect not only the welfare of their family but also the feelings of the future spouse.

But, despite the fact that in China, the majority of highly wealthy individuals are men who are trying to protect their assets from divorce, using offshore structures, this does not mean that everything goes according to the same scenario, when a young wife digs gold in a garden from an elderly husband Lawyers in China today advise women clients on the allocation and protection of assets in case of divorce. And women in these matters can go very far.

For example, such a situation for China is almost classic: “The client is a woman who owned assets in the total amount of RMB 100 mil. including movable property, stocks, funds, etc. She filed for divorce, a year after the wedding, accusing her husband of treason. Before marriage, she became pregnant and opened a trust in New Zealand. And the beneficiary of the trust appointed her child. “

If both spouses in China disagree by joint mutual agreement, the fact that they had previously planned everything in case of divorce allows the process to proceed smoothly and honestly towards both spouses. One lawyer in China told the following:

“My client was an investor. At that time, he owned 1 billion yuan in assets. The marriage lasted 15 years, and at the time of the divorce, his wife ran another company. They had two children, a son and a daughter, who studied abroad. The couple filed for divorce because of misunderstanding. As a result, they divorced in accordance with the contract: the husband received custody of his son, and his wife received custody of his daughter. Their joint cash, securities, and assets were divided equally. Foreign investments belonged to the husband, but the husband agreed to pay the full support of the children until their son and daughter turned 18 years old. In addition to these assets, the couple created separate offshore trusts [in the British Virgin Islands] for old age. And they also set up trust funds [in the British Virgin Islands] for their children. ”

Both legal cases show the true value of offshore asset protection and pre-planning of the future. They also argue that the more a person knows about the offshore and onshore services available to him, the more likely it is that everything will go exactly as it should in the case of a situation like a divorce.