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Corporate services and China

Towards the end of 2015 Jordans Trust Company were busy in China. We exhibited at the China Offshore Conference in Shanghai, spoke at a seminar entitled "Destination UK", also in Shanghai, and undertook a number of private presentations to law firms in Shenzhen.

The overriding theme of this activity was the United Kingdom and we spoke in detail on the UK corporate landscape, principles and applications of companies, limited partnerships, limited liability partnerships and trusts.

It is clear that the reputation, the efficiency and the breadth of law that the UK has to offer is of considerable interest to Chinese practitioners, investors and entrepreneurs. To quote the recently published OIL 2020 report, London (and by extension, in our view, the UK in general) has become one of a handful of global "super jurisdictions".

Our activities in China corresponded with the visit to the UK of President Xi Jinping and the dawn of a new golden era of business and cultural opportunity between the United Kingdom and China. Major Chinese infrastructural investment in the UK has been widely reported in recent months. At Jordans we are experiencing increasing interest in UK corporate entities to structure large and small scale investments and to manage global assets either directly, or via an offshore platform such as Jersey or the BVI.

One Belt, One Road

The One Belt, One Road initiative appears to have left the drawing board and is now progressing with major infrastructural projects well under way.

The Silk Road economic route heads through central and western Asia and Russia culminating in Europe.

The Maritime Silk Road passes through South East Asia, across the Indian Ocean and into the vicinity of the Seychelles. Whilst it is not yet clear how locations along the route will benefit from the projects, it is interesting to note that the Seychelles have a double taxation treaty with China and has completed negotiations with Kenya, Nairobi being a major hub on this part of the route. The Seychelles have provisions for companies to be granted special licence status, whereby they enjoy a low rate of corporation tax at just 1.5%, and have access to a surprisingly broad network of double taxation treaties.

The Seychelles have already received a delegation for the port city of Qindao and subsequently forged links through a friendly city partnership. This will augment the existing Chinese infrastructure in place on the island through a significant embassy presence.

As the Maritime route heads up the Suez Canal and into the Mediterranean it passes just south of a principal gateway to Europe – Cyprus. Cyprus is a full EU member country, with a low (12.5%) rate of corporation tax, a remittance based personal tax regime for non-domiciliaries and very attractive immigration scheme. There are no taxes due on outbound dividends and thus Cyprus is well placed both geographically and fiscally to cater for China outbound investment into the European Union.

Cyprus sees this as a great opportunity reiterated by President Nicos Anastasiades' visit to Beijing and Shanghai in October 2015 , where he reflected that Nicosia and Beijing have entered a new phase in their relationship.

Both routes culminate in Western Europe, just a channel hop for the United Kingdom.

At Jordans Trust Company, we are watching these developments closely. With a physical presence in Seychelles and Cyprus, and of course the BVI, which is deeply ingrained in Chinese outbound investment strategy, we are well placed to advise and provide services from these locations. As a business with over 150 years of pedigree in the super jurisdiction that is London, we are looking forward to the new era of international corporate structuring and tax planning and continued growth of Chinese investment into the United Kingdom.

We shall be in Hong Kong at the end of February and in China and Singapore in May. If any subscribers would like to discuss these opportunities, or for us to present to their firms, we shall be delighted to do so.

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 John Swann

John Swann

Director, Business Development
T: +44 (0)117 918 1427

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