China Tightens Offshore Controls on Wealthy Trusts and SOE Accounts

China has introduced a 20% levy on offshore trusts, requiring residents to declare and pay tax on assets moved into such structures between Jan 1 2023 and Dec 31 2025. A 90‑day window ends on Oct 22, prompting wealthy families in Hong Kong and Singapore to sell holdings and seek legal advice. The tax treats transfers as deemed disposals, taxing gains, annual trust income and distributions, and follows revenue shortfalls from land sales and a high‑profile case involving Wahaha founder Zong Qinghou’s offshore portfolio.

At the same time, central state‑owned enterprises are consolidating their overseas accounts into unified treasury hubs, with Hong Kong chosen as the preferred base. SOEs hold roughly 8 trillion yuan in assets across more than 180 jurisdictions. The move, driven by directives since 2022, aims to improve liquidity visibility, reduce foreign‑exchange risk and align cash management with mainland policy.