As China’s economic growth slows and fiscal pressures mount, authorities are reportedly expanding tax enforcement to offshore trusts, which have long been used by wealthy Chinese individuals to protect assets, manage inheritance, and mitigate financial and political risks.
Sources inside China said that tax authorities in Shanghai, Jiangsu, Shenzhen, and other jurisdictions have begun requiring owners of offshore trusts to disclose detailed financial information, including dividend income and capital gains from share sales. Shanghai reportedly began collecting information on income earned during the previous two years in early 2025. In one reported case, a local tax bureau imposed a 20 percent tax on investment income along with additional penalties. The campaign targets trusts established in offshore jurisdictions such as the Cayman Islands, the British Virgin Islands, the Cook Islands, and Hong Kong.
A 2023 study found that the Chinese business elites’ use of offshore family trusts accelerated after 2018, with founders of more than 60 overseas-listed Chinese companies establishing such structures. According to the China Business Journal, in 2018 alone at least 15 Chinese entrepreneurs listed in Hong Kong established offshore trusts, transferring an estimated US$28.5 billion in assets overseas. They included Alibaba founder Jack Ma, PDD Holdings founder Colin Huang, Xiaomi founder Lei Jun, and JD.com founder Richard Liu (Liu Qiangdong).
Analysts believe most wealthy individuals are unlikely to conceal offshore assets, as their businesses, families, and core assets remain closely tied to China, making the legal and political consequences of noncompliance potentially severe. Instead, many are expected to adopt a strategy of public compliance while quietly restructuring their holdings, redesigning family trust arrangements, and accelerating the overseas relocation of assets—and, in some cases, their personal residency.
Source: Epoch Times, June 5, 2026
https://www.epochtimes.com/gb/26/6/4/n14782255.htm