CHINA: An introduction to Private Client/Wealth Management (PRC Firms)

Navigating the Complex Issues and Legal Developments in a New Era of China Private Wealth

Recent challenges and legal developments in China’s private wealth sector

In recent years, China’s private wealth sector has undergone unprecedented development and transformation, with high net worth individuals (HNWIs) facing increasingly complex challenges unique to the Chinese market. These challenges stem not only from global political and economic fluctuations but also from China’s distinct legal system, regulatory framework, market rules and family cultural traditions. The primary challenges include the following.

• Geopolitical risks – shifts in US-China relations and global geopolitical dynamics have made wealth planning increasingly complex for HNWIs. This has heightened the challenges associated with identity planning, domestic and offshore trusts, and insurance structures. For example, some clients seek to structure their wealth planning through identity arrangements, onshore and offshore trusts, wills and insurance solutions, yet they face compliance pressures such as beneficiary transparency requirements and the Common Reporting Standard (CRS).
• Foreign exchange controls and cross-border capital flow risks – China imposes stringent capital controls on foreign exchange transactions. HNWIs must navigate compliance frameworks to facilitate the lawful and efficient global allocation of family wealth and outbound investments by family enterprises.
• Heightened tax compliance scrutiny – with the advancement of China’s integrated country-wide VAT administration and monitoring tax system (the “Golden Tax System”) and reforms to the Individual Income Tax Law, global income transparency has significantly improved. As a result, tax authorities have strengthened their oversight of asset transfers and offshore account disclosures, imposing stricter compliance requirements and stepping up enforcement actions. Consequently, some clients face risks of tax reassessments, penalties and even criminal liabilities.
• Rising costs of structural adjustments – many Chinese HNWIs overlook long-term wealth management and tax optimisation strategies during the early stages of business establishment, resulting in significant costs when restructuring later. For example, as companies expand internationally, they often find their existing equity structures inadequate for tax optimisation, forcing them into large-scale corporate restructurings that require substantial time and legal costs.

Given these challenges, traditional and fragmented domestic wealth planning approaches are no longer sufficient to meet the sophisticated needs of Chinese HNW families. Effective solutions require expert legal counsel with a global perspective, integrating offshore investments, identity planning, international trust structures, and other cross-border asset management strategies to ensure both regulatory compliance and operational efficiency in executing wealth planning solutions.

Impact of capital market changes on wealth planning

During periods of capital market expansion, wealth planning primarily focuses on pre-IPO structuring, such as family trusts, equity structure optimisation and founder rights protection. However, as the pace of capital market growth slows, the focus has gradually shifted to the negotiations between investors and founders, with “earn-out arrangements” becoming one of the central points of legal disputes. Many founders enter into earn-out arrangements during the fundraising stage, committing to repurchase shares if performance targets are not met. As market conditions change, investors are increasingly enforcing these repurchase obligations, seeking further investigations and claims on the founders’ domestic and overseas assets. This has led to increased financial pressure and legal disputes between founders and investors, which has become a focal point of attention in the market recently.

Furthermore, unlike in previous capital market booms, modern wealth planning is no longer solely centred on founders’ individual interests but rather on holistic family asset planning and intergenerational succession, ensuring a balance between corporate sustainability, personal wealth preservation and family legacy. Moreover, the succession process for the next generation of entrepreneurs is accelerating. While seeking to retain corporate governance control, the founders and first generation wealth-creator are also keen to achieve tax optimisation, risk mitigation, and management team incentives through structures such as Limited Partnerships (LPs) and Employee Stock Ownership Plans (ESOPs), thereby ensuring the enterprise’s long-term stability and growth; on the other hand, they want to separate family wealth from corporate operational risks and utilise a combination of wealth management instruments – such as trusts, insurance structures, and diversified investment vehicles – to establish independent family wealth structures and a smooth and legally sound succession of assets.

Latest legal developments and their impact on wealth management

China’s evolving regulatory and legal landscape has profound implications for private wealth management, with key changes in the following areas.

• Company Law (2024 Amendment) – which revised shareholder rights, corporate governance structures and equity incentive mechanisms. It creates new opportunities for wealth management professionals and elevates the complexity of corporate wealth planning strategies.
• Judicial Interpretation (II) on the Marriage and Family Section of the Civil Code (2025 Enforcement) – which introduced new inheritance rules, affecting family wealth distribution models and joint marital property recognition. This encourages HNWIs to utilise prenuptial agreements and family trusts for effective wealth succession planning.
• Three-Tier Classification System of Trusts (2023 Enforcement) – which strengthened regulatory oversight of trust assets, imposing stricter compliance requirements. This compels HNWIs to adjust trust structures to align with evolving regulatory demands.
• Anti-Money Laundering Law (2024 Amendment) – which imposed stricter due diligence requirements on sources of wealth, cross-border capital flows and wealth management tools. This requires financial institutions to enhance compliance controls to ensure legitimate asset allocation and fund transfers.
• Charity Law (2023 Amendment) – which further clarified the legal framework for charitable trusts, optimised the intersection between family wealth planning and philanthropy. It encourages HNWIs to leverage charitable trusts and private foundations for long-term estate planning while benefiting from tax incentives.

These legal reforms have fostered the advancement of compliance and specialisation within the wealth management industry, while requiring professionals in the field to focus more on areas such as shareholder rights, family wealth succession, trust structure compliance, asset transparency, and charitable planning, ensuring that wealth management strategies for high net worth clients align with the requirements of the new regulations.

Conclusion

China’s private wealth management sector is entering an increasingly complex legal and regulatory environment, where HNWIs face challenges related to tax compliance, financial regulation, foreign exchange controls, legal risks and cross-border asset transparency. As a result, wealth planning must adopt a comprehensive approach, ranging from family governance and asset protection to tax optimisation and social responsibility planning, in order to enhance compliance and sustainability.

In today’s economic climate, wealth management is no longer just about preserving and growing individual assets, but also about constructing an integrated family wealth system. As China’s legal framework continues to evolve, entrepreneurs, HNWIs and family wealth management institutions must heighten their awareness of compliance to ensure that wealth planning is carried out effectively within a legally sound framework.

Looking ahead, China’s private wealth legal services are set to become more specialised and internationalised. Wealth professionals will need to possess the ability to integrate global resources in order to provide HNWIs with systematic legal support and tailored wealth management solutions.

中国私人财富新世代的复杂问题和法律发展导览

中国私人财富领域近期独特挑战

近年来，中国的私人财富领域正经历前所未有的发展和变革，高净值客户面临的挑战日益复杂且具有鲜明的中国市场特征。这些问题不仅受到国际政治与经济环境变化的影响，更深刻植根于中国独特的法律体系、监管框架、市场规则及家族文化特征。其中，主要的挑战包括：

• 地缘政治风险：中美关系变化和国际地缘政治风险，使得高净值客户的财富规划更具挑战，使得身份规划、境内外信托和保险架构的设计更加复杂。例如，部分客户希望通过身份规划、境内外信托、遗嘱、保险等工具和架构开展财富规划，但可能面临受益人信息透明化、CRS等合规压力。
• 外汇管制与跨境资金流动风险：中国对资本项下的外汇管制严格，家族财富的全球配置和企业“出海”需在合规框架下实现资金的高效流动。
• 税务合规审查加强：随着金税管理系统的升级和《个人所得税法》的改革，全球收入透明度提升，税务机关对资产转移、海外账户申报的监管趋严，导致部分客户面临补税、罚款甚至刑事风险。
• 架构调整成本上升：许多中国高净值客户在企业创立初期，并未充分考虑长期的财富管理与税务优化问题，导致后期架构调整的成本大幅上升。例如，部分企业在国际扩张后，发现原有的股权结构无法满足税务优化需求，被迫进行大规模重组，而这往往需要额外的时间与法律成本。

面对这些挑战，传统的、单一割裂的境内财富规划方案已难以满足中国高净值家族的需求，必须结合本土法规与全球视野，由具备国际化视野的专业财富律师结合海外投资、身份规划、国际信托架构等全球资产整合策略，提供整合性方案，并确保方案落地执行的高效性。

资本市场的变化带来财富规划的转变

在资本市场扩张时期，财富规划的重点在于上市前架构设计，如家族信托、股权架构优化和创始人权益保护。然而，随着资本市场增速放缓，重点逐步转向投资人与创始人的利益博弈，其中“对赌协议”成为核心争议之一。许多创始人在融资时签署对赌协议，承诺未达成业绩目标时回购股份。市场环境变化后，投资人要求创始人履行回购义务，并进一步寻求对创始人的境内外资产调查和追索，导致创始人与投资人资金压力与法律纠纷上升，近期已成为市场关注的焦点。

此外，区别于之前的资本市场快速发展时期，新世代下的财富规划已不再仅关注企业创始人的个人利益，而是更加注重整体的家族资产规划和代际传承，确保企业可持续发展、个人财富和家族传承之间的平衡，并且一代企业家的交班日程逐步加快。创始人希望在保持公司治理权的同时，一方面通过有限合伙（LP）、员工持股平台（ESOP）等方式优化税务、降低历史风险、激励管理层，并实现企业长期稳健发展；另一方面，同时也需要将家族财富与公司运营风险进行隔离，综合利用多种财富管理工具实现家族资产独立、和确保财富的平稳过渡。

最新法律发展与财富管理的优化

面对日益变化的监管环境和法律框架，中国的私人财富管理领域正经历一系列深刻的调整，主要体现在以下几个方面：

• 《公司法》（2024修订）：新公司法对股东权利、公司治理结构、股权激励机制等方面进行了调整，这对于财富管理的从业人员带来的新的机遇，也将促使财富管理从业者的专业水平提升。
• 《民法典》婚姻家庭编司法解释（二）（2025年实施）：新的继承制度规定可能影响家族财富的代际传承，如家庭财富的分配模式、夫妻共同财产的认定等。这将促使高净值客户在规划财富传承时更加注重财产协议、家庭信托等工具的运用。
• 《信托三分类规则》（2023年实施）：信托财产的监管逐步细化，合规要求日益提高，迫使高净值客户重新调整信托结构，以确保符合监管合规性。
• 《反洗钱法（2024修订）》：对高净值客户的资金来源、跨境资金流动及财富管理工具的透明度提出更严格的要求，以确保资产配置和资金流动的合法性。
• 《慈善法》（2023修订）：进一步明确了慈善信托的法律地位，并优化了家族财富与公益事业结合的路径。高净值客户通过慈善信托和公益基金实现财富的长期规划，同时享受税收优惠。

这些法律改革推动了财富管理行业的合规性提升和专业化发展，同时要求财富管理从业者更加关注股东权益、家族财富传承、信托结构合规、资金透明度以及慈善规划等领域，以确保高净值客户的财富管理方案符合新法规的要求。

结论

中国私人财富管理正进入更加复杂的法律与监管环境，高净值客户需要面对税务与金融合规、外汇管制、法律风险、跨境资产透明度等挑战。因此，财富规划必须从家族治理、资产保护、税务优化到社会责任规划，全方位提高合规性和可持续性。

在当前经济环境下，财富管理不仅关乎个人资产保值增值，更涉及家族整体财富体系的搭建。面对法律体系的不断完善，企业创始人、高净值客户和家族财富管理机构必须加强合规意识，确保财富规划在合法框架内实现最优效果。

未来，中国的私人财富法律服务将走向更加专业化和国际化的新时代，财富专业人士也需具备整合全球资源的能力，才能为高净值客户提供系统性的法律支持和财富管理方案。