Recently, the State Administration of Taxation, the Ministry of Finance, and five other departments jointly issued the "Management Measures for Due Diligence on Tax-Related Information of Non-Resident Financial Accounts." Starting from July 1 of this year, financial institutions within China will conduct due diligence on deposit accounts, custodial accounts, equity or debt rights of investment institutions, as well as insurance contracts or annuity contracts with cash value. Regardless of the amount, these accounts must identify whether the account holders are non-residents through due diligence.
The "Management Measures" require financial institutions to complete due diligence on existing high-net-worth individual accounts (with a total balance exceeding 1 million USD as of June 30, 2017) by the end of 2017; and to complete due diligence on existing low-net-worth individual accounts (with a total balance below 1 million USD) by the end of 2018. For existing low-net-worth individual accounts, if the total balance exceeds 1 million USD at the end of any calendar year after June 30, 2017, the financial institution must complete the due diligence on the account by December 31 of the following year, following the prescribed procedures.
It is understood that the joint issuance by the six ministries aims to fulfill China's commitment to the G20 regarding the automatic exchange of tax-related information on financial accounts under CRS, and to standardize the due diligence practices of financial institutions regarding non-resident financial accounts. The due diligence referred to in the "Management Measures" is not a general investigation, but rather a process where financial institutions understand the tax residency status of account holders or relevant controllers, identify non-resident financial accounts, and collect and record relevant account information.
As China embarks on the first year of CRS this year, the implementation of CRS is proceeding in an orderly manner. In this context, global identity planning for high-net-worth families becomes particularly important. Having a globally accepted and tax-favorable second nationality is essential to address issues at the source.
Currently, there are many mature passport programs available in the market. How to choose the best option? At this time, the advantages of a versatile Commonwealth passport, such as those from Antigua and Barbuda, Dominica, and Saint Kitts and Nevis, become particularly prominent. These countries have developed offshore financial systems and favorable tax regimes, exempting capital gains tax, gift tax, and inheritance tax, resulting in very low tax costs, making them ideal for tax planning.
For example, with a Dominica passport, investors can apply for citizenship for four generations starting from an investment of just 100,000 USD. This grants them a second nationality in the Commonwealth, allowing them to transfer overseas assets under the Dominica identity without reporting to the tax authorities, effectively addressing CRS from the source while providing better protection against the leakage of overseas asset and wealth information.
In addition to Dominica, passports from Commonwealth countries such as Antigua and Barbuda and Saint Kitts and Nevis also offer similar advantages.
For Antigua and Barbuda's investment immigration, investors can apply for an Antigua passport for four generations by donating no less than 200,000 USD to the National Development Fund or a charitable fund, or by investing no less than 400,000 USD in a government-approved real estate project, thus safeguarding their wealth of millions.
For Saint Kitts and Nevis investment immigration, investors can apply for fast-track citizenship for the whole family for four generations by donating starting from 250,000 USD to the Sugar Industry Diversification Foundation (SIDF) or purchasing real estate projects in government-designated areas starting from 400,000 USD, allowing for reasonable tax planning and global asset allocation.
Experts from WorldWay Immigration state that in the context of tightening foreign exchange controls and the wave of CRS, obtaining a Commonwealth passport as early as possible allows for reasonable global tax planning and the freedom to enjoy tax havens; it also enables early and reasonable global asset allocation, ensuring the preservation and inheritance of family wealth.
WorldWay Immigration's major promotion for May, celebrating the 11th anniversary of the U.S. investment immigration program, is still ongoing. During this period, signing up for Commonwealth investment immigration projects will enjoy significant discounts, along with various overseas living, education, and tax sharing events waiting for you. Don't miss out on the excitement! For more details, please call the WorldWay Immigration Group hotline: 400-138-2929.
