New tax regulations on offshore trusts in China are drawing attention to the wealth of property tycoon Pan Shiyi.
Key facts
- •The new tax rules impose a flat 20 percent levy across the life cycle of an offshore trust.
- •Tax liability is triggered as soon as capital, including real estate or stocks, is transferred into an offshore trust.
- •Soho China sold significant assets in Beijing and Shanghai between 2014 and 2019.
- •Pan Shiyi’s 2021 attempt to take Soho China private with Blackstone failed.
- •Pan Shiyi currently resides in the United States.
China has introduced new tax rules that impose a flat 20 percent levy on offshore trusts throughout their life cycle. The policy, which mandates taxation at the moment capital is transferred into a trust, is being viewed as an escalation in the government's scrutiny of capital flight. The offshore financial structures of New York-based property developer Pan Shiyi have emerged as a focal point under these updated regulations.
New Tax Implementation
According to Shanghai-based tax lawyer Sarah Wang, previous legislation required individuals to pay taxes on offshore trusts but lacked the necessary implementing rules to enforce them. The new update addresses this gap by covering a broad range of assets, including stocks, bonds, and real estate.
Background on Pan Shiyi
Pan Shiyi co-founded the property developer Soho China with his wife, Zhang Xin, in 1995. Between 2014 and 2019, the company sold billions of yuan in assets located in Beijing and Shanghai, allowing Pan to avoid the property crisis that affected other developers starting in 2021. A 2021 attempt to take the company private in a deal with Blackstone was unsuccessful, and Pan has since resided in the United States.
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This article was independently rewritten by ManyPress editorial AI from reporting originally published by SCMP Business.
