China's Ministry of Finance and State Taxation Administration issued rules on July 24 imposing a 20 per cent tax on offshore trusts at every stage from establishment to distribution. Unpaid taxes on assets placed in trusts since January 1, 2023, must be settled within 90 days to avoid penalties, Reuters reports.

Singapore and Hong Kong wealth managers are closely monitoring the impact. Private banks have advised clients to seek legal advice, with some sending joint visits from tax and legal experts to explain the "fluid and messy" situation, according to sources. Loh Kia Meng, head of private wealth at Singapore law firm Dentons Rodyk, said a foreign passport or permanent residence does not automatically shield wealth from China's tax reach if economic interests remain tied to the country.

Singapore's Monetary Authority said the asset management and private wealth sectors have not reported significant disruption, though regulators are keeping close watch. Tax experts said wealthy Chinese are calculating potential bills and weighing asset sales before the grace period expires, The Straits Times reports.