From "Concealment" to "Transparency": The Path to Protecting Wealth Under New Rules

In the past, wealth management benefited from information barriers; today, the global trend of tax transparency has accelerated. The “panorama regulatory era” of assets has arrived, and we must reconstruct wealth protection strategies under new rules.

01 The signal is clear: four provinces and cities act simultaneously, and overseas assets can be checked with one click.

From March 25 to 26, 2025, the tax authorities in Shanghai, Shandong, Zhejiang, and Hubei simultaneously issued notifications on their official websites, all pointing to the same issue: to conduct risk responses for “taxpayers who have not declared overseas income.”

In the past six months, many taxpayers have gradually received notifications from the tax authorities, requesting them to conduct self-examinations and make corrections for the foreign income from 2022 to 2024.

The root of all this lies in the fact that the CRS (Common Reporting Standard) has been fully implemented in China. Now, tax authorities can clearly see the “assets” of Chinese tax residents in overseas banks through international information exchange. The previous method of relying on information opacity, the “stealth method”, has completely failed.

02 Architecture Penetrated: Shell Companies Are No Longer Safe, “Equivalent to Dividends” Has Become a Practical Move

Offshore shell companies, once regarded as a “tax avoidance tool,” are facing tough times. Although the personal CFC rules have yet to be released, many local tax authorities have taken strong action to investigate offshore shell structures. If a company cannot prove that it has a real office and business locally, even if profits are not distributed, the tax authorities may directly treat it as a “deemed distribution” and require back taxes to be paid domestically. Recently, some taxpayers have been asked to disclose the “ultimate beneficial owner” (UBO) of foreign-invested enterprises, signaling that the “penetrative supervision” by Chinese tax authorities has fully entered the practical stage.

03 Storm Upgrades Again: CRS 2.0 is Coming, Cryptocurrency Under Regulation

Cryptocurrency, which was often regarded as an “asset invisibility cloak” in the past, is gradually becoming transparent amid regulatory upgrades. OECD data shows that 69 jurisdictions, including Singapore, Japan, the United Kingdom, Switzerland, Australia, and the European Union, have committed to implementing CRS 2.0 and CARF (with the first information collection starting on January 1, 2027, and the first exchange in 2028). The scope of regulation has significantly expanded:

(1) Electronic currency, central bank digital currency, and various types of cryptocurrencies are fully regulated.

(2) Financial institutions are conducting stricter reviews, and must penetrate and verify “substantive business activities”; the actual controllers of “passive investment entities” will have nowhere to hide.

Under the framework of global tax transparency, attempting to use a single information barrier (such as deregistering residency or obtaining a foreign tax number) as a compliance shield has revealed its vulnerability in the face of systematic data audits.

04 The path is clear: from “concealment” to “compliance”

In the current era of complete asset transparency, the wealth management mindset of high-net-worth individuals urgently needs to shift: from the past focus on “how to hide” to the future focus on “how to place”.

Step 1: Conduct a comprehensive inspection and perform a “deep examination” of the assets.

We recommend putting the “compliance health diagnosis” of assets on the agenda, communicating with your family office team, systematically reviewing the global asset layout, past declarations, and funding connections, identifying declaration gaps and structural flaws formed by historical reasons, and clearing potential hazards in advance.

Step 2: Make good use of tools to build a solid protective network with legal frameworks.

It's time to reassess the traditional model of “personalized asset management”. It is recommended to seriously consider using professional tools such as family trusts and family offices based on family structure and inheritance needs. The core value of these tools lies not in tax avoidance, but in achieving risk isolation, long-term protection, and orderly inheritance of assets within a compliant framework.

Step 3: Identity Planning, Managing Tax Residency Status

Tax residency status is the basis for CRS information exchange, requiring a systematic sorting and establishment of a complete chain of identity evidence (including duration of residence, family ties, economic life focus, etc.), and under the premise of compliance, reasonable planning and arrangement of tax identity should be made.

Wealth management and inheritance involve multiple professional fields such as law, finance, and taxation. Entrepreneurs should not only rely on their valuable experience but also communicate with a team of experts with extensive practical experience based on early planning. They should formulate suitable plans according to the family's actual situation. Structural adjustments are a cautious and long-term process. Over time, family circumstances and legal environments may change, and the professional team should regularly review and adjust the plans to ensure they always meet the family's actual needs. Times have changed, and only by actively embracing compliance can we ensure steady and long-term progress.

**$ZEC **$PORTO