The Study On New Hope Service’s Establishment Of Overseas Family Trust

At present,most private enterprises in China exist in the form of family enterprises.Family enterprises integrate the characteristics of family and enterprises,so it is relatively more complex in terms of enterprises’ governance and inheritance.In recent years,many domestic family enterprises have gradually entered the window period of intergenerational inheritance.Family enterprises owners have constantly sought an effective path for family enterprises’ governance and inheritance.Family trusts are favored for their flexibility and variety.The modern family trust originated from the “usufruct system” of Britain in the 11 th century.After years of development overseas,its application has become more mature,but the development of family trust in China is still lagging.In 2012,the “Wu Yajun’s Divorce Case” brought the overseas family trust into the public’s view for the first time.By taking this opportunity,the public learned about family trust’s ability to isolate risks.The next year,the first family trust product appeared in China.However,due to the imperfect development of related systems,family trust has been rarely used in China’s capital market.Until 2018,the China Banking and Insurance Regulatory Commission issued The Notice of the Ministry of Trust on Strengthening and Standardizing the Supervision of Trust in the Transition Period of Asset Management Business(hereinafter referred to as the 37 Document)which clarified the definition of family trust.In the same year,many family enterprises owners went overseas to set up family trust and put corporate equity into it,which set off a boom in the development of family trust.Based on the background,this thesis takes New Hope Service as the case,analyzes the behavior of family enterprises’ establishing overseas family trust,explores their reasons and effects,and draws relevant conclusions and inspiration.Firstly,this thesis briefly introduces relevant background,combs the relevant research from three aspects of the connotation of family trust,the motivations and effects of establishing family trust.Then,the research ideas and methods are put forward.Secondly,this thesis clarifies the concept,development,characteristics,and types of family trust.The basic motivation for family enterprises to establish family trust is summarized from four aspects of wealth inheritance,family governance,risk prevention and tax planning.There are three models for family enterprises to set up family trust.The effects of establishing family trusts are summarized from the three aspects of operating effects,governance effects and inheritance effects.And four relative theories are briefly introduced.Thirdly,this thesis introduces the basic situation of New Hope Service,combs the specific process of establishing overseas family trust and its placement in the listing structure.On this basis,it is concluded that the motivation for New Hope Service to establish family trust is mainly to help family inheritance,improve corporate governance,and achieve low-cost listing.Fourthly,this thesis probes into the effects of establishing family trust from three perspectives: business policy,corporate governance,and corporate heritage.In terms of effects in business policy,this thesis compares the financial data before and after the establishment of the family trust.The data shows that after the establishment of the family trust,the company has improved the dividend distribution,optimized the agency efficiency and agency cost,and paid more attention to long-term investment.In terms of effects in corporate governance,this thesis focuses on analyzing the equity structure,the governance structure and the manager incentive.The establishment of family trust profit the stability of enterprise equity structure,achieve internal checks and balances,and motivate professional managers.In terms of effects in corporate inheritance,this thesis analyzes the function of family trust and the actual situation of New Hope service.Establishing family trust profit the inheritance of corporate wealth,effectively avoid the potential risks of families and enterprises,and reduce the tax pressure of inheritance.Finally,according to the above analysis,the conclusion and summarization of the experience and enlightenment of family enterprises’ establishing family trust.Through the analysis of the case of the establishment of family trust in New Hope Service,the following conclusions were draw:(1)The establishment of family trust in family enterprises and the introduction of professional managers will help to improve the long-term business policy;(2)The establishment of family trust is conducive to realizing the “separation of four rights” of family enterprises and improving the governance;(3)The establishment of family trust can help family enterprises achieve multi polarization inheritance and reduce risks and costs of inheritance.On this basis,the following enlightenment was draw:(1)family enterprises can reasonably use equity family trusts to improve corporate governance and inheritance,but they need to be alert to family members’ behavior of seeking private interests;(2)Domestic trust institutions can integrate multiple resources to provide industrial chain services of business management for domestic family enterprises;(3)The laws and regulations related to trust and supporting mechanisms still need to be constantly improved.