Where succession planning across Hong Kong and the CIS stands now

The family that built its operating business in Kazakhstan, Russia or Ukraine and then moved capital to Hong Kong faces a structural gap that only grows more consequential over time. On one side sits a common-law trust system with no forced heirship and a mature firewall against foreign succession claims. On the other sit civil-law inheritance regimes with mandatory heirs' shares, residence-linked succession rules, and a patchwork of bilateral treaties that have been tested sharply since 2022. The gap between those systems is not academic. It decides which assets pass, to whom, and when – and whether a Hong Kong structure survives a challenge launched from Almaty, Moscow or Kyiv.

Succession planning across Hong Kong and the Commonwealth of Independent States requires a deliberate two-system design: a Hong Kong trust governed by the Trustee Ordinance (Cap. 29) insulates assets from civil-law forced-heirship claims, while the CIS-side position – governed by each state's domestic succession code and, where relevant, the 1993 Minsk Convention on Legal Assistance – must be assessed separately for each category of asset and each affected heir. The interaction has sharpened in recent years, and the structural risk now sits at the point where CIS-law mandatory shares meet assets the family assumed were protected.

This analysis sets out the current position across both systems, the commercial stakes that make it pressing, and the risk points our desk sees most often in cross-border CIS – Hong Kong succession matters.

What is commercially at stake – and why it matters now

CIS-origin private wealth tends to follow a recognisable pattern. Operating assets – real property, shareholdings in local joint-stock companies, bank balances held in domestic institutions – remain in the country of origin. Holding vehicles and mobile capital migrate outward, first to offshore centres, then to Hong Kong or Singapore as the family establishes a second base. The principal may hold permanent residence in Hong Kong, an investment migration (a residence-by-investment) visa in a third state, and passport documents in two or three jurisdictions simultaneously.

That layered position creates a succession question that no single legal system can answer alone. Which law governs the movable estate? Which law governs real property? If the principal dies domiciled in Hong Kong under Hong Kong conflict-of-laws rules, does that mean the CIS-side assets escape forced heirship? Almost certainly not. CIS courts apply their own characterisation of domicile, and several CIS states assert that real property situated on their territory is governed exclusively by domestic succession law regardless of any foreign trust or foreign domicile finding.

The commercial consequence is straightforward. A family that has invested a decade in structuring its holding layer may find that CIS-side mandatory heirs – spouses, children, in some codes parents – have enforceable claims in local courts that are untouched by the Hong Kong trust. The holding layer protects what it holds; it does not extinguish rights against what remains outside it.

In our cross-border practice, the triggering event is usually a death or incapacity, but the preparation window closes well before that. A CIS state can freeze local assets pending a succession dispute; a domestic court can appoint an administrator; and, in several CIS systems, limitations on challenging the administrator's decisions are short. The risk is not merely that assets pass incorrectly – it is that the process stalls at precisely the moment the family needs liquidity.

How the Hong Kong system governs the structure

Hong Kong trust law, anchored in the Trustee Ordinance (Cap. 29) as substantially reformed with effect from 1 December 2013, offers a set of structural advantages that are among the strongest in the common-law world for cross-border family wealth. Three features are directly relevant to the CIS interface.

First, Hong Kong abolished the rule against perpetuities and excessive accumulations for trusts established under Hong Kong law. A Hong Kong discretionary trust can, in principle, run indefinitely across multiple generations without the forced re-distribution that perpetuity periods impose in other common-law jurisdictions. For a CIS-origin family with a multi-generational horizon, that is a material drafting advantage.

Second, the 2013 reforms confirmed that a settlor may reserve certain powers – including the power to revoke or amend the trust, to direct investments, and to add or remove beneficiaries – without invalidating the trust. This matters for CIS-origin principals, who are often reluctant to transfer assets irrevocably before they are satisfied that the trustee and the structure perform as intended. The reserved-powers framework lets the principal retain meaningful oversight while the trust does its protective work.

Third, and most relevant to the forced-heirship context: Hong Kong's firewall provisions, strengthened by the 2013 reform, protect Hong Kong-law trusts against claims that the trust is invalid or that its terms should be overridden because a foreign law – including a CIS succession code – would give a claimant a forced or reserved share in the assets. Where the trust is properly constituted under Hong Kong law, a Hong Kong court will not give effect to a foreign forced-heirship claim simply because that claim would succeed in the claimant's home jurisdiction.

That protection is real. It is not, however, absolute across the entire asset map. The firewall operates inside Hong Kong. It does not bind a court in Almaty or Tashkent hearing a claim against a locally situated asset. And it does not prevent a CIS-law successor from obtaining a domestic judgment and then seeking to enforce it against something that is reachable from within the CIS state.

To discuss how the Trustee Ordinance and Hong Kong's firewall provisions apply to your family's current structure and asset map, write to us at info@lockhartyip.com.

How CIS succession systems operate – and where they diverge

The Commonwealth of Independent States is not a single legal system. It is a grouping of states that share a broadly Soviet-era civil-law inheritance, but each has enacted its own civil and succession code with meaningfully different rules. Any analysis that treats "the CIS" as monolithic is immediately suspect.

That said, several features recur across the major jurisdictions – Russia, Kazakhstan, Ukraine, Uzbekistan, Azerbaijan and the others – with enough consistency to frame the cross-border analysis.

Mandatory heirs' shares are the defining structural feature. In most CIS civil codes, the obiazatelnaia dolia (mandatory share) – the reserved portion of the estate that certain close relatives receive regardless of the testator's wishes – cannot be excluded by will or, under domestic law, by foreign trust. The share varies by jurisdiction but typically encompasses a spouse, minor children, adult disabled children, and parents. In some codes the share extends further. The practical consequence is that a CIS national who settles assets into a Hong Kong trust and then dies may leave mandatory heirs with a domestic claim against the estate that the domestic court will hear, regardless of what the trust deed says.

The 1993 Minsk Convention on Legal Assistance and Legal Relations in Civil, Family and Criminal Matters, to which Russia, Kazakhstan, Ukraine, Belarus, Uzbekistan, Tajikistan, Armenia, Azerbaijan and Kyrgyzstan are parties, provides a framework for cross-border succession recognition among signatory states. It does not address the recognition of common-law trusts as an asset-holding mechanism, and it does not create a mechanism for a CIS court to defer to a Hong Kong firewall provision. The Convention is a mutual-recognition instrument, not a harmonisation instrument. Each state's domestic mandatory-share rules survive it intact.

Ukraine presents a distinct position following the changes since 2022. Its succession code remains in force, but enforcement of any judgment or succession-related order involves practical questions about institutional continuity, notarial registration of estates, and access to cadastral records that are, in several regions, materially disrupted. Families with Ukrainian real property in the succession picture face a question that is as much logistical as legal.

Kazakhstan has developed its own international private law framework, including rules on the law applicable to succession of movables and immovables, that mirrors broader civil-law principles. Movable assets of a Kazakhstani national are generally subject to Kazakhstani succession law at domicile; immovable assets situated in Kazakhstan are subject to Kazakhstani law regardless of domicile or any foreign structure.

Russia applies a similar territorial principle for immovables and a domicile-linked rule for movables, subject to its own characterisation of domicile. A Russian court is unlikely to accept that an asset held in a Hong Kong discretionary trust is no longer part of the decedent's estate for mandatory-share purposes unless the trust structure meets standards that Russian courts have not yet recognised or developed a practice of deferring to.

Where the two systems meet: the three stress points

In our cross-border practice, the intersection of Hong Kong trust law and CIS succession codes produces three recurring stress points. Each operates differently, and the risk profile of a given family's position depends on which stress points are active.

Stress point one: asset characterisation. A Hong Kong trustee holds shares in a BVI holding company that in turn holds a Kazakhstani limited-liability partnership interest. Is that partnership interest a movable or an immovable for Kazakhstani succession purposes? The answer determines which law applies. If it is treated as an interest in locally situated real property – or if the Kazakhstani court looks through the BVI vehicle to the underlying land – the asset falls within Kazakhstani territorial succession law, and the Hong Kong trust layer is legally irrelevant to the mandatory-share calculation in Almaty. This characterisation risk is not theoretical. It is a live question in any structure where offshore holding vehicles sit above locally registered interests in real property, subsoil use rights, or infrastructure.

Stress point two: recognition of the settlor's capacity and intent. CIS succession codes are built around the concept of testamentary succession by will, not by declaration of trust. A CIS court examining whether a trust was validly constituted will apply its own conflict-of-laws rules to determine the governing law of the trust. If those rules point to the law of the settlor's domicile – and if the settlor was resident in a CIS state at the point of settlement – the court may apply domestic succession law to test the validity of the transfer into trust. That is a different question from whether Hong Kong law validates the trust; it is a question about which law the CIS court accepts as governing in the first place.

Stress point three: enforcement asymmetry. A Hong Kong court order protecting trust assets cannot be directly enforced in a CIS state in the absence of a bilateral treaty or a reciprocal enforcement mechanism. Hong Kong has no bilateral civil judgment enforcement treaty with Russia, Kazakhstan or the other major CIS states. That means a Hong Kong firewall ruling – even a clear one – cannot prevent a CIS domestic court from proceeding with a mandatory-share claim and awarding the claimant a share of locally situated assets. The enforcement asymmetry runs in one direction only: CIS-side proceedings can produce results against CIS-situated assets that a Hong Kong structure cannot block from Hong Kong.

A family-office principal from Central Asia asked us to review the current structure in late 2026. The BVI holding company was in order; the Hong Kong trust deed was well-drafted; but the beneficial interest in a locally registered agricultural landholding – which under domestic law could not be held by a foreign entity – remained in the principal's own name and had never been included in the succession plan. That asset was the largest single item in the estate. The mandatory-share exposure against that asset alone was substantial. The structure had been designed in Hong Kong, by counsel who knew Hong Kong law well, but had not mapped the CIS-side asset register in the same detail. Identifying the gap was the first step; the remediation involved coordinating with locally licensed counsel in the relevant CIS state to understand the options under domestic law, which were limited by the foreign-ownership restriction on the underlying asset class.

The domicile question – and why it is harder than it looks

Domicile is the concept on which much of cross-border succession analysis turns. In Hong Kong law, domicile is a common-law concept: it is the jurisdiction a person treats as their permanent home, with the intention of remaining there indefinitely. CIS civil codes use a variety of connected concepts – place of permanent residence, place of habitual abode, fiscal residence – that are defined domestically and do not map cleanly onto the common-law definition.

A CIS-origin principal who has held Hong Kong permanent residency for several years, who is tax-resident in Hong Kong under the Inland Revenue Ordinance, and who maintains a family office in Central, Hong Kong may well be domiciled in Hong Kong under Hong Kong law. Whether a Russian or Kazakhstani court reaches the same conclusion is a separate question. CIS courts have, in practice, taken a broad view of when a national remains subject to the domestic succession code. Citizenship, property ownership, family ties, and the location of the "centre of vital interests" – concepts drawn from the civil-law COMI tradition (centre of main interests) – can all be enlisted to support a finding that the deceased was, for succession purposes, a national resident subject to domestic law.

The consequence for planning is that the principal who assumes a Hong Kong domicile finding is automatic or inevitable is taking a risk that a CIS court will not share that assumption. A properly documented domicile position – residence history, tax filings, property records, the location of the family's primary social and economic life – provides the evidentiary foundation for a domicile argument before a CIS court if one is ever needed.

If you are working through a cross-border estate structure where domicile and CIS succession exposure are active issues, contact info@lockhartyip.com for a structured assessment.

Where the risk sits now – the desk's current read

The risk profile for CIS-origin families with Hong Kong succession structures has changed in the past three years, and not uniformly. Several developments matter.

First, the volume of succession disputes with a CIS cross-border element reaching Hong Kong-adjacent forums – offshore courts, arbitral tribunals with jurisdiction over trust disputes, BVI and Cayman winding-up proceedings – has increased. This is partly demographic: the generation that built CIS-origin wealth in the 1990s and 2000s is now at an age where succession is not a theoretical exercise. It is partly structural: structures put in place a decade ago, without the benefit of a full CIS-side asset review, are now being tested.

Second, several CIS states have tightened their foreign-exchange and capital-transfer rules in ways that affect the flow of assets between the CIS-side estate and the Hong Kong holding layer during administration. Families that assumed the mechanics of moving assets after death would be straightforward have found that the regulatory environment for cross-border transfers has become more restrictive. This does not change the succession law analysis, but it changes the practical question of how an estate is administered and how long that takes.

Third, the position in Ukraine remains genuinely uncertain in ways that extend beyond succession law. Families with Ukrainian real property or business interests face a question about the current legal and institutional capacity to administer an estate in affected regions that is, at present, unanswerable with precision. Our read is that prudent planning for Ukrainian assets currently involves identifying what is documentable and registrable now, before any succession event, rather than relying on post-death administration processes that may not function as designed.

Fourth, the interaction between succession planning and sanctions compliance has become a live question for a sub-set of CIS-origin families. Where a principal or a beneficial owner is on a sanctions designation list administered by a jurisdiction other than Hong Kong, the administration of their estate – the appointment of executors, the distribution of assets, the payment of trustee fees – may constitute a prohibited transaction in jurisdictions that apply those unilateral measures. Hong Kong implements United Nations sanctions and does not give domestic effect to unilateral sanctions measures of other states; but the family's assets and advisers may sit in, or interact with, jurisdictions that do. This is a compliance question that must be mapped early, not resolved during administration under pressure.

We regularly act on cross-border private-wealth matters of this kind. The succession and compliance interface is an area where the practical and legal complexity is underestimated until the event that brings it into focus.

The objection that structures solve the problem – and why it is only partly right

The most common planning assumption we encounter from advisers in the CIS corridor is that an offshore holding structure – BVI or Cayman above a Hong Kong family trust – insulates the entire asset map from CIS succession exposure. It is a reasonable intuition. And it is partially correct.

A well-drafted Hong Kong discretionary trust, holding shares in a BVI company, holding assets outside the CIS, governed by Hong Kong law, with a professional trustee in Hong Kong: that structure is well-protected from a CIS forced-heirship challenge. Hong Kong's firewall provisions are real; the absence of a recognition mechanism means a CIS court's ruling against the trust cannot easily be enforced against the Hong Kong layer.

But the assumption becomes unreliable in four situations that are, in our experience, far more common than the clean structural picture suggests.

Locally situated assets that cannot be held by a foreign entity – land, subsoil rights, licensed businesses in sectors closed to foreign ownership – remain outside the structure by legal necessity. They are in the estate.

Assets placed in the structure recently, close to a period of deteriorating health, may be vulnerable to a sham or fraudulent transfer challenge in a CIS court that applies its own standards for determining whether the transfer into trust was genuine.

Structures that have not been maintained – where the trustee has not exercised genuine discretion, where the settlor has continued to operate the underlying assets as if they were personal property – create the evidentiary foundation for a "bare trust" or "nominee" argument that collapses the structural separation.

And beneficiaries who themselves have CIS connections – residence, property ownership, employment – may face domestic claims against their interests as beneficiaries, on the theory that the beneficial interest is a movable asset situated where they reside.

The structure is a necessary condition of an effective plan. It is not a sufficient one.

The practical sequence: what an effective cross-border plan looks like

An effective succession plan across Hong Kong and the CIS jurisdictions follows a defined sequence, and the sequence matters more than any single instrument or structure.

The starting point is the asset register: a complete inventory of every asset in every jurisdiction, including assets that are legally incapable of being placed offshore. Most families underestimate how many assets fall into that category. The register maps not just what exists but where it is situated for succession-law purposes – a distinction that depends on characterisation rules in each relevant CIS state.

The second step is the domicile analysis. The principal's domicile at the expected date of death – not at the date of drafting – determines which law governs the movable estate. Where the domicile position is uncertain or contested, the plan must address both possibilities.

The third step is the structure review: does the existing trust, holding company and underlying asset map achieve the intended result for each category of asset? Where gaps are identified – CIS-side assets outside the structure, stale corporate maintenance, reserved-powers clauses that have not been exercised – those are remediation points.

The fourth step is the CIS-side plan. This is the step most often skipped by advisers who work primarily from the Hong Kong or offshore side. It requires locally licensed counsel in each relevant CIS state to assess what local mandatory-share exposure exists against locally situated assets, what instruments of domestic succession law – wills, notarial instruments, spousal property agreements, inheritance contracts where available – can reduce or manage that exposure, and what the administration mechanics look like in practice.

The fifth step is the coordination document: an instruction to the trustee, executor and locally licensed advisers that maps the order of steps to be taken at a succession event, the governing law of each asset category, the enforcement and recognition points to anticipate, and the advisers to be contacted in each jurisdiction. In our experience, the absence of this document is the single most common reason that a structurally sound plan fails at the point of execution.

Our private wealth practice covers the full span of this sequence, working with locally licensed firms on the CIS-side steps where domestic law is engaged.

For a structured review of your succession position across Hong Kong and the relevant CIS jurisdictions, write to us at info@lockhartyip.com.

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This publication is general information and does not constitute legal advice. For advice on your situation, contact info@lockhartyip.com.