Update: asset protection for a principal with the CIS exposure

For principals with assets, family members or business interests across the CIS (the Commonwealth of Independent States, the post-Soviet grouping of Eurasian states), the question of asset protection has become materially more pressing. Enforcement regimes in multiple CIS jurisdictions have broadened their reach. At the same time, Hong Kong's position as a structuring and succession hub for internationally mobile families has strengthened, particularly since the reform of the Trustee Ordinance took full effect and the inward re-domiciliation regime commenced. The window to act before a dispute crystallises – or before a forced-heirship claim attaches to unprotected assets – is, by its nature, open only until it is not.

Asset protection for a CIS-exposed principal requires a structure that respects the forced-heirship rules of the relevant CIS jurisdictions, satisfies the economic-substance and governance standards of the chosen holding centre, and places assets beyond the ordinary reach of foreign enforcement orders – without defeating any applicable legal obligation. Hong Kong, operating under the common-law system and the Trustee Ordinance (Cap. 29), offers a tested statutory firewall against certain foreign forced-heirship claims, combined with a neutral forum whose courts are recognised across a significant range of counterparty jurisdictions.

What has changed and why it matters now

Two developments are running in parallel. First, enforcement cooperation across several CIS states has deepened, with bilateral and multilateral treaty arrangements permitting judgment recognition across borders that previously offered effective insulation. A structure sound in 2020 may carry materially different exposure in 2027. Second, Hong Kong's Trustee Ordinance, substantially reformed with effect from 1 December 2013, abolished the rule against perpetuities for Hong Kong trusts and strengthened the statutory protection against foreign forced-heirship claims – meaning that a Hong Kong-law trust settled correctly is difficult to challenge under the heirship rules of a CIS domicile.

These two movements run in opposite directions. Enforcement risk has increased at the CIS end. Protection has strengthened at the Hong Kong end. Principals who have not revisited their structures since the earlier environment should treat the current moment as a genuine trigger, not a planning exercise to defer.

Our desk regularly advises CIS-exposed families on re-positioning existing structures. The pattern we see is consistent: structures designed for a lower-enforcement environment require re-engineering when cross-border legal cooperation intensifies. The re-engineering is more straightforward when it happens before a dispute is in view.

Who is affected and what to do now

The alert is most directly relevant to three groups. First, a CIS principal who holds assets through a BVI or Cayman holding entity without a properly settled trust layer above it: enforcement creditors and forced-heirship claimants can reach through the holding entity if the beneficial-ownership chain is unbroken and the structure was not properly constituted. Second, a principal with family members in multiple CIS states where different forced-heirship regimes apply simultaneously – a combination that creates conflicting succession claims unless the structure addresses which law governs. Third, a principal already in or approaching a dispute in a CIS jurisdiction, where the interim window to constitute a protective structure is narrowing.

Hong Kong has no forced-heirship regime of its own. That is a deliberate feature of the legal environment, not an accident. A Hong Kong-law trust, settled with appropriate legal advice, does not require a fixed share of the settled assets to pass to any particular class of heir. The Trustee Ordinance's firewall provisions reinforce that position against foreign claims grounded in CIS heirship rules – though the limits of that protection depend on the facts, the identity of the assets, and the governing law chosen for the trust instrument.

The immediate action is a structured review of the existing holding and succession position across the principal's jurisdictional map. That review should address: which assets are held where; what forced-heirship rules apply to each pool; whether the current structure interposes a properly constituted trust layer with genuine governance; and whether the trust's governing law provides the statutory protection the principal requires. For families considering re-domiciliation of an existing holding entity into Hong Kong – a route now available under the inward re-domiciliation regime that commenced in 2025 – the eligibility conditions and timing should be verified with current advice.

For a structured review of your asset-protection and succession position across the Hong Kong and CIS corridor, contact us at info@lockhartyip.com.

Further background on the private trust structure for CIS families is available at our related briefing on private trusts and family assets across the CIS. The mechanics of holding a family business interest through a trust are addressed in our guide on holding a family business interest in trust. Our private wealth practice covers the full range of succession, asset-protection and residence matters for internationally mobile principals.

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Related

• Private Wealth
• Private Trust Family Assets Cis Cis Briefing
• Holding Family Business Interest Trust Guide 3

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