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Trust Law/Level VIII · Trusts of the world/8.2 Civil-law and religious systems/Lesson 4

China’s trust law (2001)

How China’s Trust Law of 2001 sits beside a regulated trust-company industry, why recording property transferred into a trust has been difficult, and how regulators reclassified trust business in 2023.

Education, not legal advice. Trust law changes from country to country and state to state, and the right structure depends on your situation. Anything you sign should be drafted or reviewed by a qualified lawyer where you live.

The lean path

The cheapest, lowest-tax, simplest and most private route the law allows, best first. Each step names the rule it rests on and the condition that keeps it lawful.

  1. China levies no inheritance, estate or gift tax at present, so for most families a will or lifetime gift is the leanest transfer. Catch: transfers of real estate or shares still carry the ordinary transfer taxes, whether made by gift or into a trust.
  2. Fund a trust with cash or financial assets rather than real estate or shares: no national trust-property registration exists, so registrable assets enter only as an ordinary sale or gift (Trust Law art. 10). Catch: Beijing and Shanghai pilots are local, not a national regime.
  3. A family service trust needs RMB 1 million and at least 5 years, against RMB 10 million for a family trust (2023 classification notice, effective 1 June 2023). Catch: both are NFRA-supervised trust company products, and guaranteed principal or returns may not be promised.
  4. A civil trust with an individual trustee needs no licensed trust company but must be written, by contract, will or other document (Trust Law art. 8). Catch: registration gaps make it riskier, and trust property must be kept apart from the trustee’s own (art. 16).
  5. Create any trust while solvent: a settlor’s creditor whose interests are harmed may ask a court to set it aside, generally within one year of learning of the cause (Trust Law art. 12). Catch: a transfer made under debt pressure invites exactly that challenge.

MaterialsThe PRC Trust Law (2001), in Chinese on the National People’s Congress website (npc.gov.cn), especially Articles 3, 8, 10, 12 and 16The 2023 Notice on Regulating the Classification of Trust Business of Trust Companies, published on gov.cnLesson 1.2.6, on civil-law trust-like devices, for comparison

Wonder

  1. Why would a law say a trust has no effect if its property has not been registered?
  2. How does a trust set up between family members differ from one run by a licensed trust company?
  3. Why might a regulator sort trust business into service, management and charitable categories?

Explore

  1. China’s Trust Law was adopted on 28 April 2001 and took effect on 1 October 2001. It applies to civil, commercial (business) and public-welfare trusts (Article 3). A trust must be set up in writing, by a trust contract, a will or another written document (Article 8). Trust property is kept apart from the trustee’s own property (Article 16). Article 2 describes the settlor as entrusting property to the trustee, wording commentators have discussed because it does not plainly say that ownership passes. This lesson describes the law and does not suggest using any structure.
  2. Article 10 provides that where laws or administrative regulations require registration for the trust property, registration must be completed; if it is not, and is not done later, the trust has no effect. Practitioner sources report that no national system for registering property as trust property has been put in place, so real estate or shares moved into a trust are usually recorded as an ordinary transfer, such as a sale or gift, with the taxes that follow.
  3. Local pilots have begun to address this. From December 2024 Beijing ran a pilot for registering real estate as trust property, followed in 2025 by a pilot for shares, and similar pilots were reported in other cities, including Shanghai. Practitioners note these are local administrative pilots rather than a national statutory regime, and the tax treatment of such transfers remains unsettled.
  4. Most trust business in China runs through licensed trust companies, which are supervised by the national financial regulator: the CBRC, then from 2018 the CBIRC, and since May 2023 the National Financial Regulatory Administration (NFRA). Trust companies began offering family trusts in 2012; Ping An Trust’s product of that year is often cited as the first on the mainland. Separately, 2018 asset management rules issued by several regulators barred promises of guaranteed principal or returns on asset management products, including trust products.
  5. In March 2023 the regulator issued a Notice on Regulating the Classification of Trust Business of Trust Companies, effective 1 June 2023. It sorts trust company business into three categories, asset service trusts, asset management trusts and public-welfare or charitable trusts, with 25 sub-types. Family trusts are an asset service trust with a minimum of RMB 10 million, and a new family service trust has a minimum of RMB 1 million and a term of at least 5 years.
  6. Individuals may also act as trustees of civil trusts under the Trust Law, but the registration problem and limited practice make such trusts less common than trust company products. The law also protects the settlor’s creditors: under Article 12, a creditor whose interests are harmed by a trust may ask a court to set it aside, generally within one year of learning, or when it should have learned, of the cause.

Key facts

  • China’s Trust Law took effect on 1 October 2001 and covers civil, commercial and public-welfare trusts (Article 3).
  • Under Article 10, where registration of trust property is legally required and is not completed, the trust has no effect.
  • No national trust property registration system has been implemented; local pilots began in Beijing in December 2024.
  • Trust companies are supervised by the National Financial Regulatory Administration (NFRA), established in May 2023.
  • A 2023 notice, effective 1 June 2023, sorts trust business into asset service, asset management and public-welfare or charitable trusts.
  • Under the 2023 notice, family trusts need at least RMB 10 million and family service trusts at least RMB 1 million.

Exercise nine, six, three, one

9CollectList up to 9 features of Chinese trust law or trust practice described in this lesson or in a source you are reading (some sources give fewer), such as how a trust is created, what must be registered, who supervises trust companies and how trust business is classified.
6ClusterSort them into 6 categories: creating a trust, registration of property, trust companies and their regulator, family trusts, protection of creditors, and facts you are unsure about.
3DistillReduce the 6 categories to 3 groups: rules from the Trust Law itself, rules from financial regulators, and open practical problems.
1CrystallizeWrite 1 sentence explaining, in your own words, why registration matters so much for trusts holding real estate in China.

Fact check

Dates, figures and claims checked against the published sources listed below.

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