Cross-border Inheritance Practice: Practical Points of CIPS and SWIFT from a Hong Kong Inheritance Case
Introduction
In recent years, with the acceleration of the globalization process, issues related to cross-border inheritance and cross-border transfer of foreign exchange for purchase have become increasingly prominent, becoming legal challenges that many families have to confront. This article will, by combining a recent typical case handled by the team, deeply explore the legal procedures, precautions, and operational practices of cross-border inheritance and cross-border transfer of foreign exchange, with the aim of providing valuable references for readers.
I. Case Background
This case concerns the inheritance issue of the estate left by a Hong Kong resident, Ms. Li (a pseudonym), in the mainland. Ms. Li (a pseudonym) passed away in Hong Kong on December 14, 2022. Before her death, she owned 45% of the equity of a luggage company in Jiaxing City, Zhejiang Province, and had deposit accounts in several banks. Ms. Li's spouse, Mr. Qian (a pseudonym), is the sole testamentary heir and needs to handle the procedures for cross-border inheritance of the estate and cross-border transfer of foreign exchange for payment.
II. Legal Procedures for Cross-border Estate Inheritance
Handle the Chinese notarization of the Hong Kong matter
Firstly, Mr. Qian needs to handle the Chinese notarization procedures in Hong Kong, including documents such as the "Will Certification", "Statement of Kinship and Estate Status", "Declaration of Waiving Inheritance of Estate", and "Power of Attorney". These documents must be stamped and forwarded by China Legal Services (Hong Kong) Co., Ltd. before they can be used in the mainland.
● "Will Certification": Verifies the authenticity and validity of the will. In this case, Ms. Li made a will on May 12, 2014 and it was verified by the High Court of Hong Kong. All of her estate was inherited by Mr. Qian.
● "Declaration of Kinship and Estate Status": This document provides a detailed account of the decedent's kinship relations and estate situation, ensuring that no heirs are omitted.
● "Declaration of Abandonment of Inheritance": Signed by other legal heirs (such as children), it renounces the right to inherit the estate.
● "Power of Attorney": Entrust the domestic agent to assist in handling procedures such as inheritance of the estate and changes in business equity.
2. The mainland notary office issues a certificate for the inheritance and distribution of estates.
Take the Hong Kong power of attorney certificate to the local notary office in the mainland to apply for the inheritance distribution and succession certificate. The notary office will issue an inheritance certificate based on the Hong Kong documents and mainland laws, confirming the inheritance rights of the heirs.
● Verification of kinship: The notary office will verify the kinship of the deceased to ensure the accuracy of the heirs' identities.
● Confirmation of inheritance list: Based on the Hong Kong documents and the asset certificates provided by the bank, a list is made of all the inheritances held by the decedent.
● Confirmation of inheritance rights: Based on the will and the legal inheritance rules, the inheritance shares of the heirs are confirmed.
3. Change of Shareholding in Business Enterprises
If the inheritance includes company shares, it is necessary to go to the administrative department of industry and commerce with the notarized certificate to handle the change of share registration. This includes submitting documents such as the "Appointment Letter for Executive Director", "Amendment to the Articles of Association", "Shareholders' Meeting Resolution", and "Application for Company Registration and Recordation".
● Administrative penalty handling: If the company has any administrative violations, they must be dealt with in advance to avoid affecting the equity change.
● Change of legal representative: If necessary, the procedures for changing the legal representative can be handled simultaneously.
III. Cross-border Asset Transfer - CIPS and SWIFT Operational Practices
Bank deposit inheritance and withdrawal
The heir can go to the bank with the notarized certificate to handle the inheritance procedures for the deposit and withdraw the balance of the deposit under the name of the deceased. If a cross-border transfer is required, the purchase and payment of foreign exchange procedures should be carried out in accordance with the regulations of the national foreign exchange administration.
● Cash withdrawal section: To withdraw cash directly, you will be required to pay relevant taxes.
●CIPS and SWIFT: To apply for foreign exchange purchase and payment, one needs to provide documents such as notarized certificates and tax clearance certificates to the bank.
2. Special Legal Counsel Service
To ensure the smooth progress of cross-border inheritance of assets and cross-border transfer of foreign exchange for purchase, it is recommended to hire a professional legal advisory team to provide specialized services. The legal advisory team will assist in handling the following matters:
● Document organization and notarization: Assist in organizing Hong Kong documents to ensure they meet the requirements of the mainland notary office.
●Bank asset verification: Contact the bank to confirm the status of the assets under the name of the deceased.
●Legal Support: In case the notary office refuses to cooperate or there is a dispute over inheritance, we will represent both the plaintiff and the defendant to file a lawsuit with the court, and distribute the estate in the form of a mediation agreement.
IV. Legal Observations and Recommendations
Planning and preparation in advance
Cross-border inheritance involves multiple legal systems and the process is complex. It is recommended that the decedent plan ahead, make a valid will, clearly define the heirs and the distribution plan of the estate. At the same time, keep all relevant documents safely to facilitate the smooth processing of the inheritance procedures by the heirs.
2. Select a professional team
Cross-border inheritance of assets and cross-border transfer of foreign exchange purchase and payment require a wealth of legal knowledge and practical experience. It is recommended to choose a professional legal consulting team with cross-border business experience to ensure that the procedures are legal and compliant, and to avoid unnecessary legal risks.
3. Pay attention to foreign exchange management policies
Cross-border transfer of foreign exchange for purchase or payment must strictly comply with the national foreign exchange management policies. Successors should promptly keep abreast of the latest policy developments to ensure the smooth transfer of funds. At the same time, be sure to retain relevant documents such as tax payment certificates for inspection purposes.
V. Conclusion
Cross-border inheritance and cross-border transfer of foreign exchange purchase and payment is a complex and meticulous task, involving laws, policies and practical operations in multiple regions. Through the handling of this case, we have deeply realized the importance of professional legal services. We hope this article can provide valuable references for readers and help them successfully solve cross-border inheritance issues.
