Employee Benefits Trusts à Hong Kong

Employee Benefits Trusts in Hong Kong

Employers are increasingly setting up Employee Benefit Trust (EBT) structures to provide incentives to a select group of key employees or a larger group of employees upon satisfying certain benchmark criteria as a mean to retain, attract talent and promote long-term corporate loyalty.

EBTs are usually set up as discretionary trusts by the Employer Company contributing assets into the trust, mainly as cash and company shares, to be held upon trust by the trustee. Most of the benefits provided to employee beneficiaries are share-based strategies but could also include cash bonuses, deferred compensation or loan benefits.

The Employer Company will usually provide loan financing to establish the trust and enable the trustee to acquire company shares to be held for the benefit of employee beneficiaries, with awards to be allocated as per defined performance parameters listed in a set of rules governing the benefits scheme. Governance rules need to be specifically looked into with an adequate framework to be set up as guidance to the trustee in exercising their discretionary distribution powers.

Rosemont Trustees Asia Limited has in-house expertise to set-up and administer such Employee Benefit Trust structures and could liaise with your professional tax and legal advisors in the establishment of bespoke employee benefit schemes.