The privacy protections of shell companies and trusts are being gradually peeled away through legislation.

A private banking client in Hong Kong was sentenced to six months of immediate imprisonment and fined HKD 500k for deliberately providing false information in the Common Reporting Standard (CRS) declaration, marking the first criminal conviction related to CRS in Hong Kong and signaling a stricter phase of cross-border tax information reporting enforcement. CRS 2.0 and CARF have officially come into effect, with digital assets included in mandatory reporting; dual tax residents must report to all relevant jurisdictions. The regulatory transparency of actual controllers of offshore shell companies, family trusts, and similar entities will be strengthened, with implementation expected in 2027, and cross-border exchange of crypto asset information to commence in 2028.