Insights

Glossary

Plain-English definitions of the terms that come up in cross-border structuring, banking, tax and residence, from ATED to VASP.

A

ACPR: Autorité de Contrôle Prudentiel et de Résolution. The French banking, insurance and payment-services regulator, part of the Banque de France.
ADGM: Abu Dhabi Global Market. An English common-law financial free zone in the UAE, with its own civil and commercial courts and the FSRA as regulator.
AIFMD: EU Alternative Investment Fund Managers Directive. Governs the authorisation, marketing and operation of alternative investment funds in the EU.
AMLD6: The EU's Sixth Anti-Money Laundering Directive, harmonising AML criminal-law standards and predicate offences across member states.
Annual return: An annual filing required of most companies to confirm key statutory information (directors, shareholders, registered office). Called a confirmation statement in the UK.
Apostille: An authentication added to a public document for use abroad under the 1961 Hague Convention. Required for cross-border corporate filings in most reputable jurisdictions.
ATAD: EU Anti-Tax Avoidance Directive (ATAD I and II). Establishes CFC rules, interest-limitation, hybrid-mismatch and exit-tax requirements across EU member states.
ATED: UK Annual Tax on Enveloped Dwellings. Applies to residential property held through enveloped (corporate) ownership over £500,000, with reliefs available for genuine commercial use.

B

BADR: UK Business Asset Disposal Relief (formerly Entrepreneurs' Relief). A reduced CGT rate on up to £1M of lifetime qualifying business gains: 10% until April 2025, 14% from April 2025 and 18% from April 2026.
BaFin: Bundesanstalt für Finanzdienstleistungsaufsicht. The German integrated financial regulator covering banking, insurance and securities.
Bearer share: A share owned by whoever physically holds the certificate, with no name on the register. Largely abolished under FATF standards; surviving regimes require immobilisation with a custodian.
Beneficial owner: The natural person who ultimately owns or controls a legal entity. Reportable under modern AML and BO-register frameworks.
Beneficiary: A person or class of persons named as the intended recipient under a trust or foundation.
BEPS: OECD Base Erosion and Profit Shifting project. Fifteen actions reshaping international corporate tax since 2015, including substance, treaty access and Pillar Two.
BO register: Beneficial Ownership register. Required in most modern jurisdictions; access tiers and materiality thresholds vary by country.
BVI BC: British Virgin Islands Business Company under the BVI Business Companies Act 2004. The most-used offshore corporate vehicle globally.

C

CARF: OECD Crypto-Asset Reporting Framework. The crypto equivalent of CRS, extending automatic information exchange to crypto custodians and exchanges from 2027.
CASP: Crypto-Asset Service Provider. The authorised entity category under EU MiCA: broadly equivalent to a VASP outside the EU.
CBI: Citizenship by Investment. A passport granted in exchange for qualifying investment or contribution. Distinct from CBI (Central Bank of Ireland) in fund contexts.
CDD: Customer Due Diligence. The baseline KYC review every regulated firm performs at onboarding, including identity, address and source-of-funds verification.
Certificate of good standing: A registry-issued certificate confirming a company is current on its filings and not subject to strike-off. Routinely required for cross-border transactions.
Certificate of incumbency: A document listing the current officers, directors and shareholders of a company. Routinely required for bank-account openings.
CFC rules: Controlled Foreign Company rules. Home-country tax rules that attribute income of offshore subsidiaries back to a domestic taxpayer. Almost every developed jurisdiction operates them.
Charging order: A US-law mechanism limiting a judgement creditor's recovery from an LLC to distributions, rather than dissolution. Stronger in some states (Wyoming, Nevada) than others.
Charter: The constituting document of a corporation in US and Caribbean jurisdictions. Equivalent to the memorandum and articles of association in commonwealth systems.
CIMA: Cayman Islands Monetary Authority. The integrated regulator for banking, insurance, funds and trust services in the Cayman Islands.
Confirmation statement: The UK annual filing confirming a company's key statutory data (directors, shareholders, PSCs). Replaced the annual return in 2016.
Continuation: The corporate redomiciliation process by which a company changes its jurisdiction of incorporation without dissolution or loss of legal personality.
Correspondent banking: A bilateral arrangement under which one bank holds accounts for another. The post-2018 de-risking trend has constrained offshore correspondent access.
Co-trustee: A trustee appointed alongside one or more others. Decisions require majority or unanimity as specified in the trust deed.
Covered expatriate: A US-law category triggering the section 877A exit-tax on citizenship renunciation, based on net-worth, average tax-liability and certification tests.
CRS: OECD Common Reporting Standard. The automatic exchange of financial-account information between participating jurisdictions, active since 2017.
CySEC: Cyprus Securities and Exchange Commission. Regulates investment firms, funds and crypto-asset service providers in Cyprus.

D

DAC6: EU Council Directive 2018/822 requiring intermediaries to disclose cross-border tax arrangements meeting prescribed hallmarks.
DAC7: EU directive requiring digital platforms to report income earned by sellers to tax authorities, effective from 2023.
DAC8: EU directive extending tax information exchange to crypto and certain other assets. Effective from January 2026, with first reporting in 2027.
Deemed domicile: UK concept treating a long-resident individual as UK-domiciled for IHT purposes after 15 of the previous 20 tax years. Replaced in 2025 by the long-term-resident test.
DFSA: Dubai Financial Services Authority. The regulator for financial services within the DIFC free zone.
DIFC: Dubai International Financial Centre. An English common-law financial free zone in the UAE, with its own court system and the DFSA as regulator.
Director on the ground: A director resident in the jurisdiction of incorporation, attending board meetings locally. Required for credible economic substance.
Discretionary trust: A trust under which the trustee has discretion over distributions among a class of beneficiaries. The most flexible common-law trust form.
DLT: Distributed Ledger Technology. The technical category encompassing blockchain and similar consensus-based ledger systems.
DMCC: Dubai Multi Commodities Centre. A UAE free zone used by commodity, trading, fintech and crypto entities.
Dynasty trust: A trust designed to operate across multiple generations, exempt from the rule against perpetuities in qualifying jurisdictions (Nevada, South Dakota, Wyoming, Cook Islands).

E

ECI: US Effectively Connected Income. Foreign-person income connected to a US trade or business, taxed at graduated US rates.
Economic substance: Real economic activity in a jurisdiction (directors on the ground, premises, employees, decisions made there). Tested under Caribbean and Crown Dependency substance regimes since 2019.
EDD: Enhanced Due Diligence. The heightened review required for higher-risk customers: PEPs, complex structures, crypto-source funds and high-risk jurisdictions.
eIDAS: EU Regulation 910/2014 governing electronic identification and trust services for cross-border transactions, including qualified electronic signatures.
Electronic signature: A digital signature recognised as legally equivalent to a handwritten one in most modern jurisdictions, subject to specific format and identity-verification requirements.
EMI: Electronic Money Institution. A regulated entity authorised to issue electronic money and provide payment services under UK, EU and other regimes.
EMT: Electronic Money Token. A MiCA category for crypto-asset tokens referencing a single fiat currency.
ETBUS: Engaged in a Trade or Business in the United States. The test that triggers US tax exposure for foreign persons on connected income.
Excluded property trust: A UK IHT structure under which non-UK situs assets settled by a non-domiciled settlor fall outside the UK estate, subject to specific conditions.
Exit tax: A deemed-disposal tax charged on cessation of residence in certain countries: Germany (Wegzugsteuer), France, US (section 877A), Canada, Australia and the Netherlands.

F

FATCA: US Foreign Account Tax Compliance Act. Requires non-US financial institutions to report US-person accounts to the IRS, backed by 30% withholding.
FATF: Financial Action Task Force. The inter-governmental body setting global AML and counter-terrorist-financing standards.
FATF grey list: Jurisdictions under increased FATF monitoring for AML deficiencies. Grey-listing drives bank de-risking and elevated EDD globally.
FBAR: US Report of Foreign Bank and Financial Accounts (FinCEN 114). Required for US persons with foreign accounts aggregating over $10,000 at any point in the calendar year.
FCA: UK Financial Conduct Authority. The conduct regulator for financial services, payment institutions and electronic money in the UK.
FIG regime: UK Foreign Income and Gains regime. A four-year relief for new UK residents, replacing the historic non-dom remittance basis from April 2025.
FINMA: Swiss Financial Market Supervisory Authority. The integrated regulator for banking, securities and insurance in Switzerland.
FIRPTA: US Foreign Investment in Real Property Tax Act. Imposes 15% withholding on disposals of US real-property interests by foreign persons.
Forced heirship: Civil-law concept reserving statutory portions of an estate for specific heirs (children, spouse). A primary driver of offshore-trust planning for civil-law-resident clients.
Forfait: Switzerland's lump-sum (expenditure-based) taxation regime for inbound HNW non-Swiss nationals.
Foundation: A purpose-driven legal entity with no shareholders. Common in civil-law jurisdictions including Panama, Liechtenstein, Nevis multiform and Jersey.
Fraudulent transfer: A transfer made to defeat actual or contemplated creditors. The look-back period, solvency test and badges-of-fraud vary by jurisdiction.
FSRA: Financial Services Regulatory Authority of ADGM. Regulates financial services within the Abu Dhabi Global Market free zone.

G

GBC: Global Business Company. The Mauritius international-business vehicle, replacing the previous GBC1 and GBC2 split.
GFSC: Two unrelated regulators share this abbreviation: the Gibraltar Financial Services Commission and the Guernsey Financial Services Commission.
GILTI: US Global Intangible Low-Taxed Income. A current-inclusion regime applied to US shareholders of controlled foreign corporations.
GloBE: Global Anti-Base Erosion rules under OECD Pillar Two. Imposes a 15% minimum effective tax rate on in-scope multinational groups (>€750M revenue).
Golden Visa: Colloquial term for residence-by-investment programmes: most commonly used in respect of Portugal, Greece, Italy and the UAE. Spain closed its golden visa in April 2025.

H

Hague Apostille: The single-step legalisation provided under the 1961 Hague Apostille Convention, replacing consular legalisation between member states.
HKMA: Hong Kong Monetary Authority. The integrated banking and currency regulator for Hong Kong.
Holdco: Holding company. Typically tax-resident in a jurisdiction with a treaty network, a participation exemption and credible economic substance.
Hybrid mismatch: A cross-border tax structure exploiting different jurisdictional characterisations of an entity or instrument. Largely neutralised under BEPS Action 2 and ATAD II.

I

IBC: International Business Company. An older form of offshore company, mostly phased out or rebranded post-BEPS.
ICAV: Irish Collective Asset-management Vehicle. The flagship Irish corporate fund structure, introduced in 2015.
IHT: UK Inheritance Tax. 40% on estates above the nil-rate band, with significant reliefs for spouse, business and agricultural assets.
Independent director: A director with no employment, ownership or family connection to the entity. Required by most fund and substance regimes.
Investment funds: Pooled investment vehicles. Common offshore domiciles include Cayman, BVI, Luxembourg, Ireland, Mauritius and Singapore.

J

JFSC: Jersey Financial Services Commission. Regulates funds, trust, banking and investment business in Jersey.
Joint venture: Contractual or corporate arrangement under which two or more parties pool resources for a specific project, with agreed exit and dispute-resolution mechanics.

K

KYB: Know-Your-Business. The corporate equivalent of KYC, applied to corporate clients and their ultimate beneficial owners at onboarding.
KYC: Know-Your-Customer. The identity, address and source-of-funds verification step that every regulated firm performs at onboarding.
KYT: Know-Your-Transaction. Blockchain-analytics screening of crypto transactions against AML risk factors (mixers, sanctioned wallets, exchanges).

L

Legalisation: The authentication of a public document for use abroad. The Apostille is the simplified Hague Convention version; otherwise consular legalisation is required.
Letter of wishes: A non-binding letter from a settlor to a trustee indicating preferences on distributions. Critical for discretionary-trust governance.
Liquidator: A regulated insolvency professional appointed to wind up a company. Different in scope from a receiver or an administrator.
LLC: Limited Liability Company. Distinct from a UK Ltd in its default tax treatment, typically disregarded or partnership for US purposes unless an election is made.
LOB: Limitation on Benefits. A tax-treaty clause restricting treaty benefits to qualifying residents of the contracting state.
Lombard credit: Borrowing against a portfolio of liquid securities held with a private bank. The principal credit product in private-banking relationships.
Long-term resident: The UK IHT test introduced in 2025: generally, an individual UK-resident for 10 of the prior 20 tax years becomes IHT-chargeable on worldwide assets.
LP: Limited Partnership. A common fund vehicle. Distinguished from a GP (general partner) by liability exposure and management role.

M

MAS: Monetary Authority of Singapore. Singapore's central bank and integrated financial regulator.
Master-feeder fund: A two-tier fund structure pairing a master fund (where investment occurs) with one or more feeder funds (for tax-different investor classes).
MFSA: Malta Financial Services Authority. Active across banking, EMI, VASP, fund and gaming licensing.
MiCA: EU Markets in Crypto Assets regulation. The harmonised framework for crypto-asset service providers across the EU, effective from December 2024.
MLI: OECD Multilateral Instrument. A single treaty modifying thousands of bilateral tax treaties post-BEPS, in force since 2018.
MLRO: Money Laundering Reporting Officer. A mandatory senior compliance role in regulated firms, with personal responsibility for SAR filing.
MM2H: Malaysia My Second Home. A long-term residency programme for foreign nationals, revised significantly in 2024.
MPC: Multi-Party Computation. A cryptographic custody technique splitting transaction-signing authority across multiple parties without ever assembling a private key.
MSB: Money Services Business. The US (FinCEN) and Canadian (FINTRAC) regulatory category for money transmitters and currency exchangers.
MTL: US state-level Money Transmitter Licence. Required state-by-state for any US-facing payment activity.

N

Naturalisation: Acquisition of citizenship through residency rather than investment, typically after five to ten years and a language or integration test.
Nevis trust: An asset-protection trust under the Nevis International Exempt Trust Ordinance, distinguished by its bond requirement and short statute of limitations for creditor claims.
Nil-rate band: The UK IHT threshold (£325,000) below which an estate incurs no IHT. Transferable between spouses.
Nominee director: A director appointed for record purposes who acts on instructions. Post-CRS and BEPS, viable use cases have narrowed sharply; HPT generally avoids them.
Nominee shareholder: A shareholder holding shares on trust for a beneficial owner who is not named on the share register. The beneficial owner is still disclosed to registries and banks under beneficial-ownership reporting rules in most jurisdictions.
Notarisation: Authentication of a signature by a notary public. The lowest tier of cross-border document authentication.

O

Opco: Operating company. The trading entity in a typical holding-and-trading two-tier corporate structure.

P

Participation exemption: A holding-company tax regime exempting dividends and capital gains on qualifying participations. Available in the Netherlands, Luxembourg, Spain, Singapore and Cyprus.
PCC: Protected Cell Company. A statutory ring-fencing structure used principally in insurance and funds.
PEP: Politically Exposed Person. A natural person entrusted with prominent public functions, automatically requiring enhanced due diligence.
Permanent establishment: A fixed place of business or dependent agent creating a taxable presence in a treaty jurisdiction. Defined in Article 5 of the OECD Model.
PI: Professional Indemnity insurance. Cover against advisor errors. Indispensable when choosing an advisor.
Piercing the corporate veil: A legal doctrine permitting courts to disregard corporate separateness in defined circumstances (fraud, sham, alter-ego).
Pillar One: OECD framework reallocating taxing rights for the largest multinationals to market jurisdictions through Amount A. Implementation is ongoing.
Pillar Two: OECD framework imposing a 15% global minimum effective tax rate on in-scope multinational groups with annual revenue over €750M.
PPT: Principal Purpose Test. The anti-treaty-shopping rule under the MLI denying treaty benefits where the principal purpose is to obtain them.
Protector: A person or committee with reserved powers under a trust deed (e.g., to remove trustees). Used to balance settlor intent with trustee discretion.
PSC: UK Person with Significant Control register. The public beneficial-ownership register for UK companies, in force since 2016.
PSP: Payment Services Provider. A regulated entity providing payment processing. Often a step-up from EMI in capital and licence scope.
Purpose trust: A trust without beneficiaries, established for a specified purpose. Common variants: Cayman STAR, BVI BVITLA and Jersey purpose trust.

Q

QIAIF: Qualifying Investor Alternative Investment Fund. Ireland's flagship AIF structure for sophisticated investors, supervised by the Central Bank of Ireland.
QNUPS: Qualifying Non-UK Pension Scheme. An overseas pension scheme satisfying specific UK requirements, relevant to its UK inheritance tax treatment.
QROPS: Qualifying Recognised Overseas Pension Scheme. The UK-recognised overseas-pension transfer route, used by globally-mobile UK pension members.
Quistclose trust: A resulting trust arising when funds are transferred for a specific purpose. Named after the 1970 Quistclose case.

R

RAIF: Reserved Alternative Investment Fund. Luxembourg's flagship light-touch fund vehicle for sophisticated investors, supervised at the AIFM level rather than the fund.
RAK ICC: Ras Al Khaimah International Corporate Centre. The UAE offshore-corporate registry, distinct from RAK Free Zone (onshore).
RBI: Residence by investment. Permit or residence granted in exchange for qualifying investment, donation or job creation.
Receiver: A court-appointed officer managing assets pending resolution of a dispute. Different in role from a liquidator or administrator.
Re-domiciliation: Statutory transfer of a company's jurisdiction of incorporation, preserving its legal personality and existing contracts.
Remittance basis: A former UK tax basis, abolished from 6 April 2025 and replaced by the four-year FIG regime, under which non-doms were taxed on UK income and gains plus foreign income remitted to the UK.
Reserved-power trust: A trust under which the settlor retains specified powers (e.g., investment direction) without invalidating the trust. Recognised by statute in BVI, Cayman and Jersey.
Resulting trust: A trust arising by operation of law when legal title transfers without an intention to transfer the beneficial interest.

S

SAR: Suspicious Activity Report. A regulated firm's mandatory filing on suspected money-laundering activity. International equivalent: STR (Suspicious Transaction Report).
SDLT: UK Stamp Duty Land Tax. Up to 19% on residential property purchases by non-resident corporate buyers: the 17% company rate plus the 2% non-resident surcharge (subject to reliefs).
Section 877A: The US exit-tax regime applied to covered expatriates renouncing citizenship: a deemed mark-to-market on worldwide assets.
Self-settled trust: A trust where the settlor is also a beneficiary. Creditor-protection enforceability varies sharply by jurisdiction, with Cook Islands and Nevis being the leading offshore venues.
Settlor: The person who establishes a trust by transferring assets to a trustee on the terms of a trust deed.
SFC: Securities and Futures Commission of Hong Kong. The securities, fund-management and licensing regulator.
Sham doctrine: Common-law principle treating a trust as invalid where the settlor retains de facto ownership and the trust is a façade.
SIBA: Securities and Investment Business Act (BVI). The framework governing BVI funds, investment advisers and brokers.
SOPARFI: Société de Participations Financières. The Luxembourg holding-company regime benefiting from the participation exemption and a deep treaty network.
Source of funds: Documentation evidencing the origin of capital for a specific transaction. Distinct from source of wealth.
Source of wealth: Documentation evidencing the historical accumulation of an individual's overall wealth. The harder document to assemble, and the one that gets rejected most often.
SPC: Segregated Portfolio Company. The Cayman statutory ring-fencing structure used principally in insurance and funds.
Split-year treatment: UK SRT relief allowing a tax year to be split between resident and non-resident periods on qualifying departure or arrival, against specified case codes.
SPV: Special Purpose Vehicle. An entity created for a specific transaction, asset or risk-segregation purpose.
SRT: UK Statutory Residence Test. Codified in Schedule 45 of the Finance Act 2013. Determines UK tax residence for individuals.
STAR: Cayman Special Trusts (Alternative Regime) Act. Provides the statutory framework for Cayman non-charitable purpose trusts.
Subpart F: The US current-inclusion regime applied to passive and base-company income of controlled foreign corporations. Predates GILTI but still applies in parallel.
Substance: Real economic activity in a jurisdiction (directors on-ground, office, employees, decisions made there). Paper substance has been failing audits since 2023.
Sufficient ties test: Component of the UK SRT counting connecting factors (family, work, accommodation, the 90-day tie and the country tie) to determine residence.

T

TCSP: Trust or Company Service Provider. A regulated category in HK, BVI, UK and others. HPT works with licensed TCSPs in each jurisdiction; we are not licensed as a TCSP ourselves.
Temporary non-resident: UK SRT rule re-assessing year-of-departure CGT charges where an individual returns to UK residence within five tax years.
TNMM: Transactional Net Margin Method. A transfer-pricing method comparing the net margin earned on a controlled transaction to comparable uncontrolled transactions.
Transfer pricing: The pricing of cross-border intercompany transactions. Governed by the OECD arm's length principle and the BEPS Actions 8–10 guidance.
Travel Rule: FATF Recommendation 16 requiring VASPs to share originator and beneficiary information on crypto transfers above defined thresholds.
TRS: UK Trust Registration Service. The mandatory registry for express trusts with UK touch points.
Trust deed: The constitutive instrument establishing a trust, setting out trustee powers, beneficiary class, distribution rules and dispute mechanics.
Trustee: The legal owner of trust assets, holding them on the terms of the trust deed for the benefit of the beneficiaries.

U

UBO: Ultimate Beneficial Owner. The natural person who ultimately owns or controls an entity. Reportable under the BO-register frameworks in most jurisdictions.
UCITS: Undertakings for Collective Investment in Transferable Securities. The EU's harmonised retail-fund regime, distributable across member states.

V

VARA: Virtual Assets Regulatory Authority. Dubai's dedicated virtual-asset regulator, established in 2022: the world's first city-level dedicated crypto regulator.
VASP: Virtual Asset Service Provider. A regulated entity for crypto custody, exchange or transfer services. Outside the EU; inside the EU the equivalent term is CASP.
VCC: Variable Capital Company. Singapore's fund vehicle introduced in 2020, competing with Cayman, BVI and Luxembourg for Asia-Pacific fund domicile.
VISTA: BVI Virgin Islands Special Trusts Act. Allows trusts holding BVI-company shares to disapply the prudent-investor rule, supporting family-business and holding-company use cases.
Voluntary liquidation: A solvent winding-up of a company instigated by shareholder resolution, distinct from compulsory or insolvent liquidation.

W

Wegzugsteuer: Germany's exit tax on departure for substantial-shareholders, calibrated on a deemed-disposal of qualifying participations.
Wet ink: A handwritten ink signature, distinct from electronic signatures. Still required by certain consular and banking processes.
Wholly-owned subsidiary: A subsidiary where 100% of the equity is held by a single parent entity, often used to ring-fence specific risks or business lines.

Y

Yacht registration: Flag-state registration of a yacht, separating legal ownership from operational and crew matters. Common flag states: Cayman, Isle of Man, Malta, Marshall Islands and the Red Ensign.

Z

Zero-tax jurisdiction: A jurisdiction with no headline personal or corporate income tax. Producing a zero-tax outcome usually requires more than residency alone: substance, source rules and home-country exit must all align.

Next step

Tell us about your matter.

A short application tells us what you need. We aim to reply within 48 hours. If we are not the right firm, we will say so.

Apply Apply to book a consultation

Or call +852 5161 5505 (Hong Kong) or +44 7429 137367 (London)