Author: Lawyer Zhang Jingxinyue | PRC Practising Lawyer | Singapore Registered Foreign Lawyer
According to statistics, approximately 60 million overseas Chinese live in 198 countries and regions. Apart from the four regions on both sides of the Taiwan Strait, overseas Chinese are particularly numerous in Southeast Asia and North America. As outbound investment becomes more diverse, more high-net-worth individuals obtain foreign status and demand for overseas asset allocation and cross-border wealth succession continues to grow. How should property located around the world be handled after its owner's death? Which country's law applies? How can relatives in China inherit it?
The Singapore lawyer team of Zhongxin Legal News recently accepted instructions from a Chinese family to handle an estate in Singapore. This article introduces the general steps and documents that Chinese nationals may need when inheriting an overseas estate.
01 What Forms Can Inheritance Take?
An estate means the lawful personal property left by a person at death. Inheritance is the legal system under which property left by a deceased person is transferred to another person. The deceased is the decedent, and the person legally accepting the estate is the heir.
Common forms of succession include inheritance under a will, a legacy, a legacy-support agreement and intestate succession. Under bilateral consular treaties or agreements and China's domestic laws and regulations, the decedent may be a Chinese national or a foreign national, including an overseas Chinese person. Chinese heirs may live overseas or in mainland China.
In many countries, property left after death is frozen by the court under succession law. No one may deal with it before the inheritance formalities are completed. There are generally two situations. If the decedent left a will naming the heirs, the named heirs may apply to the court under the will and complete the legal formalities to obtain the estate. In a strict sense, a will is one made at a law firm and filed with the court, not merely a letter written by the deceased. If there is no will, relatives must apply to the court, which confirms the applicant's inheritance rights under the law before releasing the estate.
Foreign succession laws commonly rank heirs in approximately five levels: (1) spouse; (2) children; (3) parents; (4) siblings and grandparents; and (5) other collateral relatives, such as uncles, aunts and nieces or nephews. An inheritance application must proceed in this order and cannot skip a level. If an heir has died, a death certificate is required. A lawful heir who renounces the inheritance must sign a declaration of renunciation.
02 Which Country's Law Applies to an Overseas Estate?
Article 31 of China's Law on the Application of Laws for Foreign-Related Civil Relations provides that intestate succession is governed by the law of the decedent's habitual residence at death, while intestate succession to immovable property is governed by the law of the place where the property is located.
Article 32 provides that a will is valid as to form if it complies with the law of the testator's habitual residence or nationality at the time of making the will or death, or the law of the place where the will was made.
If the decedent lived overseas and all assets are overseas, the law of the foreign country generally applies to both movable and immovable property.
If the decedent lived in China but the assets are overseas, Chinese law applies to movable property and the law of the place where immovable property is located applies to that property.
If the decedent lived overseas but owned immovable property in China, foreign law applies to movable property and Chinese law applies to the immovable property.
The applicable law for a Chinese person inheriting overseas assets may differ depending on the decedent's habitual residence, nationality, the location of immovable property or the place where the will was made, leading to different outcomes.
03 Defining the Status of Overseas Chinese, Returned Overseas Chinese and Relatives of Overseas Chinese
The persons involved in an overseas inheritance may include overseas Chinese, returned overseas Chinese, relatives of overseas Chinese and Chinese relatives of other persons who have gone abroad.
(1) Overseas Chinese
Under article 2(1) of the Law of the PRC on the Protection of the Rights and Interests of Returned Overseas Chinese and the Relatives of Overseas Chinese, an overseas Chinese person is a Chinese citizen who has settled abroad. The relevant provisions further define “settled” as follows:
- the Chinese citizen has obtained long-term or permanent residence in the country of residence and has lived there continuously for two years, with an aggregate stay of at least 18 months during those two years;
- even without long-term or permanent residence, the citizen has obtained lawful residence for at least five consecutive years and has lived there for an aggregate of at least 30 months during those five years; and
- a Chinese citizen studying abroad, whether under a government or private programme, or working abroad on official business, including an assigned labour worker, is not treated as an overseas Chinese person during that period.
(2) Returned Overseas Chinese
The Protection Law defines a returned overseas Chinese person as an overseas Chinese person who has returned to settle in China. This means abandoning long-term, permanent or lawful residence in the former country and completing the procedures for household registration in China. A foreign national of Chinese descent who is approved to restore or acquire Chinese nationality and completes the procedures to settle in China is also treated as a returned overseas Chinese person.
(3) Relatives of Overseas Chinese
Relatives of overseas Chinese include the spouse, parents, children and their spouses, siblings, grandparents, maternal grandparents, grandchildren and other relatives who have a long-term support relationship with an overseas or returned overseas Chinese person.
A foreign national of Chinese descent means a former Chinese citizen who has acquired foreign nationality, the foreign descendants of such a person, or foreign descendants of Chinese citizens. Chinese-nationality relatives of a foreign national of Chinese descent in China are treated as relatives of overseas Chinese in the same scope.
(4) Chinese Relatives of Other Persons Who Have Gone Abroad
Apart from overseas Chinese, returned overseas Chinese and their relatives, this category covers Chinese family members of Chinese citizens who have gone abroad for study, business, work, tourism, visiting relatives or official business. Under China's succession law, family members include the spouse, children, parents, siblings, grandparents and maternal grandparents of the person who went abroad.
04 What Are the General Steps for a Chinese National to Inherit an Overseas Estate?
A Chinese national inheriting the estate of a foreign national, including a foreign national of Chinese descent, outside China will generally proceed as follows.
1. Obtain identity and relationship certificates
The applicant should first take an identity card, household registration book, the decedent's death notice and other documents to a notarial office at or above city level at the applicant's place of residence and obtain a certificate of family relationship, inheritance-right certificate and other identity documents.
2. Complete travel formalities or prepare a power of attorney and appoint an agent
With the notarised certificates and the decedent's death notice, the applicant may apply to the exit-entry authority for a passport or other documents to travel to the country of the decedent's nationality or the country where the estate is located. The applicant may instruct relatives, friends or lawyers to act abroad, but must issue a power of attorney. The applicant may also appoint a lawyer or relative in the decedent's country of nationality or the country where the estate is located. The power of attorney must be notarised.
3. Investigate the estate and apply separately for movable and immovable property
Before applying, the applicant or agent should determine what assets exist, where they are located, and which are movable or immovable. Assistance may be requested from the Chinese embassy or consulate, or enquiries may be made through a local lawyer or institution.
4. Deal with estate tax and appoint an estate administrator
If the country where the estate is located imposes estate tax, it is generally paid first. Singapore and China currently do not impose estate tax. The applicant applies to the court at the location of the estate. After review and confirmation, the court issues a grant of probate or letters of administration (called a Grant of Letters of Administration in Singapore). The heir or appointed estate administrator may then collect and deal with the estate under the grant.
Only after all of the decedent's debts have been paid does the remaining property pass to the heirs.
05 What Basic Evidence Is Usually Required?
(1) Intestate heir
In a foreign-related inheritance, the applicant will generally need to obtain an inheritance-right certificate from a Chinese notarial authority. A Chinese person claiming as an intestate heir will usually need:
（1）identity documents, including the identity card, household registration book and original passport, if available. If the domestic household registration has been cancelled, a certificate of the household-registration record issued by the former local police station should be provided;
（2）documents proving ownership of the estate. If the heir can identify the estate, its type, amount and location may be stated in the inheritance-right certificate. If the exact location is unknown, the certificate may state “the estate left at [place]” or “any estate left anywhere”, subject to the notarial office's requirements;
（3）the decedent's death certificate. If the death occurred in China, provide the death certificate issued by the hospital or public-security authority and the household-cancellation certificate. If the death occurred abroad, provide a death certificate issued by the relevant local authority. If the decedent disappeared, provide the court judgment declaring death;
（4）evidence of the decedent's marital status, parents and children, and evidence of family relationships. A family-relationship certificate may be issued by the personnel or labour department of the applicant's employer or, if the applicant has no employer, by the local subdistrict office, township government or town government;
（5）a declaration of renunciation if an heir has renounced the inheritance;
（6）if a statutory heir has died, that heir's death certificate and relationship evidence. For representation inheritance, attach the deceased heir's death certificate and evidence of the representative heir's relationship. If there are no other heirs in the same order, the certificate should state that the deceased heir was the decedent's only son or daughter and the only lawful heir;
（7）if there is no will, a certificate confirming that no will exists, or an explanation that relatives searched the deceased's belongings but found no will; and
（8）any other evidence the notary considers necessary.
Foreign documents among the above materials must be notarised by the local notarial authority and authenticated by the Chinese embassy or consulate.
(2) Heir under a will
A Chinese person claiming as a testamentary heir should provide:
（1）the documents listed in items (1) to (6) above;
（2）the decedent's will;
（3）if the will was made outside China, authentication by the relevant Chinese embassy or consulate;
（4）the estate executor's identity card, passport and copies, where an executor has been appointed; and
（5）any other evidence the notary considers necessary.
06 What Assistance Can Chinese Consular Officials Provide?
Under the Vienna Convention on Consular Relations, bilateral consular treaties and agreements, and China's domestic laws and regulations, a Chinese national handling an overseas estate may seek assistance from a Chinese embassy or consulate.
An overseas inheritance necessarily involves the substantive and procedural law of a foreign country. Article 5(7) of the Vienna Convention provides that consular functions include protecting the interests of nationals of the sending state, including individuals and legal persons, in succession matters in the receiving state in accordance with the receiving state's laws and regulations.
According to publicly available information, by September 2014 nearly 180 states, including China, were parties to the Vienna Convention. Almost all of the 49 bilateral consular treaties and agreements between China and other countries also contain provisions on consular functions in inheritance matters. Chinese consular officials may therefore protect the interests of Chinese nationals, including individuals and legal persons, in succession matters in the receiving state in accordance with local law.
Under the Guide to Consular Protection and Assistance, Chinese consular officials may provide:
（一）information that they have learned about the deceased as soon as possible;
（二）consular authentication of a death certificate for a relative where the document has already been notarised and authenticated by the competent authority in the country of residence;
（三）general legal information;
（四）assistance in engaging a local lawyer; and
（五）if the applicant wishes to travel personally to the location of the estate, assistance in urging the relevant country to process the visa more quickly.
In practice, an heir should apply in advance to a Chinese notarial institution handling foreign-related matters for notarisation of a birth certificate, family-relationship certificate, marriage-status certificate, adoption certificate or power of attorney, as needed. The documents should then be authenticated through China's Ministry of Foreign Affairs or the foreign-affairs office of the relevant provincial, autonomous-region or municipality government and, as soon as possible, by the embassy or consulate of the relevant country in China.
If difficulties arise while inheriting an overseas estate and the heir needs consular protection or assistance, the heir may contact the relevant Chinese embassy or consulate directly or call China's 24-hour global consular protection and services hotline, “12308”.
07 When Can a Local Bank of China Branch Be Instructed?
Under the Introduction to the Bank's Collection of Private Overseas Assets, a Chinese national living in China who cannot or is unable to travel to the country where the assets are located may instruct a local Bank of China branch to handle the inheritance. The procedure is generally as follows.
First, the heir obtains and completes the application for collection of an estate and the case-information form and submits them to the entrusted bank together with the death certificate and estate documents, such as a title deed, share certificate, deposit certificate or safe-deposit-box key. If the estate is held by an estate administration office or public trustee, those institutions' documents may also serve as proof of the estate.
Second, after reviewing the documents, the bank directs the client to a local notarial office to obtain the necessary notarised documents, such as the inheritance-right certificate, notarised power of attorney, death certificate of a lawful heir, renunciation declaration, birth certificate and marriage certificate. The exact requirements depend on the country where the documents will be used. After notarisation, the documents must be translated into the local language and authenticated by the embassy or consulate of the country where the assets are located in China before they have effect abroad. Estate documents should, in principle, be originals. To reduce repeated postal deliveries, copies may be provided at the initial stage, but the originals must be delivered to the designated agent when applying overseas.
Third, the regions in which the bank currently accepts estate-collection instructions are limited. Because the work is handled through Chinese banks in Hong Kong and Macao and the Bank of China Singapore branch, and because foreign-exchange controls differ between countries, the bank may currently collect estates in Canada, Singapore, Malaysia, Australia, New Zealand, Japan, the United States, Hong Kong and Macao.
Fourth, the overseas and Hong Kong or Macao institutions include:
- Nanyang Commercial Bank Trust Company Limited and Xinhua Bank Trust Company Limited in Hong Kong handle collection matters for estates in Hong Kong, Canada, the United States, Malaysia, Australia and New Zealand.
- Nantong Bank in Macao handles estates in Macao.
- The Bank of China Singapore Branch handles estates in Singapore.
- The Tokyo Chinese Overseas Association handles estate matters in Japan.
In summary, a Chinese national may, depending on the case, instruct overseas relatives, other heirs, the Bank of China, an overseas Chinese association, a foreign lawyer or a Chinese diplomatic or consular mission to claim an overseas estate. The inheritance of an overseas estate must follow international practice and the laws of the country or region where the assets are located. Each jurisdiction has its own civil and succession laws governing estate administration, disposition, the order of heirs, limitation periods and required procedures. This article describes only the general process. The detailed requirements should be confirmed with local lawyers and relevant institutions under the law of the country where the estate is located.
～END～
—
This article is for information purposes only and does not constitute formal legal advice.
This article is general information and not legal advice. Specific matters require assessment by appropriately qualified professionals.