We chat to a Hong Kong-based lawyer specialising in areas such as family law. As founders of firms seek financial backing, their investors often look more favourably on entrepreneurs who have prenups and other structures to shield assets if a relationship fails.

The tool of a prenuptual agreement may sound clinical and
calculating to some ears, but in fact it can have a positive
effect by underscoring the seriousness of a long-term
relationship, a senior Hong Kong lawyer argues. 

Just as important, businessmen and women who are seeking
financial backers must assure investors that marriage break-ups
will not put the capital of others at risk. The end of a
marriage, particularly an acrimonious one, doesn’t just affect
the parties and children, Alfred Ip, founding partner at Hugill &
Ip, said. 

Some of the bigshots of Silicon Valley understand the argument,
for example. Google co-founder Sergey Brin and Anne
Wojcicki, who helped found personal genomics company 23andMe, had
a prenup when they married in 2007. They split in 2015 and Brin’s
stake in Google wasn’t affected (source: Bloomberg,
October 2019). Another case was that of Oracle’s Larry Ellison,
who has been through several marriages but none of his divorces
affected his stake in the Californian firm.

More people in Hong Kong are becoming aware of the use of
prenups. People are learning more about it, and choosing either
to use them or they seem to forget all about it, Ip told this
news service in a call. 

“I don’t see it [prenup] like a precaution in the event of an
unfortunate marriage. Instead, it is expectation management that
a reasonable adult would do. We cannot choose our parents or
siblings, but a spouse is someone you choose and before forming a
committed relationship, it is responsible to lay out some of the
expectations and planning so that each partner should know what
they are getting into,” he continued. 

“You are setting expectations from the beginning. People will
know the consequences and not have regrets,” Ip said.  

Ip spoke to this news service as it examined a series of topics
under the umbrella of “protecting the client,” covering
topics such as family law, reputation protection, cybersecurity
and physical safety. In that context, instruments such as divorce
law are tools in a box.

For some time, London has been seen as the “divorce capital of
Europe,” attracting legal business from HNW individuals.
This has been the case, for example, with people from Russia, as
well as persons from the Middle East, etc. 

As for Hong Kong, while there have been changes to its
jurisdictional autonomy, its common law heritage is still
significant.

“Most people will choose Hong Kong [as a divorce location]
because they are already holding assets in Hong Kong. Often, it
will be a company holding assets in Hong Kong, such as a
Cayman Island company that is listed in Hong Kong that might have
underlying assets in China, etc…they are a very common
structure,” Ip said.  

This creates a lot of activity on the Hong Kong Stock Exchange,
with lots of listings, he continued.