Using Escrow Services For International Transactions
What is Escrow and Why Do You Need It?
Every businessman and broker should require escrow services for facilitating transactions and reducing risk, and most importantly to combat scammers. As a senior lawyer practicing for more than 20 years, and with substantial experience in international commodity trading and financial transactions, I will be able to design the best escrow agreement to make sure your funds will be fully protected during the entire escrow period.
Hong Kong has a well-established common law system based on English law, where the rule of law is upheld by an independent judiciary. My law firm is now providing efficient and professional escrow services to clients with a variety of different business needs. Escrow is a legal arrangement whereby an asset (usually funds) is delivered to a trusted third party (the “Escrow Agent”) to be held pending a contingency or the fulfillment of a condition as predefined in the relevant escrow agreement. Upon that event occurring, the Escrow Agent will deliver the funds to the proper recipients.
Escrow services can be used in a variety of transactions. A typical example is paying an upfront fee for issuance of Banker’s Guarantee / Standby Letter of Credit (BG/SBLC). I have often heard that many people were cheated by paying upfront fees for issuance of BG/SBLC., Upfront fees were paid, but BG/SBLC was not delivered at the end. Had they engaged my law firm’s escrow services, they would have been protected by the well-drafted escrow agreements and would not have lost their upfront fees.
Escrow Agent Fee
For Hong Kong escrow agent fee, it would be in the range of 0.75% - 1.5% of the amount in escrow, depending on the size of the business deal and its complexity. You may be able to find an escrow agent who offers a lower fee. However, please bear in mind that hiring a cheap one may look appealing now, but it will become much more expensive if anything goes wrong.
Once a client decides to engage my law firm to provide escrow services, an escrow account will be set up and an escrow agreement will be prepared as soon as possible, and it will be tailor-made to ensure that your funds will be fully protected up to closing.