The Rise of Business Trusts in Sustainable Neo-Innovative Economies

Business trusts have been commonly used in the United States as an organizational form for over 100 years. Historically, entrepreneurs used business trusts to escape regulatory and tax requirements imposed on corporations. Today, in the United States, business trusts are narrowly used in specialized niches, such as structured finance transactions and the setting up of mutual funds, while corporations have ascended as the dominant organizational form for operating a business. By contrast, business trusts have enjoyed a resurgence in neo-innovative economies such as Singapore. An understanding of the growing utilization of business trusts as an organizational form abroad could prove enlightening for future American economic ventures, especially foreign investment. For instance, why are business trusts gaining popularity in Singapore and other Asian markets? And, why have business trusts generally been overlooked in the United States outside of mutual funds and employee pension funds? This Article seeks to address these questions by discussing and comparing business trusts in the United States with those being used in Singapore. Beyond providing mere descriptive accounts of business trusts in these two countries, this Article will consider the transportability of key concepts of Singapore business trusts to American business trust law and usage. In addition, this Article will be mindful that American institutional and cultural business contexts (for example, historical use and the emerging sustainability movement), as well as American trust jurisprudence, may limit the applicability of these key concepts in the United States.