Well I'll mention the upside first. At face value QROPS offer huge benefits particularly in terms of the flexibility that you posess as a pension holder. In particular, you can avoid a compulsory annuity purchase; you can retain the pension fund value until death and pass that on. These are major benefits, but do discuss your specific circumstances with a registered advisor.
On the subject of risks and downsides, really there are none specific to QROPS that are not present in any other Pension scheme. As qualfiying and recognised schemes, they must follow UK pension rules for a reasonable period of time which is normally about 5 years of somebody being non resident from the UK.
There are potentially charges associates with the transfer itself that you should think about carefully and discuss with your advisor. These might be as little as 0%; they can be as high as several percentage points depending on the type of scheme and type of investment that the individual pension holder wants to do. Sometimes you will get transfer penalties as well from your existing provider.
The trade off between charges and penalties on the one hand, and potential benefits on the other is the bit you really need your advisor to go through with you in detail. If the numbers don't stack up, then perhaps QROPS are not right for you at the moment.
Potentially, you could argue that the government might "move the goal posts" in a few years if they realise that these schemes offer too many tax advantages. To a limited extent, this is already happending, as aggressive financial services companies tend to stretch the boundaries of the spirit of the legislation, whilst not breaching the letter of the law.
I’ve already seen, for example, that a QROPS scheme in Singapore had its authorisation status removed by Her Majesty’s Revenue and Customs, so they authorities are keeping a close eye on what’s actually going on and if they see anything they don’t like, or they feel there’s abuse of the actual system, HMRC will readily stop further transfers of pension arrangements to a scheme or even a whole jurisdiction.
But with places that are closer to home - the Channel Islands, the Isle of Man - there are very good relationships between the legislative bodies, and the Financial Services Commissions, which keeps everything in check. HMRC is keeping a close eye on QROPS and any abuse but if they are operated within the framework of the rules that are actually there, there should be no sort of major changes in the long-term. Again, one to talk to your advisor about.
If a QROPS schemes has been closed to new transfers, then HMRC have been very good to prior transferees, and have said that people who are already in those schemes can carry on benefiting. But if a fund member has taken money out of a pension which perhaps they wouldn’t have been entitled to under the UK scheme, the Revenue does have the ultimate facility to impose sanction and tax charges and those will be a liability which would fall on the individual which really they would have to pay or the pension scheme would have to pay in the very near future.