HONG KONG RIGHT PLACE RIGHT TIME RIGHT NOW European Investment in - - PowerPoint PPT Presentation

HONG KONG

RIGHT PLACE RIGHT TIME RIGHT NOW

European Investment in China via Hong Kong

Charles Ng Associate Director-General of Investment Promotion

22 May 2012

Agenda

• Changing Trends in the type of companies setting up

in Hong Kong

• Opportunities for Companies across various sectors

and functions

• Key benefits of investing in China via Hong Kong

Agenda

• Changing Trends in the type of companies setting up

in Hong Kong

• Opportunities for Companies across Sectors and

functions

• Key benefits of investing in China via Hong Kong

(2011 Annual Survey, Hong Kong SAR Government's Census & Statistics Department)

Foreign Direct Investment

3,752 overseas/Mainland companies with

regional headquarters and offices

Rank FDI Inflows

USD bn FDI Outflows USD bn

1 USA 228.2 USA 328.9 2 China 105.7 Germany 104.9 3 Hong Kong 68.9 France 84.1 4 Belgium 61.7 Hong Kong 76.1 5 Brazil 48.4 China 68.0 6 Germany 46.1 Switzerland 58.2 7 UK 45.9 Japan 56.2 8 Russia 41.2 Russia 51.7 9 Singapore 38.6 Canada 38.6 10 France 33.9 Belgium 37.7

From MACRO…

• Global operations office
• Construction and mining equipment
• Energy management
• Global sourcing office
• US$300 million data centre

… to Micro

• First flagship store in Hong Kong
• Product design and international sales
• Start-up entrepreneur
• Wine production
• Vintage & contemporary textile design

Agenda

• Changing Trends in the type of companies setting up

in Hong Kong

• Opportunities for Companies across Sectors and

functions

• Key benefits of investing in China via Hong Kong

Opportunities for companies across various sectors & different functions

• GHQ/ RHQ
• Treasury
• R&D

Financial Service

• Sales/ Marketing/ Business Development
• Relationship management
• Data Centre

Opportunities Health Service Innovation and Technology ICT Tourism and Hospitality Transport and Industrial Education Retail Professional service

Agenda

• Changing Trends in the type of companies setting up

in Hong Kong

• Opportunities for Companies across Sectors and

functions

• Key benefits of investing in China via Hong Kong

16.5 17 25

15 20 45 5 14.5 49 5 20 23 17 7

Hong Kong Singapore China

Corporate Income Personal Income Employer Social Security Employee Social Security VAT

Source: Forbes Tax Misery Index 2009, Inland Revenue

Low and Simple Tax System

NO

• VAT/GST/Sales tax
• Capital Gains Tax
• Withholding tax on investments
• Estate duty
• Global taxation
• Wine duty

Confirmed Double Taxation Relief Agreements with 24 trading partners:

Double Taxation Agreements

In negotiations:

• Bangladesh
• Canada
• Finland
• Guernsey
• India
• Italy
• Korea
• Macau
• Malaysia
• Mexico
• Saudi Arabia
• the United Arab

Emirates

• Austria
• Belgium
• Brunei
• Czech Republic
• France
• Hungary
• Indonesia
• Ireland
• Netherlands
• New Zealand
• Portugal
• Spain
• Switzerland
• Thailand
• UK
• Vietnam
• Japan
• Jersey
• Kuwait
• Liechtenstein
• Luxembourg
• Mainland of China
• Malaysia
• Malta

As of 30 April 2012 *Not yet entered into force

Close ser Ec Econom

• mic

c Partners ership hip Ar Arrangem ngemen ent

Uniq ique e CEPA adv dvantage ges:

• Mainland China’s first bilateral free trade

ag agree eemen ent

• Easie

ier Chin ina acces ess s for HK-made de pr produ ducts ts and d HK HK-base ased d ser ervic ice e compa pani nies es

• Avail

ilabl ble e to pe peopl ple e and b d busin ines esses es reg egis ister ered ed in in H Hong g Ko Kong of g of all natio ionalit itie ies

CEPA – The Free Trade Pact

Trade in Goods Trade in Services CEPA applies to:

• Over 1,500 categories of

products (Click here for details)

• Exported direct from Hong

Kong to the Mainland

• 46 service sectors

(Click here for details)

Benefits:

• Removes all export duties
• Greater market access:

Eligibility:

• “Made in Hong Kong”

products, under specified ‘Rules of Origin’

• Companies must have

“substantive operations” in HK Applications approved (as at 30

April 2012) :

• Trade Certificates of Goods

81,826

• Service Supplier Certificates

1,596

China National 12th Five Year Plan

• with a Dedicated Chapter on HK SAR
• Three key points:

– consolidating and enhancing Hong Kong's competitive advantages as an international financial, trade and shipping centre with support for Hong Kong's development into an

• ffshore renminbi (RMB) business centre and an

international asset management centre – supporting Hong Kong in nurturing emerging industries and developing the six industries where Hong Kong enjoys clear advantages – deepening the economic co-operation between the Mainland and Hong Kong; continuing the implementation of the Closer Economic Partnership Arrangement (CEPA)

China National 12th Five Year Plan

• Mainland – Hong Kong Financial Cooperation
• RMB Qualified Foreign Institutional Investors (RQFIIs)

allowed to invest in Mainland’s securities markets; initial size is RMB20 billion

• Pilot projects for foreign banks to replenish capital with

RMB

• Hong Kong enterprises will be allowed to make direct

investment in the Mainland in RMB

• Cross-border trade settlement in RMB extended to the

whole country

Announced by Vice Premier Li Keqiang on 17 August 2011:

Offshore Renminbi banking in Hong Kong

• First launched in 2004
• Currently over 130 authorised institutions offering Renminbi (RMB)

services

RMB Trade Settlement Handled By Banks in Hong Kong 2009: RMB 1.9 billion 2010: RMB 369.2 billion 2011: : RMB 1.9 trillion lion RMB Deposit in Hong Kong Up to March 2012 – RMB 554.3 billion Bond Issues and Combined Value Up to April 2012 – 156 RMB bonds issued Combined ined values s at RMB 218.4 billion

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