Hong Kong 26 August 2020 | Confidential Speakers Daniel Tang - - PowerPoint PPT Presentation

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Hong Kong 26 August 2020 | Confidential Speakers Daniel Tang - - PowerPoint PPT Presentation

A new fund vehicle for private equity in Hong Kong 26 August 2020 | Confidential Speakers Daniel Tang Daniel Yong Junko Shiokawa Partner | Hong Kong Partner | Singapore Partner | Hong Kong +852 3711 1668 +65 6238 3910 +852 3711 1628


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A new fund vehicle for private equity in Hong Kong

26 August 2020 | Confidential

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Junko Shiokawa

Partner | Hong Kong

+852 3711 1628 Junko.Shiokawa@withersworldwide.com

Daniel Yong

Partner | Singapore

+65 6238 3910 Daniel.Yong@witherskhattarwong.com

Daniel Tang

Partner | Hong Kong

+852 3711 1668 Daniel.Tang@withersworldwide.com

Speakers

Withersworldwide | A new fund vehicle for private equity in Hong Kong 2

Disclaimer

The information contained in this presentation does not constitute legal advice. Users of this presentation should take appropriate legal advice based on their individual circumstances. Withers accepts no responsibility or liability for any loss which may result from reliance on any of the information, opinions or Material contained in or accessed through this presentation. While Withers uses commercially reasonable efforts to post information on this presentation that is correct, Withers does not warrant the accuracy or completeness of the material on this presentation. Withers may make changes to the material on this presentation at any time without notice. The material on this presentation may contain certain omissions, errors or may be out of date, and Withers makes no commitment to update such material. The material on this presentation is provided on an “as is” basis without any representation, warranty, term or condition of any kind (whether express or implied by law). To the maximum extent permitted by law, withers excludes all representations, warranties, conditions and terms (including, without limitation, and implied terms or conditions of satisfactory quality, fitness for purpose or reasonable care and skill) which but for this legal notice might have effect in relation to this presentation. Representatives in this presentation do not practise laws of the Cayman Islands. Withers works with a range of leading Cayman Islands qualified lawyers and law firms and has extensive experience working on cross border legal and tax matters involving Cayman Islands entities. The Cayman Islands is a British overseas territory and the laws are based largely on the laws of the United Kingdom.

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Limited Partnership Fund

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 4

  • General Partner
  • no residency or registration requirement
  • individual, local or foreign company/partnership
  • appoint “authorized representative” if not a legal

person

  • Limited Partner(s)
  • individual or legal entity
  • statutory safe-harbour provisions

Flexible framework

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 5

  • Limited Partnership Agreement
  • free to contract for operation of fund
  • minimal statutory requirements
  • equivalent to a company’s articles of association
  • varying GP’s fiduciary duties
  • Investment Manager
  • individual or local/foreign company
  • responsible for day-to-day investment management

functions

Flexible framework

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 6

  • GP to apply via HK law firm or solicitor
  • Registration form and supporting

documents

  • HK address
  • No disclosure of LPA or LP information
  • Registration certificate available in 4

working days

  • Nominal registration fees

Simple Registration

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 7

  • Annual audit by independent auditor
  • Annual return and filings
  • change in the fund’s investment scope or principal

place of business

  • change of GP/IM, AML officer or their registered

particulars

  • AML officer
  • authorized institution/licensed corporation
  • accounting or legal professional

Ongoing compliance

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 8

  • GP/IM's fund raising activities
  • private placement and other safe harbors
  • IM
  • type 9 regulated activity (asset management) for real

estate or “securities”/futures contracts management

  • incidental exemption for types 1 (dealing in

securities), 2 (dealing in futures contracts), 4 (advising on securities) and/or 5 (advising on futures contracts)

Licensing

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 9

  • No withholding tax for profits repatriation
  • Increasing network of comprehensive

DTAs

  • 43 DTAs
  • covering Mainland China, Japan, Belgium, Canada,

France, India, Ireland, Italy, Korea, Luxemburg, Macao, Malaysia, UK Vietnam, etc.

Minimal Tax Exposure

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 10

  • Unified tax exemptions for funds
  • effective from 1 April 2019
  • “Qualified Transactions” & “Qualified Investment

Fund”

  • investment in private companies exemption
  • Carried interest concessions
  • concession rate will be highly competitive
  • effective as of 1 April 2020
  • validated by HKMA
  • substantial operations and expenditure in HK
  • focus on PE investment

Minimal Tax Exposure

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Withersworldwide | A new fund vehicle for private equity in Hong Kong 11

  • Hong Kong: up and coming
  • Singapore: 10 years of experience
  • Cayman: leading choice for 20+ years

Hong Kong, Singapore and Cayman:

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Hypothetical case

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GP LP 1

Investment Manager Hong Kong / Singapore/ Cayman Other jurisdictions SPV

LP 2 LP 3 LP 4 LP 5

LP Interests

Performance fees & carried interest

Other qualifying transactions Investee Companies Investee Companies Investee Companies SPV/ Master Fund SPV SPV

Limited Partnership Fund

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Global office locations

New York | New Haven | Greenwich | Los Angeles | Rancho Santa Fe | San Diego | San Francisco | British Virgin Islands London | Cambridge | Geneva | Milan | Padua | Hong Kong | Singapore | Tokyo | Sydney

Send in your questions in the Q&A section.

Webinar | A new fund vehicle for private equity in Hong Kong | 26 August 2020

Thank you for joining us.

  • Daniel Tang
  • Partner | Hong Kong

+852 3711 1668 Daniel.Tang@withersworldwide.com

  • Daniel Yong
  • Partner | Singapore

+65 6238 3910 Daniel.Yong@witherskhattarwong.com

  • Junko Shiokawa
  • Partner | Hong Kong

+852 3711 1628 Junko.Shiokawa@withersworldwide.com