December 21, 2006. The Hong Kong Census and Statistics Department says that in November inflation in Hong Kong accelerated to 2.2% on higher clothing, housing and food prices. To compare this figure, the Department indicates 2% inflation in October 2006.

However, inflation could get higher if Hong Kong imports more inflation from China due to its stronger currency, the government says. Further strength in the Chinese yuan would make imports into Hong Kong more expensive, mostly through food prices, which are 25% of the composite consumer price index.  Since currency reforms in July 2005, the Chinese yuan has risen around 3.6% against the USD, while the Hong Kong dollar has remained relatively steady because of its peg to the USD.
The rising pace of inflation has slowed since August, when the year-on-year monthly consumer price reading reached an 8-year high of 2.5%.

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November 8, 2006. According to the International Monetary Fund, the economy of Hong Kong is expected to grow by 6% this year and maintain growth of 5% in 2007.

Concluding a visit to Hong Kong for the annual Article IV Consultation, the International Monetary Fund stated that growth prospects will depend on the management and expanding the evolving financial integration with the Mainland.

The main risks to the Hong Kong's economy could be conditioned by a possible global economic downturn, particularly in the USA, and a rise in protectionist sentiment against the Mainland.

All in all, the Hong Kong government's efforts to strengthen market infrastructure and promote financial integration with the Mainland, including its fiscal and exchange rate systems, were praised by the IMF.

Also, the IMF welcomed progress made by the country authorities in enforcing anti-money laundering and counter-terrorist financing guidelines, introducing the deposit insurance scheme, assessing potential sources of stress in equity markets and strengthening corporate governance.

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October 30, 2006. Last week the information appeared that 2 new banking regulations have been gazetted in Hong Kong, and they will be tabled at the Legislative Council on November 1. These 2 regulations are the Banking (Capital) Rules and Banking (Disclosure) Rules. The rules are to be in force from January 1, 2007.

The rules form part of the implementation of the Basle II capital adequacy standards and outline how the capital adequacy ratio of locally incorporated authorised institutions must be calculated. They also outline what information on the state of affairs, capital adequacy ratio and profit and loss must be publicly disclosed.

In accordance with the Authority's Deputy Chief Executive William Ryback, the adoption of the rules will contribute to greater robustness of the banking system as well as to more banking stability.

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October 18, 2006. According to the UN's World Investment Report 2006, Hong Kong attracted USD 35.9 billion in foreign direct investment (FDI) last year, up 5.6% on 2004. So, Hong Kong is the 2nd-largest FDI destination in Asia after China, which amassed USD 72.4 billion.

The FDI that flowed into Hong Kong was larger than the combined total FDI for Singapore (USD 20.1 billion), South Korea (USD 7.2 billion) and India (USD 6.6 billion). Hong Kong was the 6th in FDI inflows in 2005, and it continues to be a major destination for FDI and one of the "front-runner" economies.

In accordance with the latest figures of the Census & Statistics Department, Hong Kong's inward FDI in the 1st half of this year has already amounted to USD 20.66 billion.

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October 16, 2006. Hong Kong is likely to refuse discussing joining the European Union's tax information-sharing scheme applied under the Savings Tax Directive.

The European Commission recently announced its intention to extend the Directive to major Asian banking entrepots. The EU would like to sign the Agreement and include information-sharing there. However, Hong Kong's Deputy Secretary for Financial Services & the Treasury in Hong Kong Martin Glass, last week explained the Society of Trust and Estate Practitioners' Trusts & 'Tax in Asia' conference that the government and the commissioner of inland revenue did not have the power to share information with other tax authorities, their powers were relatively limited and extend only to information which is required for Hong Kong's own tax purposes.

The Savings Tax Directive extending to a number of '3rd countries' like Switzerland, the Channel Islands and Caribbean offshore territories was introduced in July 2005 to facilitate the exchange of information between EU tax authorities on some particular types of savings and investments held by EU residents in their territory. So, in accordance with it, interest earned could be taxed in the investor's home state.

There are several ways for investors to avoid the directive such as to switch assets to vehicles not covered by the legislation, however the most obvious avoidance strategy for investors seems to be the shift of their money to more tax-friendly jurisdictions. Some suggest that Hong Kong, Dubai and Singapore have been major beneficiaries.

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Our latest offshore news
30/09/2006
Welcome to join our discussions
on Offshore Companies, Incorporations,
Jurisdictions, etc..
23/10/2007
A company operating in Hamburg, Beiersdorf Aktiengesellschaft has recently announced entering a share purchase agreement with a BVI-incorporated Global Source Investments Limited and Hong Kong-incorporated C-BONS Holding (International) Limited.
02/07/2007
Hong Kong Financial Secretary Henry Tang suggests that issuing renminbi-denominated financial bonds in Hong Kong will reinforce its banking status. Monetary Authority Chief Executive Joseph Yam has also commented on this issue.
20/06/2007
According to the data released by the Census & Statistics Department of Hong Kong, the BVI is one of the top destinations for Hong Kong's external factor income outflow and inflow in Quarter 1 of 2007.
15/06/2007
The government of Hong Kong has published its final report on the public consultation on tax reform to provide recommendations about exploring some options aimed at the development and enlargement of narrow tax base in Hong Kong.
02/06/2007
On May 28, 2007, the launch of Unsolicited Electronic Messages Ordinance from June 1 was announced by Hong Kong's Commerce, Industry & Technology Bureau. The Ordinance is to be carried out in 2 phases.
20/05/2007
At the Swiss Private Bankers' Association's meeting, Hong Kong Financial Secretary Henry Tang invited swiss bankers to use Hong Kong as a regional base for managing their businesses in Asia.
12/05/2007
At the Hong Kong Economic and Trade Office Seminar named "Hong Kong - New Opportunities as an International Financial Centre", Joseph Yam announced a strategy to make a greater Hong Kong's contribution to the reform and liberalisation of the Mainland China and to maintain the status of Hong Kong as an international financial centre.
27/04/2007
On April 25, 2007, Hong Kong Financial Secretary Henry Tang told legislators that from 2004 to 2005 growth in Hong Kong's combined fund-management business was on 25%.
12/04/2007
According to the Global Financial Centers Index (GFCI), Hong Kong is the 3rd most competitive financial centre in the world.
30/03/2007
India's largest public sector bank in terms of aggregate business, Canara Bank announced that it is opening the 1st branch in Hong Kong, which is an expanding move for the bank.
12/03/2007
At the 14th APEC SME Ministerial Meeting, Director-General of the Hong Kong Trade & Industry department, stated that Hong Kong's favourable business environment is underpinned by the rule of law, free flow of capital and information, a low and simple tax regime, an independent judiciary and an efficient government.
21/02/2007
According to the announcement made by the Hong Kong Monetary Authority (HKMA) on February 7, 2007, Hong Kong's official foreign currency reserve assets amounted to the total of USD 133.7 billion in the end of January 2007.
09/02/2007
Hong Kong Monetary Authority announced the amount of official foreign currency reserve assets on the end of January 2007, which totalled at USD 133.7 billion.
01/02/2007
Rewrite of the Companies Ordinance will bring substantial benefits to Hong Kong, especially in strengthening competitiveness of the jurisdiction and its status as a global business and financial centre.
29/01/2007
Hong Kong is to receive benefits from increased links with the market of mainland China, as stated by Hong Kong Monetary Authority Chief Executive.
26/01/2007
New Anti-Money Laundering rules are introduced by Hong Kong's Security Bureau. Customers' identities and record transactions of HK$ 8 000 dollars or more must be verified by remittance agents and money changers.
17/01/2007
The Heritage Foundation has ranked Hong Kong as the freest economy in the world for the 13th consecutive year. It is followed by Singapore and Australia.
06/01/2007
Comparing to 2005, property sale and purchase agreements in Hong Kong in 2006 fell 19.9%. This fact was released on January 4, 2007 by the Land Registry.
03/01/2007
Financial Secretary of Hong Kong, Henry Tang understands people's high expectations for the 2007-2008 Budget, however, he suggests the necessity of a balance between the interests of different parties when devising it.
21/12/2006
In November, inflation in Hong Kong accelerated to 2.2% on higher clothing, housing and food prices. To compare this figure, the Census and Statistics Department indicates 2% inflation in October.
08/11/2006
According to the IMF, the economy of Hong Kong is expected to grow by 6% this year and maintain growth of 5% in 2007. The IMF stated that growth prospects will depend on the management and expanding the evolving financial integration with the Mainland.
30/10/2006
In Hong Kong, two new banking regulations have been gazetted to be tabled at the Legislative Council on November 1. These are the Banking (Capital) Rules and Banking (Disclosure) Rules. The rules are to be in force from January 1, 2007.
18/10/2006
According to the UN's World Investment Report 2006, Hong Kong attracted USD 35.9 billion in foreign direct investment (FDI) last year, up 5.6% on 2004. So, Hong Kong is the 2nd-largest FDI destination in Asia after China, which amassed USD 72.4 billion.
16/10/2006
Hong Kong is likely to refuse discussing joining the EU's tax information-sharing scheme applied under the Savings Tax Directive. The EU would like to sign the Agreement and include information-sharing there.
25/11/2007
Recently, the Seychelles International Business Authority has sponsored Asia Offshore Association (AOA) Conference in Vietnam, and International Tax Planning Association (ITPA) meeting in Hong Kong.