July 2, 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 the issue of renminbi-denominated bonds in Hong Kong, saying that it will maintain Hong Kong's status as an international finance centre and also aid Mainland fiscal reform.

Yam said that at first it will be a small market, but it is important that Hong Kong's financial system is ready to handle renminbi-denominated activities in 2 out of the 3 channels of financial intermediation - these channels are banking and debt.

The renminbi will be included alongside the HK$, the Euro and the USD, and it will be possible for the equity channel to follow suit, so, if there is demand, share listing and trading will be denominated in renminbi.

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June 15, 2007.

Recently, the government of Hong Kong has published its final report on the public consultation on tax reform. The report provides recommendations about exploring some options aimed at the development and enlargement of narrow tax base in Hong Kong.

The consultation that lasted for 9 months was productive as it had received 2 400 written submissions, which was announced by Financial Secretary Henry Tang on May 12, 2007. The launch of the consultation was conditioned by the government's decision of scrapping plans for a goods and services tax.

It has been stated by Tang that although the government's introduction of a goods and services tax cannot be accepted by public at that point in time, the consultation helped to get a better understanding the problematically narrow tax base in Hong Kong. Also, the public has accepted the need for broadening the tax base in order to stabilize revenue.

Regarding broadening the tax base, several options are possible - these are introducing a tax on luxury goods, a progressive profits tax, a green tax, a land and sea departure tax, and reducing personal allowances under salaries tax. However, to broaden the tax base and stabilise revenue sources, the government of Hong Kong should not rely on one of the above-mentioned options, but rather apply several options.

Tang also observed that although Hong Kong's economy has recovered and the government's financial position has improved, the territory's dependency ratio would gradually rise in the face of ageing population and face challenges conditioned by globalisation.

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June 2, 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.

Phase 1 of the ordinance regards the prohibition to use dishonest techniques for sending large quantities of commercial electronic messages, fraud and other activities that are connected with multiple sending. Phase 1 came into effect on June 1, 2007.

Phase 2 of the ordinance regards providing an "opt-out" regime and will come into effect by the end of 2007. It will set up do-not-call registers. Also, the senders of commercial electronic messages will have to provide accurate sender information, offer unsubscribe facilities and honour unsubscribe requests within 10 working days.

It is impossible to implement Phase 2 until the end of 2007 because of the necessity to set up the registers, discuss codes of practice and update the systems of businesses.

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May 20, 2007. On May 16, 2007, the Swiss Private Bankers' Association's meeting was held in Geneva. At the meeting, Hong Kong Financial Secretary Henry Tang invited swiss bankers to use Hong Kong as a regional base for managing their businesses in Asia.

According to Tang, because of Asia's high savings rate and strong economic growth, Hong Kong has beneficial position as a fast-growing economic area. Particularly, it benefits from mainland China, which is probably one of the fastest growing wealth management markets all over the world.

Henry Tang emphasized that it is essential to build reputation for private bankers, and therefore it might be crucial to come into the market early.

In accordance with Tang, both Hong Kong and Switzerland are relatively small but outward-looking economies with enormous economic background and potential. Both Hong Kong and Switzerland are some of the world's best providers of banking, securities and foreign exchange services, however, it is still possible to improve business environment further.

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May 12, 2007. The Hong Kong Economic and Trade Office Seminar named "Hong Kong - New Opportunities as an International Financial Centre" was held on May 8, 2007 in Tokyo. At the seminar, Chief Executive of the Hong Kong Monetary Authority (HKMA) 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.

Yam found the fact that one country - China - has 2 financial systems with pronounced differences to be unique, and emphasized the increasing need for strengthening the cooperative relationship between the financial systems of China and Hong Kong.

Yam explained the strategy for Hong Kong's financial system to be implemented in order to take co-operation forward. The strategy consists of several vital elements, which are to facilitate the expanded presence of financial institutions from Hong Kong on the Mainland, to work with the Mainland authorities, to develop channels to make Hong Kong financial instruments available to investors on the Mainland, to strengthen the jurisdiction's ability to carry out financial transactions in the renminbi as an international currency, and to strengthen connections between the financial infrastructures of the Mainland and Hong Kong.

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April 27, 2007.

Hong Kong Financial Secretary Henry Tang suggests that abolition of estate duty has caused significant development in asset management and general financial services industries in Hong Kong.

On April 25, 2007, Tang told legislators that from 2004 to 2005 growth in Hong Kong's combined fund-management business was on 25%.

He also informed legislators on authorised funds and authorised hedge funds in Hong Kong, saying that the gross sales of mutual funds amounted to USD 24.3 billion in 2006, which is a 72% increase comparing with the USD 14.1 billion in 2005.

The Hong Kong Securities & Futures Commission authorised more than 200 new unit trusts and mutual funds in 2006. Total assets under management of all authorised funds increased from USD 66.7 billion at the end of 2005 to USD 91 billion at the end of 2006, which is a 36% rise.

According to Tang, Hong Kong's bank deposits in 2006 rose 17%, while bank deposits grew only 3% in the average from 2001 to 2005.

As compared with 2005, Hong Kong's FDI in 2006 was more than more than 27% up.

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April 12, 2007. According to the Global Financial Centers Index (GFCI), the world's top index of competitiveness for world's financial centres, Hong Kong is the 3rd most competitive financial centre in the world.

The study was commissioned by the municipal body of London's financial district, the City of London Corporation, in order to evaluate the competitiveness of 46 major financial centres of the world. So that the competitiveness of financial centres was objectively assessed, the ranking of the study was based on various criteria including the regulation, tax environment, corruption levels, ease of doing business, the flexibility of the labour market, development of human capital and others. Also, the results of an online survey of financial practitioners was taken into account.

It is important that Hong Kong left behind such world financila hubs as Singapore and Switzerland as well as such offshore financial jurisdictions as the Channel Islands, the Cayman Islands and Bermuda.

The study says that Hong Kong has the strictest legal system and most experienced personnel in the world. It also confirms that the 3rd most competitive centre in the world is the most important financial centre in the Asian region gradually becoming a global financial centre.

London tops the list of financial centres. It is followed by New York. Then, Hong Kong is ranked as 3rd. It is followed by Singapore, Zurich, Frankfurt, Sydney, Chicago, Tokyo and Geneva.

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March 30, 2007. India's largest public sector bank in terms of aggregate business, Canara Bank made an official announcement that it is opening the 1st branch in Hong Kong on March 28, which is an expanding move for the bank.

Previously, Canara bank that is an Indian government-owned bank had a deposit taking company in Hong Kong entitled Indo Hong Kong International Finance Ltd. and was present in Hong Kong since 1985.

At the opening ceremony, Chairman and Managing Director of Canara Bank M.B.N. Rao announced that new branch permits greater freedom of exploring various opportunities for the company. These opportunities regard the growing trade between India and China which could be carried out with the help of increased trade finance, syndicated loans and treasury operations.

Associate Director-General of Investment Promotion at Invest Hong Kong Mark Michelson welcomed the Bank's expansion and said that it has rightly identified the huge potential from the growing trade relations between India and the Greater China region.

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March 12, 2007. At the 14th APEC (Asia-Pacific Economic Cooperation) SME (Small and Medium Enterprise) Ministerial Meeting in Hobart, Australia, held on on March 8-9, 2007, Joseph Lai, 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.

Lai also noted that Hong Kong has been paying much attention to providing an favourable environment to develop high value-added and technology-based industries and services.

Key outcome of the 14th APEC SME Ministerial Meeting was pursuing small and medium enterprises innovation, which is essential in order to promote more energy efficient industry solutions. Also, the Meeting highlighted such issues as hard work on knowledge improvement amongst SMEs of the business assistance programs, reducing transaction costs and red tape imposed by governments and encouraging to use e-commerce and online transactions with the government.

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February 21, 2007. The Hong Kong Monetary Authority (HKMA) released the latest figures on foreign currency reserve assets.

According to the announcement made by the 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. This figure includes unsettled forward contracts.

Hong Kong is the 8th largest holder of foreign currency reserves in the world. As to other leaders that precede Hong Kong, these are Mainland China, Japan, Russia, Taiwan, Korea, India and Singapore.

According to the HKMA, the total foreign currency reserve assets of USD 133.7 billion account for approximately 37% of Hong Kong dollar, and represent over 6 times the currency in circulation.

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February 9, 2007. The Hong Kong Monetary Authority (HKMA) stated that in the end of January 2007 the amount of official foreign currency reserve assets of Hong Kong made USD 133.7 billion. Hong Kong is the 8th largest holder of foreign currency reserves in the world, after Mainland China, Japan, Russia, Taiwan, Korea, India and Singapore.

The foreign currency reserve assets of Hong Kong, including unsettled forward contracts, in the end of January also stood at USD 133.7 billion. By the HKMA information, total foreign currency reserve assets of USD 133.7 billion are about 37% of Hong Kong dollar - they represent over 6 times the currency in circulation.

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February 1, 2007. According to Frederick Ma, Secretary for Financial Services and the Treasury of Hong Kong, the rewrite of the Companies Ordinance will bring substantial benefit to Hong Kong, regarding strengthening its status as a global business and financial centre, and enhancing its competitiveness. The rewrite is planned to be conducted in 2 phases, as it requires research, public consultations and drafting.

The rewrite was launched in the middle of 2006. The 1st phase of this exercise will deal with provisions concerning the formation and operation of companies. The 2nd one will cover the remaining provisions on companies' winding-up. Also, public consultation will be launched in order to discuss the ordinance's accounting and auditing provisions.

The rewrite includes complex issues, which are aimed in making company law more clear understandable and user-friendly. About 600 000 companies registered and incorporated in Hong Kong can save business costs, due to certain rationalized procedures and requirements.

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January 29, 2007. By words of Joseph Yam Linking, Hong Kong Monetary Authority Chief Executive, financial markets of Hong Kong and mainland China should bring substantial dividends to the economy of Hong Kong. According to him, certain dividends will be gained by making the market wider and deeper, as it becomes more liquid, and the price-discovery process is more efficient.

Yam Linking indicated that bigger markets have essential advantages over smaller ones. There is also an overlap in the instruments traded in mainland China and Hong Kong markets, which is an obvious benefit for Hong Kong.

Yam Linking concluded that he did not mean unification, but rather establishing a channel between the markets of Hong Kong and mainland China, that will allow them to function as one, enjoying the benefits of one large market.

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January 26, 2007. Hong Kong introduced new anti-money laundering rule, according to which customers' identities and transactions of HK$ 8 000 dollars (USD 1 026) or more are to be verified by remittance agents and money changers.

The new requirements are implemented to meet the new international standards on combating money laundering and terrorism financing. Customers should produce their Hong Kong identity cards, certificates of identity, documents of identity or travel documents for verification. Also they must provide their telephone numbers and addresses. Information on the sender and the instructor of any transaction is to be recorded and held by agents and money changers.

Sally Wong, Commissioner for Narcotics, urged agents and money changers to include sender's particulars in the transactions, in order to provide remittance to states demanding such information. She also suggested that those who came across suspicious transactions should report to a team set up by the joint financial intelligence unit - Police and Customs.

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January 17, 2007. The Heritage Foundation has ranked Hong Kong as the freest economy in the world for the 13th consecutive year.

The Foundation's latest annual Index of Economic Freedom published in conjunction with the Wall Street Journal provides a user-friendly index as a useful tool for policymakers and investors.

10 broad factors in 157 economies worldwide were assessed by the last study. They included business freedom, trade freedom, investment freedom, financial freedom, fiscal freedom, monetary freedom, freedom for government, freedom from corruption, property rights and labour freedom. Hong Kong was ranked 1st in 4 broad factors - trade, investment, financial freedom and property rights.

Hong Kong again remained the freest economy in the world. It is followed by Singapore and Australia. Hong Kong was also the top 10 in another 4 areas - fiscal freedom, monetary freedom, freedom from government and labour.

According to the report, income tax and corporate tax rates were extremely low in Hong Kong, and overall taxation was relatively small as a percentage of Gross Domestic Product (GDP). Also, Hong Kong was wide open to investment, with nearly no restrictions on foreign capital.

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January 6, 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.

According to its statistical data, there were 99,087 property sale and purchase agreements in Hong Kong in 2006. The total consideration involved in these agreements fell 20.3% year-on-year to USD 40.5 billion.

Comparing to 2005, the number of assignments of building units lodged for registration fell 19.4% in 2006. The number of assignments of building units in Hong Kong was 125,983 in 2006.

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January 3, 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.

On January 2, 2007, Tang spoke on a radio talk show. Financial Secretary agreed that Hong Kong's recent economic development is good, but he suggested that the country should be ready to adequately face future challenges.

According to him, the 2007-2008 Budget will be based on the principle of prudent management of public finances. He also considers that the Budget will give the government of Hong Kong the next term flexibility.

Regarding requests to revert the salary tax to the 2002-2003 level, Tang said the elements  to determine the tax, including allowances, the level of tax rates and the standard rate, have been changed since 2002-2003 and Tang thinks there is no necessity to change all the elements simultaneously.

During the talk show, Tang was asked about the possibility that other cities in mainland China could replace Hong Kong as a financial centre. Financial Secretary produced the answer that the Mainland could to handle more than one such centre. Hong Kong and other Mainland cities are at different development stages and, therefore, they could support each other and  perform successfully.

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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.