Securing Investment Visas For Hong Kong
Discover the benefits of residency on an Investor visa in Hong Kong
At Haskew Law we are experts in the niche area of immigration by investment for Hong Kong. Our team strive to provide the most suitable investment opportunities to meet our clients needs to ensure they can secure residency under the current immigration laws supporting Investments For Hong Kong from Foreign investors.
Second Citizenship and residency by investment for Hong Kong is no longer the preserve of the few. Migration Investment programmes are now the fastest growing area of immigration law globally as people come to realise residency and a second citizenship is not just desirable but, a vital part of any effective global freedom, privacy and security strategy.
Secure a residency visa for Hong Kong as an investor
In September 2003, the Immigration Department ("Immigration Department") of the Hong Kong Special Administrative Region of the People's Republic of China ("Hong Kong") introduced the Capital Investment Entrant Scheme ("Scheme"). Prior to the introduction of the Scheme, individuals seeking residency in return for investment in Hong Kong had to rely upon a subset of the Employment Visa known as the Employment Visa Based upon Investment in Hong Kong (the "Business Investment Visa").
I. The Capital Investment Entrant Scheme
The Capital Investment Entrant Scheme was officially suspended on 15 January 2015. This page will be updated once more is known about next steps or alternative options.
II. Business investment visa
Business Investment Visas are routinely granted to qualifying applicants and often are processed in approximately two to three months.
1. The Immigration test - substantial benefit to the economy of Hong Kong as a whole
In its barest sense, the Business Investment Visa test is often passed by virtue of being able to demonstrate to the Immigration Department that a suitable business vehicle will be created, local jobs will be created through implementation of the investment activities, that local vendors and suppliers will be utilized in the planned commercial activities, that the overall industry within which the investment activities are undertaken will be advantaged in some discernible way and that in the medium to long term the investment activities will result in the presence of a sound business entity.
This can take the form of a Limited Liability Company formed in Hong Kong or registration of a foreign corporation under the Hong Kong Companies Ordinance. Sole proprietorships and partnerships are not usually acceptable.
2. Documentation and required information
- An application form ID(E) 936, with relevant parts duly completed and signed
- A copy of the sponsor's Permanent Hong Kong identity card and/or travel document (if he is sponsoring the applicant as an individual)
- A copy of the sponsor's Business Registration Certificate (if he is sponsoring the applicant as a company)
- A copy of Business Registration Certificate of the company which the applicant is going to invest or has invested. Copy of Form 1A (for sole proprietorship) or Form 1B plus Form X(i) and X(ii) (for a limited company) or Form 1C (for partnership) from the Company Registry
- Details, with proof, of the applicant's proposed business activities in Hong Kong
- Details, with proof, of the applicant's proposed investment in Hong Kong, his paid-up capital and source of funds
- Details of the personal particulars of all other Directors of the company and their whereabouts
- Reasons why the applicant's presence in Hong Kong is essential
- The number of local and expatriate employees
- Details, with proof, of the applicant's academic qualifications and experience relevant to the post, e.g. copies of diplomas, certificates and testimonials
- Details, with proof, of the applicant's plan to co-operate actively with Hong Kong commerce and industry
- Evidence of the applicant's past residence in Hong Kong, if any"
This list is not exhaustive and other documents and information are often required in individual cases. The Business Investment Visa is not available to Chinese residents of the Mainland and nationals from Afghanistan, Albania, Cambodia, Cuba, Laos, North Korea and Vietnam.
The Business Investment Visa has been in place for many years as one of several types of visas available to people seeking to reside in Hong Kong. A reading of the requirements clearly indicates that the objective of the Business Investment Visa is to encourage global investors to engage in business activities within and from Hong Kong. The Business Investment Visa is relatively inexpensive and easy to obtain.
B. Conditions of stay, application and fees
Upon issuance of the Business Investment Visa, the applicant and his dependents (spouse and unmarried dependent children under 18) will usually be granted a one-year stay. The period of stay is usually extended thereafter for two years on the basis that the commercial endeavours justifying the extension continue to satisfy the criteria of the business being of substantial benefit to the economy of Hong Kong as a whole. Others conditions which apply include, but are limited to, not committing any criminal offences, remaining engaged in the business and earning enough income as not to become an economic burden to Hong Kong.
The applicant must complete an application form ID(E) 936 and the prescribed fee is HKD 135.
C. Success of the business investment visa
The Business Investment Visa has served its purpose well for Hong Kong, even during 2003 when Hong Kong suffered dramatically due to SARS. The Immigration Department does not publish information that distinguishes between "employment" and "investment" visas, but the Director of the Immigration Department advised in 2002 that there are approximately 300 Business Investment Visas issued annually in Hong Kong and that number has remained steady for several years.
III. Scheme vs Business Investment Visa
Although there are quite a number of differences between the Scheme and the Investment Visa, the three most significant are the following:
- The Scheme does not require details of the applicant's proposed business activities in Hong Kong
- The Scheme does not require details of the applicant's academic qualifications
- The Investment Visa does not require an ongoing investment of HKD 6.5 million (approximately USD 834,000) in permissible investment assets
When one considers these differences and the relatively easy criteria which give rise to a Business Investment Visa approval it is hard to imagine why anyone would choose the Scheme over the Business Investment Visa unless, as previously stated, investors wish to merely "park" in or otherwise desire a "retirement" to Hong Kong.
A. Proposed business activities and academic qualifications
The policy underpinning the Scheme is designed to attract to, and maintain foreign capital in, Hong Kong. Economic commentators here have observed, somewhat cynically, that the last thing Hong Kong actually needs is more money invested here as many banks have only loaned a relatively small percentage of their available capital.
The Scheme has been further criticised as it basically caters to an investor regardless of whether or not he/she possesses any business acumen or education. The visa is granted without the investor having to actively participate in the economy or society. It is not uncommon to hear members of the public in Hong Kong expressing their concern that Hong Kong will be seen as so desperate for investment that it is now accepting residents who are likely to be unproductive and uneducated, yet wealthy.
It also is generally believed by many in the Hong Kong that the Scheme was largely designed for the wives or significant others of wealthy Mainland entrepreneurs. These Mainland entrepreneurs view the Scheme as a good investment ( Hong Kong is a prime "overseas" investment destination of such people) and relatively easy way to provide something of a "gift" to their wives or significant others. The statistics somewhat support this belief as more than half of the applications received, approved in principle and formally approved have been for "Chinese nationals" and "Taiwan residents".
The investment Required
The Scheme requires the applicant to make an investment of HKD 6.5 million (approximately USD 834,000) in defined Hong Kong assets. This is a fairly significant investment by any measure.
The Investment Visa basically requires the applicant to form and capitalise a Hong Kong private limited company, which involves an investment of approximately HKD 15,000 (approximately USD 1,900) or register a branch of the foreign corporation at an approximate cost of HKD 12,000 (approximately USD 1,500). Ongoing costs, including government fees, audits and company secretary, would probably not exceed HKD 20,000 per annum (USD 2,600). This is, by any measure, a fairly modest sum and is obviously far below that required by the Scheme.
<p">Although it is true that the applicant for the Investment Visa must demonstrate some proposed business activities and a certain level of education, these requirements are not too burdensome.
Simply stated, unless the applicant intends to be merely a passive investor in Hong Kong, the Business Investment Visa is an absolute bargain compared to the Scheme.
Corporate Services For Investors in Hong Kong
Hong Kong companies are ideal vehicles for international trading or consulting activities which are not sourced in Hong Kong and therefore can be conducted tax-free. The same is true for companies holding real estate which is located outside Hong Kong.
Our team assist our clients to incorporate and administer Hong Kong companies and offers comprehensive company secretarial, nominee and management services, as well as accounting and audit services through our partners at competitive fees.
For clients of Haskew Law, we also provide corporate and personnel directors from Hong Kong to companies incorporated in other jurisdictions.
Incorporation of Hong Kong Companies
We incorporate Hong Kong private limited companies, and our services include the preparation of memorandum and articles of association, share certificates, common seals, business registration certificate, statutory books, filing appropriate returns to the Companies Registry on time, and producing minutes of board meetings and general meetings.
Registered Office and Secretarial Services
We provide the registered office for Hong Kong companies, as well as company secretary services which include all main corporate secretarial tasks, for example maintaining the statutory books, preparation of minutes for directors and shareholders meetings, preparation of returns to be filed at the Companies Registry, etc.
For clients of Haskew Law and their companies administered by us, we assist in opening bank accounts with major Hong Kong and international banks, including assistance with preparation of documents necessary for the account opening procedures.
Trade in Goods
273 classes of Hong Kong made goods can be exported to the mainland free of tariff. For other categories of "made in Hong Kong" products, the Mainland also agreed to apply a zero import tariff from 1 January 2006 upon applications by local manufacturers for other product codes maintained on China's tariff system and meeting the CEPA rules of origin. The HKSAR agrees to bind its existing zero import tariff regime with respect to all goods of Mainland origin and not to impose restrictive regulations on trade in these goods.
Rules of Origin: A product is qualified as "made in Hong Kong" if it fulfils the rules of origin under CEPA. Local Hong Kong, Mainland, and overseas investors may set up new manufacturing operations in Hong Kong so that product subject to high Mainland tariffs may qualify for the CEPA origin rules and enjoy zero tariffs in the Mainland market. Investors may manufacture goods with high intellectual property content in Hong Kong, taking advantage of its legal system and the protection of the Intellectual Property regime.
A Hong Kong manufacturer should apply for a Certificate of Hong Kong origin - CEPA and pass the approved certificate to the Mainland importer. To qualify under CEPA, the good must meet the Rules of Origin (ROO) under CEPA so that the product can be claimed as HK origin to enjoy tariff preference. ROO set out the criteria and standards for a product to claim itself of a particular country of origin. For the 273 Mainland product codes covered in the initial phase, the following CEPA origin rules are adopted:
- 68% (187) of the products will adopt Hong Kong's existing origin rules for CEPA, which follows the "principal process" rule that looks to the location where the major production process takes place in defining the origin of a product. These items include textiles and clothing, jewellery, cosmetics, pharmaceutical products, and plastic and paper articles
- For 17% (46) of the products, including some chemical and metal products and some electronic products and electronic components, a change in tariff heading (CTH) approach will be used as the CEPA origin rules. The CTH approach is used by most WTO members
- A 30% value-added requirement will meet the CEPA origin rules for 15% (40) of the products, such as some electronic and optical components, watches and clocks, and watch movements. Under the CEPA ROO, only raw materials and component parts originated in Hong Kong, costs of local labour, and product development costs incurred in Hong Kong could be counted towards the value content calculation. A provision that allows product development costs of design, development, and intellectual property to count towards the 30% value-added requirement is expected to stimulate the development of creative industries and high value-added activities in Hong Kong. The value-added requirement includes skilled processes performed before, during, or after a product's manufacture that increase its selling price
A manufacturer can continue to use an Outward Processing Arrangement (OPA) to subcontract outside its Hong Kong subsidiary or use minor finishing processes for goods intended for export to the Mainland. After outward processing, the finished goods must be returned to Hong Kong and exported to the Mainland under the CEPA in order to claim the zero import tariff concession. Semi-finished goods do not qualify under the CEPA.
Trade in Services
CEPA provisions on market access cover a total of 18 services industries, including management consultant services, exhibitions and conventions, advertising, accountancy, construction and real estate, medical and dental services, distribution services, logistics services, freight forwarding and agency services, storage and warehousing services, transport services, tourism, audiovisual, legal services, banking, securities and insurance. To be entitled to the benefits of CEPA, a service company must have substantive business activity in Hong Kong by fulfilling all of the following criteria:
- The company must be incorporated under the laws of Hong Kong
- The company must be liable to pay profits tax in Hong Kong
- The company must employ 50% or more of its total staff in Hong Kong
The minimum period of the company's substantive business operations in Hong Kong is three years, but for construction and real estate, banking and insurance, the requirement is five years. Although the exact requirements for a company to be qualified by industries, the assessment will be on a non-discriminatory and objective basis.
Similar to trade in goods, the HKSAR agrees to bind its existing services regime for and undertake not to introduce new discriminatory measures against, services and services suppliers of the Mainland for those sectors covered in the CEPA.
Definition of "Hong Kong companies" for Services: To be eligible for enjoying the benefits offered by the Mainland under the CEPA, a company must have "substantive business operations" in the HKSAR as assessed on the basis of the following criteria:
- The company must be incorporated under the laws of the HKSAR
- The company must pay profits tax in the HKSAR (or be exempted by law from paying such tax)
- The length of the company's substantive business operations in the HKSAR
- The size and nature of business activity of the company's office in the HKSAR
- The proportion of the company's staff force employed in the HKSAR
The two sides agree to adopt a "sectoral" approach to take into account the unique characteristics of each individual service sector.
Trade and Investment Facilitation
Both sides agree on promoting cooperation in the following seven areas: Customs Clearance Facilitation, Quarantine and Inspection of Commodities, Quality Assurance and Food Safety, Cooperation of Small and Medium-Sized Enterprises (SMEs), Cooperation in Chinese Medicine and Medical Products, Electronic Commerce, Trade and Investment Promotion, and Transparency in Laws and Regulations.
Establishing A Hong Kong Trust
Trusts have many applications and advantages – the protection and preservation of assets, tax planning, succession planning or simply avoiding the expense and delay of obtaining probate under a will. They also provide a high degree of confidentiality.
Hong Kong’s trust law regime was based primarily on English common law, which was supplemented by the Trustee Ordinance (Cap 29) and the Perpetuities and Accumulation Ordinance (Cap 257), enacted in 1934 and 1970 respectively. With the introduction of the Trust Law (Amendment) Ordinance 2013, however, Hong Kong comprehensively modernised its trust law to make it a much more competitive and attractive proposition for trusts.
The major changes brought in by the Trust Law (Amendment) Ordinance 2013 were to:
- Abolish the rule against perpetuity and the rule against accumulations for all new non-charitable trusts, enabling settlors to set up perpetual trusts in Hong Kong.
- Protect against forced heirship rules by providing that the transfer of movable property held on trust should not be affected by foreign laws of inheritance.
- Provide that a trust will not be invalidated because the settlor has retained the power of investment or asset management functions.
- Provide a clear statement of the standard of care to be expected from a trustee.
- Limit the use of trustees’ exemption clause to enhance the protection of beneficiaries.
- Enhance the default powers of trustees to facilitate the effective administration of trusts by providing powers to:
- appoint agents, nominees and custodians;
- insure the trust property against risks of loss or damage caused by any event;
- receive remuneration under specific circumstances if they act in a professional capacity; and
- make investments with less restriction.
Placing the shares of an offshore company within a trust can offer substantial tax and non-tax related advantages, which will accrue both on death, and during the lifetime of the trust settlor. These advantages may be summarised as follows:
- Inheritance tax: On death, the inheritance tax which would normally be assessed on the value of the shares would generally be eradicated.
- Lifetime tax savings: Substantial income and capital gains tax advantages may accrue to a settlor as a result of transferring assets into the trust.
- Asset protection: Assets placed into trust are generally beyond the reach of creditors who might arise as a result of financial difficulties, divorce proceedings, litigation etc.
- Avoidance of probate: Assets in trust can be passed on to the next generation without the disruption, delays, costs and loss of confidentiality associated with the probate procedure when assets are bequeathed by will.
- Continuity: Trusts provide a means whereby assets can continue to be administered in accordance with the wishes of the settlor after death, such as to protect minors, infirm, weak or spendthrift beneficiaries.
- Retaining investment powers: Hong Kong trust law allows the settlor to retain substantial investment powers over trust assets, without affecting the validity of the trust.
Fees for drafting the trust deed and for the provision of trustee services will be quoted on a case-by-case basis.
Hong Kong Companies And The Advantages:
1.) British legal system as background
2.) Very low tax rate (around 16,5% on net profit)
3.) Tax-exempt for income not incurred in HK
4.) Beneficiary owner’s identity can be hidden from public company record by using Nominee service
5.) No restriction on fund transfer to and from most part of the world
6.) Close to and with excellent relationship with Mainland China
7.) Being international centre of information exchange and transportation hub
8.) Enjoy convenience of international banking system;
|Type of entity:||Private Limited|
|Shelf company availability:||Yes|
|Our time to establish a new company:||10 days (+time for the certification)|
|Double taxation treaty access||Details|
|Share capital or equivalent|
|Minimum paid up:||1 HK$|
|Usual authorized:||10,000 HK$|
|Shareholders and Directors|
|Minimum number:||One minimum Details|
|Local residency required:||No|
|Publicly accessible records:||Yes|
|Required:||Yes (may be a corporate body)|
|Local or qualified:||Local residency or local incorporated|
|Requirement to prepare:||Yes|
|Requirement to file accounts:||Yes|
|Publicly accessible accounts:||No|
|Registered office||Yes, must be maintained in Hong Kong|
|Restrictions on trading||Yes Details|
|Language of legislation and Corporate documents||Chinese and English|
|Change in domicile permitted:||No|
– Minimum 1 Shareholder and Director is required;
– Directors and Shareholders could be the same person
– No nationality restriction for shareholders and directors
– Minimum subscribed share capital is HK$ 1
– Registered address in Hong Kong
– One company secretary and should either be Hong Kong resident or Hong Kong limited company
– Company name should not be same as those already in company register and can be only English or only Chinese name or English plus Chinese name
Corporate shareholder and director are allowed:
1.) Certificate of Incorporation of corporate
2.) Memorandum and Articles of corporate
3.) Minutes of Directors approving taking up shares/directorship in the HK Company and authorization of signatory
A bank account in Hong Kong can open:
– Individual of any nationality
– Hong Kong registered company
– Offshore registered company
Documents and Certificates:
– Certificate of Incorporation (CI)
– Business Registration Certificate
– Copies of shareholders, directors etc registration documents (Original is kept in government for public search.)
|HONG KONG COMPANY FORMATION||HK$|
|1. Incorporation of the company, taxes and the initial opening fees||10000|
|2. Service opening expense||5000|
|3. Annual corporate secretary expense (obligatory)||1000|
|4. Annual company’s address in Hong Kong expense (obligatory)||1000|
|5. Opening of a bank account in Hong Kong||3360|
|The amount that should be paid to a new bank account, it stays in the bank and can be used later on as company’s money.***||5000***|
|6. Legal certification of all documents needed for opening a bank account||3115|
|7. Courier mail||1000|
|a.) Nominated stockholder / annually||2000|
|b.) Nominated director / annually||2000|
|c.) Power of Attorney||3000|
|d.) Legal certification of all documents||3500|
|9. State tax expenses||6600|
|a.) Business registration expense (the first year is included in the inc. costs)|
|b.) Annual tax return submission|
|10. Registered agent’s fee||2000|
|a.) Annual corporate secretary expense (obligatory)|
|b.) Annual company’s address in Hong Kong fee (obligatory)|
|11. Accounting and auditing (for small companies)||7000|
|12. Change of name||4000+dhl|
|13. Company de-registration||6000|
*** Amount of HK$ 5000,- is not an opening expense because the company can freely use this money for its own expenses. It is a deposit paid to a new bank account of the company in Hong Kong. This money is at the client’s free disposal as soon as the account is fully operational.
Companies registered in Hong Kong can be exempt from all taxes only if they don’t have any turnover with other Hong Kong companies. In order to open a bank account in Hong Kong or China, the client’s presence is necessary. Also, all beneficial owners/shareholders, holding more than 10% of company shares, are required to visit a HK bank branch and provide certified passport copy and a proof of address.
The opening procedure lasts approximately 30-45 days.
In order to start with the company opening procedure please provide us with:
1. name of the company (2-3 names of your choice)
2. passport copy (of all directors and shareholders)
3. utility bill for confirmation purpose
4. cash and capital contribution (in percent for each shareholder)
5. payment to the EURO COMMERCE LLC bank account
Company name should not be same as those already in company register and can be:
– Only English name
– Only Chinese name
* For practical reason, we don’t suggest using only Chinese name. The English name is useful for daily use, including banking transaction.
– English plus Chinese name
* In daily use, quoting only English name is enough.
A name that is similar to or identical to an existing company. A name that constitutes a criminal offence or is otherwise contrary to the public interest. A name that implies royal or government patronage.
The building society, Chamber of Commerce, co-operative, imperial, Kaifong, mass transit, municipal, royal, savings, tourist association, trust, trustee, underground railway, bank, insurance, assurance, reinsurance, fund management, asset management and investment fund. Name of the company must end with Limited or Ltd.
Hong Kong adopts a territorial source principle of taxation
Only profits which have a source in Hong Kong are taxable here. Profits sourced elsewhere are not subject to Hong Kong Profits Tax
There are three distinct and separate headings under which tax is levied :
– Corporations, partnerships, and sole proprietorship who carrying on a trade, professional or business in Hong Kong are subject to profits on profits which are generated from sources within Hong Kong;
– Only profits which arise in Hong Kong, or are derived from Hong Kong, are subject to profits tax;
– Currently, profits tax rate is 16.5%.
– Property tax is levied on the owners of real estate which is situated in Hong Kong.
Shareholders and Directors
The minimum number of directors and shareholders is one, who may be a natural person or a body corporate. They may be the same person or legal entity of any nationality, and need not be resident or incorporated in Hong Kong.
A Hong Kong company must appoint a company secretary, who may be a natural person or a body corporate, but the company secretary must be resident or incorporated in Hong Kong.
Restrictions on Trading
Cannot undertake banking or insurance activities or solicit funds from or sell its shares to the Public.
Hong Kong has Double Taxation Avoidance Agreements with next countries
Belgium, Denmark, Finland, Germany, Luxembourg, Netherlands, Norway, Singapore, Sri Lanka, Thailand, United Kingdom of Great Britain and Northern Ireland, United States of America and Vietnam.
China – Corporate and Personal Income Tax. Belgium, Thailand – dividends, interest and royalties. Other Countries – for shipping and aviation
Taxation in Hong Kong
An attractive Tax System
The major attractions of Hong Kong's tax system to foreign investors and businessmen - and in turn major reasons for their increasing presence and contribution here - are the following:
- The low rate of tax on profits
- The fact that only income and profits derived from Hong Kong are subject to tax
- That there is no tax on capital gain, dividends or interest
- The generous capital allowance
The current profits tax rate is 17.5% for corporations and 15.5% for non-corporate taxpayers. Personal tax is therefore also among the lowest in the world.
Hong Kong has a simple scheduler system of tax, in which only specified types of income, namely profits, salaries and property rental income, are taxable. This is different from an income tax system, under which a person is subject to tax on his aggregate income from all sources.
Territorial Source Concept
Taxation in Hong Kong is based on the territorial source principle. Hong Kong companies only pay tax on profits sourced in Hong Kong and the rate of taxation currently is 17.5% on assessable profits. A company pays no tax in Hong Kong on income derived from outside Hong Kong. To enhance certainty in the operation of the territorial source concept, there is also the possibility to obtain an advance ruling on the source of profits.
Hong Kong companies are therefore ideal vehicles for international trading or consulting activities which are not sourced in Hong Kong and therefore can be conducted free of tax. The same is true for companies holding real estate which is located outside Hong Kong.
Salaries tax is also only charged in Hong Kong sourced salaries. Expatriate employees who visit the territory for less than 61 days in a tax year are not liable to salaries tax. Employees who have paid tax of substantially the same nature as Hong Kong salaries tax in any territory outside Hong Kong are also exempt in respect of their foreign service income.
However, withholding tax on royalties does apply, currently at 30% of the usual tax rate, i.e. at an effective tax rate of 5.25%, and is only imposed on royalties paid to non-resident recipients not related to the payers. If they are related parties then a tax rate of 17.5% is applicable.
The Hong Kong tax system is also attractive because many taxes present in other jurisdictions are absent: gains from the sale of capital assets are not subject to tax; there is no withholding tax on dividends paid by Hong Kong companies; interest tax was abolished on 1 April 1989.
Generally all expenses, to the extent to which they have been incurred by a taxpayer in the production of chargeable profits, are allowed as deductions. Examples include interest on borrowed funds and repairs for plant and machinery used in producing profits. Losses can be carried forward and set off against future profits of that business. A corporation carrying on more than one trade may have losses in one trade offset against profits of the other. Generous capital allowances are given in respect of capital expenditure incurred on the construction of industrial and commercial buildings and structures and capital expenditure incurred for the purposes of producing chargeable profits. In the case of capital expenditure on the acquisition of plant and machinery, generous depreciation allowances are also provided.
Investor advantages of Hong Kong include:
- Economic and political stability, strategic location and a major financial and trading centre
- Well established legal system based on the Common Law and transparent regulations
- Premier gateway for trade and investment into and out of Mainland China
- Freest economy in the world with low corporate and personal taxes
- No restrictions on capital flows into and out of Hong Kong
- Convertible and stable currency linked to the US Dollar
- A global communications hub and has excellent communications infrastructure
- World class international airport and the world's busiest container port
Our specialised services are also a resource and complement to major law and consulting firms. We can help other firms and their clients with the unique and specific details required by incorporation and the proper management of Hong Kong companies, as well as provide all necessary related business services.
Closer Economic Partnership Agreement with China (CEPA)
CEPA, the bilateral free trade agreement between Hong Kong and Mainland China became effective on 1st January 2004. CEPA offers early market access to local and international companies with qualified Hong Kong-based companies regardless of nationality or size. Even after China complies with its World Trade Organization ("WTO") commitments, many Hong Kong companies will maintain a sustainable advantage as the CEPA offers even great concessions beyond China's commitments in its WTO accession.
The CEPA covers three broad areas, namely trade in goods, trade in services, and trade and investment facilitation. One strategy that overseas firms not yet in Hong Kong should consider is to partner or acquire eligible companies based in Hong Kong to take advantage of CEPA and gain first-mover advantage into the Mainland markets.
Broadly speaking, the liberalisation permits earlier access to Hong Kong companies and services providers to the Mainland market, ahead of China's WTO timetable. In some sectors like construction and real estate services, logistics services, transport services, distribution services, legal services, and audio-visual services, the concessions extend beyond China's WTO commitments. Unless positively exceeded by the concessions stipulated in the CEPA, China's WTO commitments, including both concessions and limitations, for each individual services sector continue to apply.
To be eligible for this enhanced "first mover advantage", Hong Kong companies must meet certain criteria.
Booking a Consultation
Complete our online enquiry form and one of our senior managers will arrange a confidential consultation to discuss your requirements and potential options.
At Haskew Law, our team are highly acclaimed as ready to manage even the most complex of cases. Our thesis, however, is to keep things as simple as possible. We believe it is important our clients are comfortable and remain in control of their international plans throughout the process. We endeavour to protect our clients best interests while delivering outstanding results.
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