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Country Rankings - Hong Kong


  • Aug 22, 2017   Hong Kong: simple

    At least life is a lot simpler for taxpayers in some parts of the world. Like Hong Kong. But I'm not sure what to make of Hong Kong's decision to proceed with a lower rate of corporate tax for small businesses. On the one hand, this is obviously good news for the small businesses in question, and it's hard to knock a Government for lowering somebody's tax liability. On the other hand, this is Hong Kong's first major foray into the world of progressive taxation, and while many would argue this is a positive development – should a small firm pay the same tax rate as a multi-billion dollar multinational corporation? – there is a downside, and that is that multiple rates of tax tend to increase tax complexity. True, Hong Kong already offers concessionary rates of tax on income from certain activities, such as fund management and intellectual property rights, but one of Hong Kong's main selling points is that its tax regime is stable and largely simple. It doesn't offer tax incentives as such, because they tend add complexity to the tax system. Singapore, usually Hong Kong's closest comparator, by contrast has created a vast array of different tax incentive schemes which are often difficult to keep track of. But then again, Hong Kong and Singapore are consistently rated as two of the best places to do business in the world because of their lack of taxes and other bureaucratic barriers, so perhaps there's really nothing to be worried about.
    Source: https://www.tax-news.com/news/Hong_Kong_To_Proceed_With_Lower_Profits_Tax_Rate____74995.html


  • Feb 27, 2017   Hong Kong: freer

    If only life was as simple for Italy and France as it was for Hong Kong and Singapore, which have recently announced their respective 2017 Budgets. No need for major fiscal surgery in these places. Just a bit of tinkering with the tax laws here and there, to ensure their economies remain in rude health. It's almost as if being a small, densely populated ex-British colony, preferably in the Asia-Pacific region, is a pre-requisite for economic success. Indeed, some of the similarities between Hong Kong and Singapore are quite striking. Hong Kong is six times the size of Washington, D.C., while Singapore is just 3.5 times larger than the US capital. The former's population is about 7m, and the latter's not far off 6m. Hong Kong's GDP was just under USD430bn last year, the world's 46th highest, and Singapore's was USD487bn, 41st. They are the world's freest and second-freest economies according to the Heritage Foundation. Income tax rates in Hong Kong and Singapore are quite similar, at 16.5 percent and 17 percent, respectively, for incorporated companies, although the latter provides more opportunities for much lower effective rates. Top rates of personal income tax are 17 percent and 22 percent, respectively. PwC says Hong Kong has the third-best tax system for businesses, while Singapore is the second-best place on the planet to do business, according to the World Bank. Both legal and economic systems are largely based on English common law. Even their long-term fiscal policies are heading in the same direction. Governments in both jurisdictions are increasing spending on health, education, and infrastructure, and are considering rises in taxation to pay for it. BEPS and new international tax transparency standards are also making themselves felt on the two territories' tax frameworks. But will rising taxes and spending mean that, eventually, Hong Kong and Singapore will become, well, just like most other high-tax, high-spend developed economies? Possibly. But such a transformation, if it happens, is likely to be a long way into the future. There's certainly no danger of Hong Kong and Singapore resembling France or Italy any time soon!
    Source: http://www.tax-news.com/news/Hong_Kongs_Budget_Provides_Tax_Relief____73555.html


  • Jan 16, 2017   Hong Kong: compliant

    Things aren't exactly plain sailing for Hong Kong at present either. Yes, the Special Administrative Region retains the status of the world's freest economy, and is the go-to territory for Asia-focused businesses looking for a minimum of government interference. But it is exactly this type of low-tax investment conduit that is under threat as a result of the BEPS project. Given the near-global consensus on BEPS, places like Hong Kong have little choice but to tow the line with regards to international tax standards, with the prospect of being blacklisted by the international community always lurking in the background. And these days reputation is almost as valuable a currency as stable and easy tax laws for investors. Hence, we have seen Hong Kong getting up to speed with the basic BEPS requirements over the last few weeks, and the Government is even considering new laws to increase the transparency surrounding the beneficial ownership of legal entities. But won't these measures merely deter new investors, and send existing ones into the arms of Hong Kong's rivals, like Singapore? In theory, no – not if other jurisdictions adopt the same, or very similar, measures. It's likely they will, despite the fact that the OECD's recommendations are being implemented around the world at various speeds. One could point to a small dip in recent incorporation figures as a sign that investors are being slightly turned off. For the Government and the financial center, these figures are probably nothing to worry about. Nevertheless, it will be interesting to watch how jurisdictions like Hong Kong adapt to ever-increasing demands for transparency.
    Source: http://www.tax-news.com/news/Hong_Kong_Consults_On_Beneficial_Ownership_Plans____73203.html


  • Sep 19, 2016   Hong Kong: open

    A lack of openness is not an accusation you can readily throw at Hong Kong. Especially after it won the Fraser Institute's world's freest economy award yet again, with small government, regulatory efficiency, low tax, and judicial independence named as four of its main virtues. This is worth pointing out, because it's certainly no flash in the pan – last February, Hong Kong was named the world's freest economy for the 22nd consecutive year by the Heritage Foundation. It seems remarkable that next year will see the 20th anniversary of the handover of Hong Kong's sovereignty to China by the United Kingdom, and that the 50-year contract under which the People's Republic guarantees Hong Kong's capitalist status quo is nearing the half-way mark. It's still a long way off, but one wonders what China has planned for Hong Kong in 2047, or even if Beijing knows that itself yet. It seems that, for the foreseeable future at least, Hong Kong is far too useful to China as a conduit for inward and outward investment for the latter to suddenly impose communist rule. In any case, China itself can be described as communist in name only these days, given the extent its recent economic reforms. So the prospect of change looks remote. However – and there's always going to be a however in this mix somewhere – just how Beijing deals with demands for unfettered democracy in Hong Kong remains to be seen. The 2014 protests, and the authorities' reaction to it in both China and the SAR, didn't look good from afar, and a repeat cannot be ruled out. So it seems that Hong Kong is destined to remain blissfully free economically, but not necessarily politically.
    Source: http://www.tax-news.com/news/Hong_Kong_Tops_Global_Freedom_Ranking_Again____72233.html


  • Feb 08, 2016   Hong Kong: shines

    The naming of Hong Kong as the most economically-free territory in the world by the Heritage Foundation is hardly the story of the century. It is, after all, the 22nd year on the trot that it has scooped this award. Nevertheless, it is the latest in a line of announcements attesting to the SAR's ongoing economic vibrancy. For example, last month, Invest Hong Kong, the territory's inward investment agency, announced that it assisted a record number of businesses to set up or expand in Hong Kong in 2015, a feat its Director General Simon Galpin attributed to Hong Kong's "enduring advantages," which include its low taxes, and its unique situation as the gateway to China. What's more, the latest local incorporation statistics show that the territory continues to buzz with entrepreneurial activity, with almost 1.3m local companies registered under the Companies Ordinance. And the stock market had another impressive year in 2015, when market capitalization exceeded HKD31 trillion (USD4 trillion) for the first time. Most importantly though, China has no reason to upset Hong Kong's financial apple cart. Indeed, both economies feed off of each other in a symbiotic kind of way. So companies operating in the jurisdiction can be confident that the status quo will be maintained – in fact the Basic Law stipulates that it must, until at least 2047. For these reasons, the "Pearl of the Orient" is awarded this week's first encomium. Nevertheless, there are reasons to be cautious. While Hong Kong's open economy is a source of strength, it is also cause of weakness; we have seen in the recent past how vulnerable it is to external shocks. When the rest of the world coughs, Hong Kong is almost guaranteed to catch a cold. And the world looks like it's sickening for something at the moment. What's more, while Hong Kong is very economically free, whether it is politically free is debatable. Actually, recent events have shown that debate is something that Beijing isn't very keen on at all. So while the Occupy Central protestors may have gone home a while ago, discontent with the democratic deficit bubbles beneath the surface. Generally, people resent feeling repressed. Add an economic recession to the mix and you've got a recipe for volatility. It will be interesting to see how Hong Kong's authorities would cope if presented with such a scenario. And how would investors react?
    Source: http://www.tax-news.com/news/HK_Again_Ranked_As_Freest_Economy_USs_Score_Falls____70345.html


  • Nov 09, 2015   Hong Kong: wise

    Hong Kong is one of the world's most open economies, if not the most open – the Heritage Foundation hasn't named it the world's freest economy for the past 20 years for nothing. This makes the territory one of the world's better-behaved citizens in the global trading arena, for it doesn't apply any tariffs to its imports, non-tariff barriers to trade are low, and the Government tends not to retaliate against trade barriers in other countries, or restrict certain imports. Unfortunately, the same cannot be said for many of Hong Kong's trading partners, with some readily resorting to protectionist measures against other nations to shelter certain industries from foreign competition. Despite its vulnerability in this sense, the Hong Kong Government has traditionally eschewed the idea of entering into free trade agreements. But the Government is now rethinking its place in the world trade arena having formulated a free trade strategy, probably out of fear of being marginalized in a world of regional super-FTAs, including the Trans-Pacific Partnership and the soon-to-be-formed Regional Comprehensive Economic Partnership. With the world trading environment evolving at a relatively fast pace, no nation can really afford to get left behind as new regional trade alliances form, especially Hong Kong. So trying to figure out where it fits into this new world seems like a wise move.
    Source: http://www.tax-news.com/news/Hong_Kong_Explains_Its_Free_Trade_Agreement_Agenda____69607.html


  • Feb 05, 2015   Hong Kong: still unrivalled

    In a similar vein to my car alarm analogy, Hong Kong is so nailed on to win the Heritage Foundation's "Freest Economy" gong every year, that we no longer tend to notice. So it was no surprise when the SAR topped the Heritage Foundation's league table again in the recently-released 2015 index, for the 21st straight year. However, as mundane as it seems, I have picked this out because of the political context in which the prize was awarded this time around. Save for the odd economic blip, for almost 15 years Hong Kong sailed along serenely, untroubled by the sort of social tensions that dog other countries. But you could almost say that the honeymoon period following the handover of Hong Kong's sovereignty by Britain to China has ended. It was always going to be difficult reconciling the value systems of Hong Kong and China, the former a beacon of economic liberalism, the latter a model of state control. Hence, the "one country, two systems" principle that underpins Hong Kong's constitution. It suits China to maintain the economic status quo, because Hong Kong acts as a huge, low-tax funnel for investment to flow into and out of China. And, although I wouldn't shout it from the rooftops, I've heard that Hong Kong is a useful repository for the wealth accumulated by the higher-ups in the Party. But perhaps the clash between liberalism and statism was always going to produce the sorts of scenes we saw last year during the Occupy Central protest. More worrying perhaps is that the authorities, in both Hong Kong and Beijing, don't really know how to respond to it. China's normal reaction, if such a protest were to erupt on the streets of Shanghai for instance, would be to send the troops in. The sight of a tank trundling between Hong Kong's skyscrapers wouldn't go down too well around the world, however. While Hong Kong's Chief Executive will be directly elected in 2017, the people haven't been given what they want, because the candidates will be chosen by Beijing. And so the problem hasn't gone away. Hong Kong's leaders can point to the Economic Freedom Index and a ream of recent data indicating record company formations and strong FDI inflows as proof that Hong Kong's offering to international investors is almost unrivalled. It gets another encomium from me. But even the Heritage Foundation noticed that Hong Kong's appeal has "faded" by just a little bit.
    Source: www.tax-news.com/news/Hong_Kong_Ranked_As_Freest_Economy_For_21st_Year____67122.html


  • Nov 20, 2014   Hong Kong: China's catalyst

    Although Hong Kong's liberal economic system is regularly praised here, this Special Administrative Region of China, as it is officially known, has not been shown in the best of lights on the world's television screens over recent weeks as the authorities, both in the SAR and in Beijing, struggle to square China's One Party mode of government with the democratic demands of Hong Kong's citizens. Another worrying, but little-reported development came in the form of figures from the Inland Revenue Department last week, which showed tax revenue growth slowing to a virtual standstill thanks to lacklustre economic growth in 2013/14. So, Hong Kong could do with a timely boost, and perhaps it has just got two: the launch of the Shanghai-Hong Kong Stock Connect scheme, which will allow eligible Mainland investors to trade stocks listed on the Stock Exchange of Hong Kong (SEHK) directly through the Shanghai Stock Exchange (SSE) while also allowing Hong Kong and overseas investors to trade stocks listed on the SSE directly through the SEHK; and the removal of the daily limit for conversions by Hong Kong residents of currency into and out of the Chinese renminbi. Hong Kong's standing as China's "offshore" financial centre gives it a natural head start in the race to become the preferred place for RMB trading as China slowly liberalizes its currency. But it's not without its rivals. As the world's largest foreign exchange centre, London is inevitably playing its part, and the UK Government has launched initiatives to facilitate growth in RMB trade. But earlier this year, Singapore, with its strong cultural ties to China, overtook the Square Mile to become the largest offshore RMB exchange platform outside of the SAR. As Hong Kong's Financial Secretary, John C Tsang, observed, the Stock Connect scheme should help to propel the development of offshore RMB business in Hong Kong, adding another string to the finance centre's bow and cementing its place as the premier offshore RMB centre. He also likened Hong Kong to a "laboratory" for new Chinese reform measures. However, this was not an entirely flattering description of Hong Kong's role in the world, hinting at its subservience to China. And experiments can also go wrong of course. The One Country, Two Systems experiment has probably exceeded expectations so far, but it is to be hoped that Beijing doesn't allow the democracy issue to become incendiary.
    Source: http://www.lowtax.net/news/HKMA-Removes-RMB-Conversion-Limit--66389.html


  • Jul 17, 2014   Hong Kong: saving for a rainy day

    Writing for another publication not so long ago, an editorial colleague of mine suggested that Hong Kong was finished as a financial center. Well, actually, he didn't go quite that far. But questions about Hong Kong's place in the world at present and in the future, now it is nestled firmly in the bosom of communist China, are worth exploring. For a start, it seems incongruous that China should be creating more competition for Hong Kong by establishing financial centers in the mainland, notably Shanghai, where a new free zone for the financial services and investment, commodities trading, and logistics sectors have been created. Then there's its rivalry with Singapore which has emerged as a regional investment and trading hub par excellence and voted the best place in the world to do business for the sixth year running by the Economist Intelligence Unit. Labuan, the chosen route of investment into South Korea, is also coming up fast on the rails. Hong Kong does undoubtedly have a problem with its narrow tax base, and its open economy is vulnerable to the waxing and waning fortunes of global finance, which leaves the Government's budget exposed in economic downturns. Earlier this year, the Hong Kong Government's fiscal commission arrived at the gloomy conclusion that if current fiscal trends continue, i.e. it continues to spend more on public services without raising taxes, it will have a structural deficit on its hands within seven years. The Government doesn't appear to want to reel in spending, but it does want to keep taxes low. So it has come up with the solution of a rainy day account akin to the sovereign wealth funds used in many oil-rich states. It could be argued that, had the UK had the foresight to do the same before North Sea oil and gas began to run out, it wouldn't have found itself in such fiscal dire straits. So Hong Kong gets a thumbs-up for what sounds like some sensible financial planning. But then perhaps we shouldn't have worried anyway. It has fiscal reserves equivalent to about 30 percent of GDP already, and it is not in China's interests to allow Hong Kong to go to wrack and ruin, as evidenced by its endorsement of the "one country, two systems" mode of government that underpins their relationship. So move along! Nothing to see here!
    Source: www.tax-news.com/news/Hong_Kong_To_Shore_Up_Finances_With_Future_Fund____65168.html


  • May 15, 2014   Hong Kong: careful as ever

    It seems repetitive to keep on congratulating Hong Kong for sticking to its last, and once again insisting that it will not increase taxes; but to do so against all the pressures for more spending that exist in every State implies a very clear commitment to small government and low taxation. Like Singapore, Hong Kong insists that it will not step onto the primrose path of popular appeasement. There are to be no bread and circuses! In limiting itself to a maximum level of public spending of 20 percent, the administration sets its face against increased debt as much as against increased taxes. For comparison, Denmark spends 67 percent of GDP, and even the USA, which is far from the top of the table, spends 43 percent of GDP, according to OECD figures. And it's not true that Hong Kong has a privileged population: there are just as many poor people, proportionately, as in other, larger countries. For years now the Government has rebated tax bills for poorer people and SMEs out of its annual surplus; there is no sales tax, no inheritance tax, no capital gains tax. Why do the dying economies of Europe not copy Hong Kong and its peers, instead of trying to squeeze the life out of them? No answer comes; but one good answer would be that, by now, they can't, because of the debt with which they have been saddled by their venal, populist politicians.
    Source: www.tax-news.com/news/Hong_Kong_Commits_To_LowTax_Policies____64632.html


  • Mar 13, 2014   Hong Kong: on its uppers

    Well, having got that off my chest, let's turn to something a bit lighter, which can be the competitive, chest-beating agonizing of Hong Kong and Singapore about hypothetical fiscal problems in 20 or 50 years' time. Not for them the misery of coping with rising interest rates: Hong Kong has a budget surplus and cash reserves of about USD300bn; Singapore is coy about admitting its position, but most estimates also suggest reserves of USD300bn. Bring on the interest rates! So what can explain their self-abasement? Perhaps it's a defensive strategy: if they pretend to be poor, perhaps the non-rich goliaths of the OECD will be less horrid to them? Hmmm, don't buy it. Perhaps it's something more sinister? Maybe the bosses have already crumpled under the "rich" countries anti-low-tax blitzkrieg and need to ramp up their tax-raising credentials with their populaces prior to doubling tax rates? No, don't buy that either. Ah! I've got it! There's going to be a takeover battle between Hong Kong and Singapore; either they're planning to buy each other, or maybe they're after Shanghai? No, OK, that's silly. So then all that's left is that there is an outbreak of common sense among Asian politicians. But of course that's even sillier. The mystery is unresolved.
    Source: www.tax-news.com/news/Hong_Kongs_Fiscal_Policies_Unsustainable_Working_Group_Says____63905.html


  • Aug 15, 2013   Hong Kong: wins the yuan race

    But these European renminbi volumes are dwarfed into insignificance by those in Hong Kong. HSBC’s forecast for renminbi-denominated bond issuance in Hong Kong in 2013 is in the region of RMB280bn to RMB360bn. Taiwan and Singapore have both launched challenges, with the former boasting deposits of RMN70bn just four months after opening for renminbi business; but Hong Kong has easily fended them off, with deposits of RMB677bn last April. Hong Kong settled 85 percent of China's external renminbi-denominated trade (worth a total of RMB1.7 trillion) in 2012. Eat your heart out, London! As with Luxembourg and Switzerland, but even more so, Hong Kong has built-in advantages when it comes to renminbi business, and has been fully supported by China (of which it is after all a part) in developing it. And it was Hong Kong, rather than London, that launched a HIBOR fixing, just a month ago. Mind you, after the LIBOR scandal, it would have been a stretch for London to have had a shot at that. Given China's large and growing trading involvement with the Middle-East and Africa, Dubai, another low-tax location, is the other place we shouldn't disregard in terms of renminbi usage – volumes are minimal so far, but that is probably just a temporary situation. Anyway, for now, Hong Kong rules the Yuan, in international terms at least.
    Source: www.lowtax.net/asp/story/front/Hong_Kong_Launches_RMB_HIBOR_Fixing____61151.html


  • Jul 18, 2013   Hong Kong: knuckles under

    So Hong Kong has finally fallen into line over the question of "Exchange of Information" (EOI) clauses in its tax treaties and "Tax Information Exchange Agreements" (TIEAs). For a long time the SAR was unwilling to include such clauses in its CDTAs, indeed its laws prevented it, and for that reason Hong Kong had very few double tax treaties, which eventually began to compromise its usefulness as a holding company location. Even after the law was changed to allow modern EOI wording in its tax treaties, Hong Kong could not (and would not) enter into TIEAs, which have in recent years become the norm between trading partners. There are probably a lot of people in the SAR who regret that the Rubicon has been crossed; but it was inevitable, and Hong Kong was just harming itself by continuing with its glorious isolation.
    Source: www.lowtax.net/asp/story/front/Hong_Kongs_LegCo_Passes_TIE_Framework_Bill____61396.html


  • Jul 11, 2013   Hong Kong: redux

    Another week, another superlative for Hong Kong, this time for the nth successive increase in the number of foreign and Chinese companies setting up there. Every year, there are more businesses, more people, more profit, more capital and more capitalists in Hong Kong. What are the limits? It all depends on Mother China, obviously; but Mother China is nothing if not pragmatic, and is most unlikely to upset the golden apple-cart. You have to wonder, under your breath, how many of China's great and good have personal financial interests in or through Hong Kong. It's a bit like the UK Government and the Channel Islands, or even Washington and Delaware. Nothing illegal, of course; but with all the pressure there is on super-cleanliness, there must be a lot of prominent figures in Europe and the US thinking hard about their untransparent international business interests. Not followed by the Chinese, perhaps, because why would anyone worry about having a Hong Kong connection? Curiously, the main threat to Hong Kong's stability may come from the SAR's huddled masses of unfranchised (mostly Chinese) citizens. Yet, why would they want to push it to a crunch, any more than the Bejing bosses? Revolutions normally need a large constituency of oppressed have-nots, and that's hardly a good description of Hong-Kongers. So the city-state, as it used to be called, will in all probability continue on its path of turning its corner of China into a world-beating semi-democratic megalopolis, with the distinctions between the city itself and its "Chinese" environs becoming ever harder to discern. No doubt it's silly to think of such a tiny region of such a massive country as leading the way towards a new Chinese paradigm. But not that silly.
    Source: www.lowtax.net/asp/story/front/New_Company_Record_In_Hong_Kong____61310.html


  • May 23, 2013   Hong Kong: won't diddle you

    Hong Kong has had another good week (all weeks seem to be good ones in the SAR), making sensible proposals to tidy up its investment advisory regime, and working towards an improved IP regime. Tax-efficient IP regimes are all the rage at present, and it is normally possible for a company to shelter its royalty and licensing income streams near completely from corporation tax by using preferential holding company structures and tax treaty networks. It's difficult to choose between Singapore (whose PIC incentive scheme is much used for IP licensing) and Hong Kong from this perspective; but the UK is now a player as well, with its new 10 percent Patent Box rate, and the Netherlands has an equally attractive regime. What is curious about the various competing regimes, which just seem to get better and better, is that they are a major BEPS technique, and some of the countries which are the most vociferous on that subject offer some of the most tempting IP opportunities. The dark arts of IP valuation offer useful techniques for reducing mainstream taxable profit, and those nameless companies which manage to pay just a few million pounds, euros or dollars of CIT while squirreling away billions of profits in low-tax havens have a large component of IP in their magic brew. This dichotomy is totally understood by the Finance Ministers of the G5, 7, 8 or 20 (take your pick) and they therefore know perfectly well that there is nothing they can do about BEPS except to wring out the maximum of political juice from the ongoing charade.
    Source: www.lowtax.net/asp/story/front/Hong_Kong_Consults_On_Investor_Regime_Enhancements_____60795.html


  • May 09, 2013   Hong Kong: in the money

    We shouldn't perhaps be congratulating Hong Kong for collecting a record amount of tax, but it represents the SAR's business success, while the amount of personal tax fell, not least because for yet another year the Government is giving back a slab of tax to individuals. Companies and regional headquarters continue to flood in, both from Mainland China itself, and from outside, as Hong Kong remains the most convenient and important gateway into the Middle Kingdom. Hong Kong feels its hegemony threatened by Singapore and Shanghai, in different ways, but this is a virtuous circle of competition: a game which all three locations are going to win.
    Source: www.lowtax.net/asp/story/front/Hong_Kong_Tax_Receipts_Hit_Annual_Record____60646.html


  • Jan 17, 2013   Hong Kong: on top of things as usual

    Top of the Heritage Foundation's freedoms list is, inevitably, Hong Kong, which definitely has had a good press this week, tweaking its tax system to encourage Islamic finance, strengthening its arbitration system, and cutting into its current deficit as it raced towards the end of 2012. One of Hong Kong's bull points for 2013 and onwards has to be its stock exchange. I will never succeed in remembering the difference between "A" shares, "B" shares and "H" shares and have to look it up every time ("A" shares owned by Chinese in China, "B" shares owned by foreign investors in China, "H" shares Chinese companies traded in Hong Kong) but it looks as if pretty soon I won't have to bother any more because they are all coalescing into regular Hang Sheng issues. That's to say that the Chinese authorities seem to be progressively giving up on attempts to rival Hong Kong on the Mainland. This is kind of collateral damage from the internationalization of the renminbi, which is now unstoppable. The internal markets made sense while Beijing's main preoccupation was the defence of the currency, but now they are pointless. Hong Kong is part of China, after all. Most other countries abandoned regional exchanges in favour of concentrating share trading activity in one liquid pool (London, New York, Paris, Frankfurt).
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_Again_Ranked_As_Worlds_Freest_Economy____59176.html


  • Nov 08, 2012   Hong Kong: leads the world

    No fog in Hong Kong, however, which remains transparently the best place to be if you are doing business in the region, and was nominated top world financial center for the second year running by the WEF. I don't lightly use the word 'transparently': one of the factors that helps Hong Kong to stay on top is its stock market, which has tried extremely hard to move from being a Victorian businessmens' club to having a fully open and well regulated listing regime. Just this week the authorities were fine-tuning their rules to 'ensure an orderly, informed and fair market'. It wasn't always thus, and some past major listings were very flawed, particularly those of the Mainland Chinese banks. But Hong Kong raised more company finance through IPOs last year than any other exchange, which is some sort of vote of confidence by investors. There are downsides to being in Hong Kong, notably the ridiculous real estate prices, and it's a very over-crowded place in general, but for most companies wanting a foot in the Chinese market, it's hard to avoid.
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_Remains_Worlds_Leading_Financial_Centre____58091.html


  • Nov 01, 2012   Hong Kong: being user-friendly

    I wasn't quite sure about it when Hong Kong introduced its Mandatory Provident Fund ten years ago or so, because I am seldom in favour of anything mandatory, other than cocktails before lunch, but doubtless I am wrong. If there is a country on the planet which doesn't force its citizens to save for their old age, then it doesn't come to mind, but perhaps there is some beknighted corner of Africa that would qualify. If people are stupid enough to get to retirement without savngs, then let them starve, would be my motto. That's what families and charities are for: it's no business of the State. But I am a lone voice crying in the wilderness, for sure. Anyway, the MPF exists, and Hong Kong gets a star for actually reducing the fees it charges its members. How many countries would do that?
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_Looks_To_Reduce_Pension_Fund_Fees____57980.html


  • Aug 09, 2012   Hong Kong: pay your taxes as you buy your rice

    So Hong Kong will allow various types of tax payment to be made through convenience stores. Good; and obvious, you would think. But it takes a liberal-minded, citizen-friendly government to think in that way. Compare with the UK or the USA, where innumerable government departments and death-defying volumes of paper are involved in even the simplest of transactions between citizen and government. The equivalent would be to imagine paying your income tax at Tesco Express or your local Walmart. That such a thing is possible in Hong Kong speaks to the simplicity of the tax system, which is itself partly a consequence of low tax rates, matched by willingness to pay on the part of citizens. In the 'advanced' countries (advancing towards collapse, that is) taxes are high, citizens are unwilling, and the system is complex. Go figure.
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_Makes_Tax_Payments_Easier____56618.html


  • Jul 19, 2012   Hong Kong: being business friendly

    Company law is a fairly dull subject, but nothing is more infuriating than having to negotiate your way through forests of ambiguous, bureaucratic legislation when trying to set up a new company, organize a takeover or issue shares. It's good for lawyers of course, but in the end even they should probably be in favour of simplicity, because if no-one wants to set up in your jurisdiction there won't be any work at all! Hong Kong is near the end of a comprehensive re-write of its companies law, which will considerably improve clarity and transparency. Not that the old law seems to have stopped new entrants from flooding in.
    Source: http://www.lowtax.net/asp/story/front/Hong_Kongs_New_Companies_Bill_Approved____56380.html


  • Jul 12, 2012   Hong Kong: helps the little people

    Hong Kong's microfinance scheme is the sort of bureacracy-lite support for small businesses that every country should have in place, especially at a time when banks won't lend because they are so busy shrinking their asset bases in order to minimize the amount of capital they have to raise to conform to new Basle, EU, Dodds-Frank etc guidelines. Government has no business interfering with banks, which should just be allowed to go bust when they want to (and then they wouldn't) but no-one is listening to that story at the moment, so at least we can try to replace their riskier functions with market-friendly solutions like microfinance. Whenever it has been tried, it has succeeded, so Hong Kong is going with the flow. People in the poverty trap through no fault of their own are just as entrepreneurial as you and me. In the West, such schemes usually involve incredible layers of bureacracy and oversight, which first of all turns people off, and secondly saps so much of their strength that they have no energy left to do the business.
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_Launches_Microfinance_Scheme____56200.html


  • Jul 05, 2012   Hong Kong: marches resolutely forward in lockstep with mainland China

    It has been a good week for one of the most successful international trading partnerships of the last 20 years. 'International' may not be quite the right word for trading between Mainland China and Hong Kong; but there is a border, there are different currencies, and very different legal systems. The Closer Economic Partnership Agreement flagged up its ninth enlargement, and the numbers, in terms of the volume of trade, are stunning. There were two other PRC/SAR moves forward this week, as well: the establishment of a Special Economic Zone in Shenzhen, and approval for ETFs on Mainland exchanges based on Hong Kong listings. Bizzarely, all this positive forward motion is being achieved at the same time as Hong Kong's new Chief Executive, widely rubbished by the SAR's intelligensia, is being installed. He is thought to be too pro-Beijing; but given that Beijing is so pro-Hong Kong, at least in economic matters, perhaps that's OK. The real issue, but it's still five years away, is Beijing's promise to allow Hong Kong universal suffrage, something they are going to find hard to deliver on if parallel progress is not made on the Mainland. Maybe they will claim to be using Hong Kong as an experimental laboratory, as they have done in other respects.
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_China_Sign_CEPA_Supplement_IX____56173.html


  • Jun 07, 2012   Hong Kong: takes home the bacon

    I don't know if awards count for encomiums; I mean, there could be an argument that they should only be given for actions, whereas an award is the result of lots of actions, rather than being an action itself. Anyway I'm giving a mark to Hong Kong, which won the 'world's most competitive economy' moniker this week for the nth time. Do countries have award cabinets full of silverware, like tennis players and boxers? I mean, do you get a cup when you are the most competitive nation? Otherwise, what's the point? Some people are more competitive than others and gloat over their medal cabinets. I won a silver corkscrew once playing tennis, but it broke soon afterwards. I'm just not competitive that way. But Hong Kong must be the most competitive nation on earth for competing in competiton competitions. Perhaps I can't take that any further!
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_Again_Top_In_World_Competitiveness_Rankings____55715.html


  • May 17, 2012   Hong Kong: abolishes a tax

    I can't think of the last time that Germany abolished a tax; but Hong Kong is at it all the time. This week it got rid of the duty levied on companies' capital issuances. When Hong Kong can't abolish a tax, it sometimes gives tax money back to citizens, as it has done for the last two years with income tax. Snipers will say that it's because it has such massive cash reserves that it can easily afford it: but the truth is that the cash reserves are a result of low taxes, not the other way around. It's probably predictable that Hong Kong is going to end up at the head of our rankings; but events will determine that, not me.
    Source: http://www.lowtax.net/asp/story/front/Hong_Kong_Abolishes_Corporate_Capital_Duty____55447.html



 

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