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Invest Hong Kong encourages Mainland companies to tap Hong Kong's CTC hub status

Invest Hong Kong (InvestHK) yesterday (October 21) took part in a seminar at the 8th China Overseas Investment Fair in Beijing, encouraging Mainland companies to establish corporate treasury centres in Hong Kong in view of the latest change on tax law.

Entitled "Hong Kong – Regional Hub for Corporate Treasury Centres (CTC) and New Opportunities for Mainland Enterprises", the seminar was jointly organised by InvestHK and China Overseas Development Association. Co-organisers included Hong Kong Monetary Authority, Beijing Municipal Commission of Commerce, the China Council for the Promotion of International Trade Beijing Sub-Council, and Beijing Federation of Industry and Commerce. The event was also supported by the National Development and Reform Commission.

The seminar began with remarks from Associate Director-General of Investment Promotion, Mr Francis Ho, and Former Director-General of Department of Utilisation of Foreign Capital and Overseas Investment, the National Development and Reform Commission, Mr Kong Linglong.

Highlighting Hong Kong’s development as the preferred CTC in Asia, Mr Ho said, "According to the Ministry of Commerce, there were nearly 3 500 Mainland companies investing in Hong Kong in 2015, with US$58.5 billion non-financial investment, an increase of nearly 30 times compared to 10 years ago. Moreover, the Belt and Road Initiative will reinforce Hong Kong’s role as the top fund-raising centre, which will add further appeal to our CTC status in Asia. To encourage a greater level of corporate treasury activities, the Hong Kong Special Administrative Region (HKSAR) Government recently amended the tax law to allow, under specific conditions, the deduction of interest expenses in calculating profits tax for the intra-group financing business of corporations, and reduce profit tax for specified treasury activities by 50%, to 8.25% for qualifying treasury centres.”

The Belt and Road Initiative means a bigger leverage for Mainland enterprises to go global. As business opportunities continue to grow, Mainland companies cope with a more complex environment under different currencies, regulatory and interest rate regimes. Therefore, a growing number of companies set up corporate treasury centres to raise capital, manage liquidity, risks and transactions, in order to simplify and centralise their treasury activities.

Executive Director (External) of the Hong Kong Monetary Authority, Mr Vincent Lee, talked about Hong Kong’s policy on CTC and how setting up CTCs can help them reap maximum benefits from China’s economic reform policy. He also gave further details about the advantages of setting up CTC in Hong Kong.

He said, “Hong Kong has a series of financial strengths. For instance, Hong Kong has the largest offshore Renminbi market with deep capital pool, a sound legal system, a favourable tax environment and an abundance of finance professionals. I therefore encourage Mainland enterprises to make good use of our latest change on tax law to establish their own CTCs in Hong Kong, which will help lower cost and lift effectiveness in management of capital flow.”

The seminar also has a panel discussion named “Advantages of Hong Kong as the regional hub for CTCs and experience sharing on carrying out corporate treasury activities in Hong Kong”. Speakers including Director and General Manager of CGNPC Huasheng Investment Limited, Mr Lu Gang; Executive Director, Global Corporates, Transaction Banking, Standard Chartered Bank (Hong Kong) Limited, Ms Nan Li; Partner, Tax, KPMG Advisory (China) Limited, Mr Michael Wong, talked about the benefit of setting up CTCs in Hong Kong, Hong Kong’s latest financial environment and financial services, the benefits of Hong Kong tax regime for Mainland companies doing business overseas and cross-border investment and capital planning via Hong Kong under the Belt and Road Initiative. The panel was moderated by Head of InvestHK’s North China Investment Promotion Unit, Mr Matt Hu.

About Invest Hong Kong

InvestHK is the department of the HKSAR Government established in July 2000 to attract foreign direct investment and support overseas and Mainland businesses to set up or expand in Hong Kong. It provides free advice and customised services to help businesses succeed in Hong Kong’s vibrant economy. For more information, please visit www.investhk.gov.hk.

22.10.2016


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