Regulations on Doing Business in Hong Kong

Transcription

1 Regulatios o Doig Busiess i Hog Kog Mr Amirali B. Nasir Vice-Presidet The Law Society of Hog Kog 29 Jue 2017 Copyright 2017 The Law Society of Hog Kog. All Rights Reserved.

2 Oe Coutry Two Systems Basic Law High degree of autoomy PRC laws do ot apply Hog Kog is a foudig member of WTO Member of Asia-Pacific Ecoomic Co-operatio 2

3 Free Ecoomy Free trade & free eterprise Little govermet iterferece Free import ad export of capital fuds Free repatriatio of fuds No foreig currecy regulatios USD 1 pegged at HK$ 7.8 3

4 Foreig Ivestmets laisser faire Etities foreig compaies Very few idustry restrictios Bakig braches Aviatio TV broadcastig ad Soud broadcastig (49% foreig owership) 4

5 Corporate vehicles Uicorporated vehicle sole proprietor Geeral Partership or Limited Partership Limited Liability Compay Foreig compay registered at HK Compaies Registry, Brach office or represetative office. 5

6 Registerig Compay Costitutio of Compay Articles of Associatio Compay ames ad restrictios. Form- details of directors, shareholders, secretary (must be idividual or HK Compay but ot sole director), share capital, registered office. Busiess registratio applicatio. Fees 24 hour o lie portal, (mobile (Compay Search) 6

7 Buyig a Busiess, busiess model Buy the shares- beware liabilities Buy the assets oly Joit veture Agets, distributers, frachise- o regulatios Pyramid sellig Prohibitio Ordiace (Cap 617) 7

8 Registratios Busiess registratio withi 1 moth (for limited Compay automatic) Opeig Bak accouts- KYC Madatory Providet Fud Employees Compesatio (ECC) Appropriate isurace, ECC Isurace, Third Party, Fire Loss, D& O Appoitig auditor Aual Retur to Compaies Registry 8

9 Simple Tax System Low headlie tax rates No capital gais tax No tax for o-hk profits No tax o divideds No death duty 9

10 Simple Tax System (cot d) No tax o iterest from bak deposits Specific tax exemptios (certai debt istrumets ad fuds) ad double taxatio agreemets Exchage of iformatio agreemets Simple ati-avoidace provisios No specific rules o trasfer pricig 10

11 Tax Salaries tax progressive rates 2-17% (15% max) Profits tax 16.5% icorporated (15% uicorporated) Stamp duty o sale of lad 1,5%-8.5% (over 21, 739,130) Stamp duty of teacy agreemets & Liceses.0.25% (1 yr) to 1% of average aual retal (3 yrs) Special Stamp Duty residetial property sold withi 36 moths 20%- 10% reducig Stamp duty of trasfer of shares 0.1% ($5 +0.2% iter vivos trasfer) {$5 o cotract ote} 11

12 Employmet Employmet Ordiace applies to all workers except family members workig i busiess ad merchat seame. No closed shop trade uios. Employees must be locals holdig HK idetity card No-local employees eed visa- local sposor required Miimum wage $34.5 per hour ( No prescribed hours- but oe day holiday. Basic miimum aual leave 7-14 days depedig o legth of service Madatory MPF 5% (over 30,000 $1,500 max) (erol withi 60 days) 12

13 Employmet (cot d) No social security paymets. Materity leave 10 weeks, Paterity leave 3 days 4/5 pay. Sick leave pay 4/5 (Max 120 paid days) Four Discrimiatio laws Sex discrimiatio Disability discrimiatio Family status Race discrimiatio Severace pay after 24 moths by redudacy Log severace pay after 5 years Probatio period Statutory Holidays i Hog Kog 13

14 Employmet - TERMINATION Probatio 1st moth o otice Probatio 2d moth owards 7 days otice Reewal cotract with 7 days termiatio clause 7 days otice Other reewal terms 1 moth otice Cotiuous cotract 7 day otice. Paymet i lieu of otice 14

15 Immigratio Visa o arrival- check from time to time. Visa applicatios for busiess busiess model- Good Educatio Backgroud, professioal abilities ad backgroud Workers eed to apply for visas through sposorship ad lack of availability of skills i Hog Kog (i.e. Polish ad Russia laguages skills)- Good educatioal backgroud Import from Polad US$80 millio, exports to Polad US$317 millio 15

16 Immigratio Arragemets for No-local Graduates (IANG) No-local graduates may apply uder the IANG to stay i Hog Kog for oe year to look for a job. Key requiremets iclude - Obtaied a udergraduate or higher qualificatio i a full-time locally-accredited local programme i Hog Kog Job offer ot required upo etry (for fresh graduates) withi 6 moths beyod that eed to apply. Job is at a level commoly take up by degree holders ad is remuerated at the market rate (for returig graduates) 16

17 Other Laws Ati- competitio law (Competitio Ordiace 2012) Ati-bribery ad corruptio laws (ICAC) FATCA CRS (Commo Respodig Stadard) Polad 1 May 2017 FATAF Ati- Moey lauderig No double tax treaty -as o tax iformatio exchage agreemet ca be siged i absece of available HK law to sig same (1st agreemet with USA i March 2014) 17

18 Itellectual Property Copyright Trademarks- from EU registered mark or separate Patets Desig Registratios Trade Secrets (udisclosed busiess secrets) Layout-Desig (Topography ) of Itegrated Circuits Plat Varieties Protectio (Plat Breeders Rights) Compay ames are ot protected (Passig off actio may fail) 18

19 Patet A stadard patet applicatio i Hog Kog, Chia is made i two stages by filig: a request to record a desigated patet applicatio (stage 1) a request for registratio ad grat (stage 2). 19

20 Registered Desig Appearace of product (e.g.: Orage juice extractor) A applicatio for registratio of the desig. a represetatio of the desig suitable for reproductio. applicat's ame ad address. fees. 20

21 Copyright Copyright Ordiace ad commo law Right to origial ower (literary ad other works) No formalities required Works of authors from ay place i the world, or works first published aywhere i the world, also qualify for copyright protectio i Hog Kog. (through ratificatio of iteratioal covetios) Civil sactios ad crimial (Customs ad Excise Departmet eforce) Parallel imports beware. 21

22 Copyright (cot d) Distictive Descriptive of goods ad services Well kow term i your lie of busiess (difficult) Similar trademarks to others (difficult) 22

23 Notarizatio Polish Cosulate i Hog Kog Polad is sigatory to Hague Covetio- documets ca be otarised ad a apostille applied for recogitio i Hog Kog. Hog Kog Notary ca sig ad apostille affixed for use i Polad. 23

24 Etertaimet Dacha Restaurat Russia cuisie Hire a juk boat ad see the islads Go hikig 24

25 Platform to Chia No exchage cotrol; availability of professioal support; depth of capital ad fiacial markets; coveiet time zoe Co-operatio ad itegratio with Mailad Chia Closer ecoomic partership arragemet (CEPA) Pioeer i offshore Remibi (RMB) busiess 25

26 CEPA Siged i Jue 2003 ad effective o 1 Jauary 2004 Easier access to Mailad Chia markets for Hog Kog made products ad Hog Kog based compaies i various service sectors Removal of tariffs ad trade barriers i goods Opeig up of the Mailad Chia market to Hog Kog service suppliers Promotio of trade ad ivestmet Mutual recogitio of professioal qualificatios ad closer cooperatio i trade ad ivestmet Evolvig agreemet o further cocessios 26

27 Access to Capital Hog Kog Stock Exchage global rakig (per market cap Jue 2016) NYSE Euroext US (Nasdaq OMX) Japa (Tokyo + Osaka) Shaghai UK (LSE / Borsa Italiaa) Europe (Euroext) Shezhe Hog Kog Chia/HK market cap Jue 2016 raked o.2 27

28 Access to Capital (cot d) Use of foreig compaies: acceptable jurisdictios for listig Brazil, BVI, Delaware, Idia, Japa, Russia, Korea etc. etc. List ot closed Accoutig stadards Ø Ø Aligmet with iteratioal fiacial reportig stadards Flexibility: Chia accoutig stadards for busiess eterprises also acceptable; others (e.g. dual primary listig HSBC; secodary listig (US ad Caadia GAAP); list ot closed 28

29 Access to Credit ad Miority Protectio World Bak s rakig comparable Stregth of legal rights idex (HK:8; Polad:7) Depth of credit iformatio idex (Polad:8; HK:7) Foreig compaies miority protectio Miority protectio World Bak s rakig (HK:1; Polad:49 out of 189 ecoomies) Ø Ø Class actio Cotigecy fees 29

30 Corruptio ad Data Protectio Extra-territorial effect (FCPA etc) Keepig data off-shore Employmet Secodmet to Mailad Chia 30

31 Questio 1 Seekig redress agaist busiess parters i Chia i case of violatio of terms of cotract? PRC law of cotract is differet from HK Cotract law. Look at the Jurisdictio provisio Arbitratio Provisio 31

32 Questio 2 Cost-free verificatio of credibility of busiess parters i Hog Kog? Compay search beware BVI compay with limited" Busiess registratio search Judiciary website o cases agaist compay Liquidatio search Lad search Geeral Chamber of Commerce Bakers Website search 32

33 Questio 3 Dealig with risk coected with paymet (by Letters of Credit) to third coutries - tax heaves (British Virgi islad, Caymas, etc.), where goods are set from Chia/Hog Kog, supplier is from Chia/Hog Kog ad data o pro-forma ivoice idicates the metioed tax heave? I Hog Kog it is commo to use a BVI compay Letters of credit are o documets ad focus should be o documets 33

34 WE LOOK FORWARD TO SEEING YOU IN HONG KONG