Transcript 投影片 1

Hong Kong as the
Preferred Platform for
Doing Business in China
Huen Wong
President
The Law Society of Hong Kong
www.hklawsoc.org.hk
Prague, Czech Republic
20 January 2011
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Hong Kong Attractiveness
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Well-established legal system
- under ‘One Country Two Systems’, the Hong Kong
legal system is separate and distinct from that of
Mainland China
- the Hong Kong common law system is widely accepted
by the international business community as reliable
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Independent Judiciary
•
Simple and low tax regime
•
Leading capital market and financial centre
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•
Regional trading hub with global connections
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Quality manpower and professional services
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Proximity to Mainland China
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Efficient government
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Corruption-free
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Free trade and free market economy
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Logistics centre with efficient transportation network
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Using the Hong Kong platform
to trade in Greater China
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•
Hong Kong is a preferred platform to trade and do
businesses in the Greater China
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Opportunities under Closer Economic Partnership
Arrangement ("CEPA") between Mainland China and
Hong Kong
•
–
Zero tariff for HK origin products exported to
Mainland China
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R&D facilities / Production of proprietary products
with high IP value in Hong Kong (effective IPR
protection regime)
Opportunities for tax planning
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• Hong Kong – a base for brand/merchandise licensing
business in China and the Asian region
• A hub for trading with Asia-9 Economies
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Hong Kong, Indonesia, Japan, Malaysia, Philippines,
Singapore, South Korea, Taiwan and Thailand
• Regional headquarters for exports of OEM, ODM or OBM
products from Mainland China to the world
• A Hong Kong base for overseeing your regional business
operations in Greater China and Asia
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Managing your ongoing
relationship with your equity
partners in Mainland China
through a joint venture
structure in Hong Kong
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•
Czech businesses investing directly in Mainland China
invariably face relationship problems with their local
equity partners. But, local partners are essential for
their business operations on the ground in Mainland
China
•
One common structure for relationship management is
to incorporate a joint venture with your Chinese equity
partners in Hong Kong, and to use this JV (HK Hold Co)
for setting up a Wholly Owned Foreign Enterprise
(“WOFE”) in Mainland China
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• For instance, managing JV relationship by
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appropriately drafted shareholders agreement
stock option plan
asset/business management agreement
providing for dispute resolution by arbitration
in Hong Kong
choosing Hong Kong as governing law, etc.
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Strategies for Domestic Sales
in China and Manufacturing
Processing for Exports
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• Domestic Sales of your manufactured products in
China
-
By using your HK Hold Co. to set up a WOFE
to operate your China factories for production
of your products.
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• For export of your products to the world
you may enter into OEM, ODM or OBM Processing
Agreement with China manufacturing processing
factories of your products for export to the world by
your HK Hold Co.
Hong Kong only taxes on profits arising from or
derived in Hong Kong. For manufacture processing in
Mainland China, there may be 50% deduction of the
usual profit tax rate of 16.5%
Generally, no customs duties for machineries and raw
materials imported to your processing factory in
Mainland China
• Obtaining trade and equipment financing from local Hong
Kong banks by your HK Hold Co.
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Hong Kong as a Gateway for
Chinese Outbound Investments
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• Hong Kong is an ideal platform for expanding
cross-border investment activities of the Mainland:
- familiarity with the investment and trading
environment globally and the trading and
investment in the Mainland
- excellent global commercial connectivity
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• In 2008, the total outward direct investment of the
Mainland amounted to over US$50 billion, out of
which Hong Kong was the largest recipient taking
up 69.1% (US$38.64 billion) of the total
investment flowing mainly to business servicing,
wholesale and retail industries.
No.
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Country (Region)
Hong Kong, China
South Africa
British Virgin Islands
Australia
Singapore
Cayman Islands
Macau, China
Kazakhstan
USA
Russia
Amount ﹝US$ billion﹞
38.64
4.808
2.104
1.892
1.551
1.524
0.643
0.496
0.462
0.395
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Managing contractual / commercial
disputes by arbitration in Hong Kong
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• Cross-border transactions invariably give rise to
contractual and commercial disputes. Czech companies
trading / investing in Mainland China may minimise the
risk of uncertainties in foreign law and foreign judicial
system; and the danger of home-town justice acting in
their disfavour by providing an appropriate arbitration
clause in the contract
• Dealing with your trading / investment partners in China,
it always works if you negotiate for a clause for arbitration
in Hong Kong, and a choice of Hong Kong law as the
governing law of contract
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• The arbitration law in Hong Kong has also been recently
reformed. Hong Kong now adopts a unitary regime of
arbitration on the basis of UNCITRAL Model Law for all
types of arbitration, abolishing the distinction between
domestic and international arbitrations
• The Model Law is widely accepted by many jurisdictions
around the world and is familiar to practitioners from civil
law as well as common law jurisdictions
• This further reinforces Hong Kong as a leading centre for
international arbitration and dispute resolution
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• With a Hong Kong arbitration clause, there are established regimes
under Hong Kong laws to protect your rights in case of disputes:
(1)
Stay of proceedings in the local Mainland Chinese court, thereby
minimising the danger of home-town justice
(2)
Appointment of arbitrator of your choice or by the President of the
Law Society of Hong Kong or by Hong Kong International
Arbitration Centre in case of deadlock of such appointment in the
absence of consent between the parties
(3)
Enforcement of Hong Kong arbitration awards against defendants
in Mainland China under the established reciprocal enforcement
arrangements between Hong Kong and Mainland China (same as
the New York Convention)
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• Under the Mainland Judgments (Reciprocal Enforcement)
Ordinance:
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by the choice of the parties, certain commercial
judgments by either the Mainland Chinese courts
or the Hong Kong courts may be enforced
reciprocally by the other court
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Thank you !
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