Tag Archives: Hong Kong

Hong Kong Promoted As Intellectual Property Trading Hub

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The Government has formulated an overall strategic framework for promoting Hong Kong as a premier intellectual property (IP) trading hub in the region.

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As determined by a working group, which conducted many rounds of stakeholder consultation over the past few months, Hong Kong’s overall strategy on IP trading encompasses four strategic areas – “namely, enhancing its IP protection regime; supporting IP creation and exploitation; fostering IP intermediary services and manpower capacity; and pursuing promotion, education and external collaboration efforts.”

Courtesy of  Paramount Pictures, Wiki Commons.

The working group will, in 2014, explore specific policies and other support measures under each strategic area for promoting Hong Kong as a regional IP trading hub. In the meantime, two sub-groups formed under the working group will continue to deliberate on ways to spearhead further developments in certain specific areas, focusing particularly on the more specialized subjects of IP valuation, and IP arbitration and mediation.

Some of the initiatives under way and in the pipeline include the setting up of the Original Grant Patent system as a strategic step to help Hong Kong develop as an innovation and technology hub; a review of copyright to strike a balance between its protection and the freedom of expression; and the launch by the Hong Kong Trade Development Council of an online IP trading portal in January 2014 to enhance Hong Kong’s online IP trading volume, capabilities and connections.

A survey on IP trading and manpower in Hong Kong will also be conducted in 2014 to provide statistical and other relevant information to support the working group’s further deliberations.

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Hong Kong Offer Tax Exemption to Hedge Funds

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In a media interview, Philip Tye, Chairman of the Hong Kong branch of the Alternative Investment Management Association, which represents the hedge fund industry, confirmed that the extended tax exemption proposed in his last Budget by Financial Secretary John Tsang should strengthen Hong Kong’s position as an international asset management center.

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Picture of Hong Kong by Samuel Louie, retouched by Carol Spears.

In an article on the website of the South China Morning Post, Tye said that “the proposed reform plans would now make Hong Kong more attractive for fund companies to domicile their funds here. This will create job opportunities and benefit the hedge fund industry as a whole.”

To attract more private equity funds in Hong Kong, Tsang’s proposal is to extend the profits tax exemption for offshore funds to include transactions directly in private companies that are incorporated or registered outside Hong Kong (for example in Mainland China) and do not hold any Hong Kong properties nor carry out any business in Hong Kong. That would allow private equity funds to enjoy the same tax exemption as offshore funds.

In addition, while, at present, investment funds established in Hong Kong can only take the form of trusts, the Government is considering legislative amendments to introduce the open-ended investment company into Hong Kong. That should also encourage more traditional mutual funds and hedge funds to domicile in Hong Kong.

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Hong Kong Again Ranked As World’s Freest Economy

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The World’s Freest Economy. Picture of Hong Kong by Jakub Halun

For the 19th consecutive year, Hong Kong maintained its position as the world’s freest economy, according to the 2013 Index of Economic Freedom, published annually by The Heritage Foundation.

Launched in 1995, the Index evaluates countries over 10 economic freedom factors – from property rights to entrepreneurship – grouped into four broad areas of economic freedom: rule of law; regulatory efficiency; limited government; and open markets. Based on its aggregate score, each of the 177 ranked countries was classified either as: “free” (i.e. combined scores of 80 or higher); “mostly free” (70-79.9); “moderately free” (60-69.9); “mostly unfree” (50-59.9); or “repressed” (under 50).

The top four in the index were unchanged. Hong Kong scored 89.3 on the 1-100 scale, which, although 0.6% lower than last year, still topped the 88 of Singapore, which, although 0.5% higher than 2012, ranked second, as it has for all 19 years. Australia and New Zealand ranked third and fourth, at 82.6 and 81.4 respectively, enabling the Asia-Pacific region to account for the four highest-ranked countries.

Switzerland took fifth place in the ranking (and continued to be the only “free” economy in the European region), with Canada finishing sixth, despite slipping a half point, and Chile seventh, moving more than half a point toward greater economic freedom. Mauritius, the only sub-Saharan country to rank among the top 10, was eighth with an overall score of 76.9. Denmark finished ninth, just ahead of the United States, which remains in tenth.

The US, with an economic freedom score of 76, lost ground again in the 2013 Index. Its score was 0.3 points lower than last year, with declines in monetary freedom, business freedom, labor freedom and fiscal freedom.

The world average score of 59.6 was only one-tenth of a point above the 2012 average. Since reaching a global peak in 2008, the Foundation noted that economic freedom has continued to stagnate. The overall trend for last year, however, was positive: Among the 177 countries ranked in the 2013 Index, scores improved for 91 countries and declined for 78.

“On the plus side, average government spending scores improved,” it added. “Unfortunately, this was matched by a decline in regulatory efficiency, as a number of countries hiked minimum wages and tightened control of labor markets.”

Hong Kong’s score was lower than 2012 due to increased government spending relative to gross domestic product and an increase in inflation. Among the 10 economic freedom factors assessed, Hong Kong maintained its top position in trade and financial freedom, remained second in investment freedom and property rights, and rose from third to second in business freedom.

Hong Kong’s Acting Financial Secretary Professor KC Chan welcomed Hong Kong’s highest ranking, noting that The Heritage Foundation complimented Hong Kong’s highly competitive regulatory regime “which, coupled with an efficient and transparent legal framework, sustains vibrant engagement in global trade and investment.”

As Hong Kong’s economic interaction with mainland China has got closer, and trade and financial linkages with the Mainland have grown significantly, The Heritage Foundation further complimented Hong Kong for continuing to demonstrate a high degree of economic resilience and remaining one of the world’s most competitive financial and business centers.

Chan confirmed the government is determined to uphold economic freedom in Hong Kong. “The government will continue to provide a business-friendly environment for firms to flourish, while establishing an appropriate regulatory regime to ensure the integrity and smooth functioning of the free market. We also strive to remove impediments to industries tapping into new markets,” he added.

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Singapore Tops Hong Kong as Residence for Mobile Rich in Asia

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Hotel guests are seen at the infinity pool at the SkyPark atop Marina Bay Sands in Singapore. Courtesy of photographer: Sam Kang Li/Bloomberg

According to Bloomberg news; Singapore topped Hong Kong as the most desired place in Asia for so-called mobile millionaires to reside, with quality of life cited as the main attraction, a RBC Wealth Management (RY)survey showed.

Almost a third of the millionaires in Asia who live, work or spend more than half their time outside their countries of origin prefer Singapore, while 24 percent pick Hong Kong, the second most popular in the region, RBC and The Economist Intelligence Unit said in a joint research report yesterday.

Singapore topped Hong Kong as the most desired place in Asia for so called mobile millionaires to reside, with quality of life cited as the main attraction, a RBC Wealth Management survey showed.

Real estate led the list of preferred assets for the internationally mobile wealthy, according to the survey, which showed 23 percent of those in Singapore reporting a “high propensity” for property investment, compared with 7 percent in North America. The island’s home prices climbed to a record in the third quarter, prompting the government to restrict home loans and cap property development. Eduardo Saverin, co-founder of Facebook Inc., moved to Singapore in 2009, and Jim Rogers, chairman of Rogers Holdings, relocated there in 2007.

“Singapore always has this quality as a safe haven, not just for your money, but also for your family,” said Wai Ho Leong, a senior regional economist at Barclays Plc in Singapore.

For mobile millionaires who moved to Singapore, 89 percent ranked quality of life as important and 83 percent cited the country’s political stability as important, the survey showed. Infrastructure and educational opportunity were also given as reasons to live there.

Most Millionaires

Singapore posted a 14 percent increase in millionaire households to 188,000 last year, when the Asia-Pacific region countered a decline in wealth in Western Europe and the U.S., according to a Boston Consulting Group report published May 31.

The proportion of millionaire homes in the city was 17 percent, the highest in the world, followed by Qatar and Kuwait, according to Boston Consulting Group. Singapore has a population of 5.3 million, of which about 2 million are foreigners.

“High net worth individuals with global outlooks for their businesses and families are choosing Singapore to live and invest in,” Barend Janssens, the Singapore-based head of RBC’s wealth-management unit for emerging markets, said in a statement.

The city-state is grappling with the elevated inflation that comes with years of economic growth and population expansion on an island smaller than New York City, with rising demand fueling record property and car prices.

Property Boom

In the three months ended Sept. 30, the island’s private residential property price index rose 0.6 percent to a record 208.2 points, according to government data. In prime districts, apartment prices gained 0.2 percent, compared with a 1 percent increase in the suburbs.

The Monetary Authority of Singapore told lenders on Oct. 5 to restrict home-loan maturities “to curb continued upward pressure on residential property prices,” in an attempt to avert a housing bubble. The government said in September it plans to cap the number of homes that can be developed in suburban projects as it seeks to curb the increasing trend of so-called shoebox apartments.

The cost of a permit to own a small car for 10 years rose to an unprecedented S$78,523 ($64,300) on Dec. 5 from S$46,889 at the start of the year. That excludes the cost of buying a car. The government auctions limited vehicle permits to control congestion and pollution.

“Only if you’re very young and highly qualified would you want to rough it out in Hong Kong for a few years,” Leong said. “But once you have kids, the pollution gets to you, the lack of greenery gets to you, the crowdedness gets to you.”

Doing Business

Hong Kong is the best place to do business, according to data compiled by Bloomberg. The city of about 7 million people secured the top position in an index based on six criteria including the degree of economic integration and labor costs. Singapore ranked ninth in the index published in March by Bloomberg Rankings.

Hong Kong acts as the gateway to China, the world’s most populous nation, with free-market policies and low corporate taxes.

“Hong Kong is a very big financial center in the region and in recent years has also benefited a lot from China opening up its markets,” said Frances Cheung, a Hong Kong-based strategist at Credit Agricole CIB. Hong Kong is “about the opportunities, especially in the financial world.”

The World Bank ranks Singapore and Hong Kong top in its gauge focused on the ease of doing business. The Washington- based Heritage Foundation has named Hong Kong the world’s freest economy for 18 successive years.

See the full article from Bloomberg here.

Global Tax Rates Comparison

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Hong Kong and Switzerland are attractive with relatively low effective tax rates. Many international corporations have relocated to these two countries the last decades.

The worst ones are Greece, Belgium and Italy. We expect both people and corporations to continue to flee these countries the coming years.

Click on the image to get a larger picture.

Source: Economist

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