Primasia Corporate Services Limited: 2012

Friday, 14 December 2012

China Updates- Tightening up of Labour Outsourcing

Tightening up of Labour Outsourcing (“Labour Dispatch”)

New rules in November 2012, but with retroactive effect, include the following provisions where companies use outside companies to provide labour:

(i) Limitations on the scope of positions

(ii) Increase in capital requirements for outsource (“dispatch” companies)

(iii) Protection of employees - “equal pay for equal work”

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Need more information?
Please contact:
John Barclay -Email
Teresa Tam - Email
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LinkedIn: Primasia
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Primasia Corporate Services Limited
Tel: +852 2882 2088
Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

China Updates- New Rules on Equity Contributions

New Rules on Equity Contributions

The Ministry of Commerce in China (MOFCOM) published new provisions on equity contributions for Foreign Invested Entities (FIEs). These came into force in October 2012 following 18 months of public discussions. These provisions provide foreign investors with more flexibility in structuring

or restructuring their businesses in China.

Key Points.

(i) Contribution with equity is applicable in (inter alia) the following common situations:

incorporation of a new FIE
increase of capital to change the equity structure of an FIE.

(ii) The equity used must be free from any encumbrances.

(iii) The equity used is subject to valuation by a PRC-licensed valuer.

(iv) The aggregate value of contribution with equity and othernon-monetary contributions made by all shareholders is limited to 70% of the total registered capital of the Invested Entity.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Thursday, 13 December 2012

Hong Kong Updates- Revision of Trust Law

Revision of Trust Law

The Financial Services and Treasury Bureau has recently published the consultation conclusions on the detailed legislative proposals on the trust law reform. We will report in detail on this is a later newsletter, but we expect Hong Kong to become a more attractive jurisdiction for estate planning as a result of the reforms.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Friday, 30 November 2012

Hong Kong Updates- Employment

Employment

The long-running Cathay Pacific case has finally reached and been decided on by the Court of Final Appeal (CFA).There are two parts to the decision – firstly, clarification of the formula for calculating statutory holiday and annual leave pay under the old (preamendment) Employment Ordinance (EO). But, more importantly, the question was decided of which leave days are included in the calculation according to the statutory formula where payment is made in lieu of the leave being taken.

This affects a large proportion of employers, as the EO prescribes only 7 days’ annual leave and many employers (particularly employers which are foreign-owned) grant more than 7 days annual leave to their employees.

Hong Kong Updates- Stamp Duty

Stamp Duty

The big news in October, at least for Hong Kong residents, was the increase in Buyer’s Stamp Duty (BSD) for non-Hong Kong Permanent Residents, designed to reduce distortions (or to introduce one, depending on your point of view) in the Hong Kong property market and to ease the pressure on the price of accommodation for permanent residents. The BSD is 15% of the price (or value, whichever is higher) and, unlike the existing stamp duty, payable jointly and severally by buyer and seller, is payable by the buyer only.

A number of questions have come up about ways to avoid the BSD, but the government’s immediate response to one such suggestion – to move a property to a subsidiary and for the shares in the subsidiary then to be sold – elicited a swift and clear response that that scheme at least would escape BSD.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Tuesday, 30 October 2012

Hong Kong Updates- Personal Data (Privacy) Amendment Ordinance

The Personal Data (Privacy) Amendment Ordinance enters into force on 1st October 2012. One aspect which has received little attention so far, but which impacts service providers, (e.g. of payroll support or IT services), in Hong Kong like ourselves is the obligation on the part of the original data user (i.e. the employer) when engaging service providers.

The new definition of data user includes, for example, payroll service providers, IT consultants and so on. In other words, agents are now defined as data users.

Previously, (i.e. before the new Ordinance), a data user was generally liable for the acts of the agents it engaged. There was no escape route for the data user from the wrongful acts of its agent.

Under the new Ordinance, there are express requirements for a data user to ensure its agents are in compliance with the Data Protection Principles (DPPs) through “contractual or other means” to prevent, for example, unauthorised access to or transfer of data wherever the data processor is based (i.e. it is not restricted to Hong Kong). However, although there is still no escape route for the original data user from his obligations, the agent (such as the payroll provider) can now also be liable to any individual for loss or misuse of data. A data user may also (recommended by the Privacy Commissioner) require a contractual indemnity from the agent for any such breaches thereby giving himself an effective escape from the DPPs.

Furthermore, a data user should have a reasonable defence under the new legislation if it can demonstrate that it has taken all reasonably practicable steps to ensure it complies with such requirements by carefully selecting reputable data processor such as Primasia Corporate Services Limited as its service provider and by including the necessary safeguards in its contract with the provider.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Friday, 28 September 2012

Hong Kong Updates- Trade Descriptions Ordinance

Amendments have been passed to the Trade Descriptions Ordinance.These amendments will be effective in 2013 and include:

i. Expanded definition of a trade description, to include such items as availability of what is being offered.

ii. Bringing services into the scope of the legislation.

iii. Including “misleading omissions” as an as well as outright dishonest practices, such as bait-and-switch, or so-called “bait advertising”, or even merely overly aggressive practices.

iv. In our own industry, we believe such practices would include quoting a low headline fee for provision of a Hong Kong company secretary, without mentioning additional fees for other annual duties of a company secretary, such as preparation and filing of the Annual Return, preparation of the AGM, and forwarding of official correspondence, e.g. from the IRD.

Primasia Corporate Services Ltd. is pleased to confirm that our charges for company secretarial and other services have always been fully compliant with the proposed law, and are completely transparent.

v. Factors to be considered in determining whether there is any offence include any exploitation of the

consumer's circumstance, such as (in our view) unfamiliarity with Hong Kong, as is usually the case when a potential investor is considering setting up in Hong Kong.

vi. The offences will be applicable to a trading practice targeting consumers outside Hong Kong if the trader is physically in Hong Kong or has Hong Kong as its usual place of business.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Wednesday, 29 August 2012

China Updates- Foreign Exchange

The State Administration of Foreign Exchange of the PRC (SAFE) has issued a notice allowing Chinese domestic companies to use foreign currency loans obtained from domestic banks to fund offshore subsidiaries. Previously, such companies could only use their foreign currency reserves, foreign currency purchased with RMB or foreign currency pools approved by SAFE to fund offshore subsidiaries.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Thursday, 23 August 2012

China Updates- Labour Law

Draft amendments for discussion include the following provisions to improve protection of workers. (Some employers have been abusing the use of labour outsourcing services.)

(a) Stricter restrictions in use of labour outsourcing services (restrict to genuinely temporary arrangements)

(b) Stricter requirements (such as higher capital requirements) for labour outsourcing service providers

(d) Tougher penalties

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Hong Kong Updates- New Companies Ordinance

New Companies Ordinance passed on 12th July

Key points include:

(a) Abolition of par value for shares

(b) Restricting corporate directorships of private companies: each private company will be required to have at least one director who is a natural person, to enhance transparency and accountability. A grace period of six months from the commencement date of the new ordinance will be given.

(e) Strengthening enforcement: lower threshold for prosecution and a new definition of “responsible person” (who can be prosecuted).

(f) Simplified reporting for companies that meet specified size criteria

(g) Strengthening of auditors’ rights to require a wider range of persons to provide information or explanations.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Wednesday, 25 July 2012

China Updates- Personal Tax

Personal tax

A State Administration of Taxation notice issued in June allows for preferential individual income tax treatment for Hong Kong and Macau residents working in China. This may in include time apportionment of salary income.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Tuesday, 24 July 2012

Hong Kong Updates- Tax

Tax

The Court of Appeal confirmed that unrealised gains are not chargeable to profits tax (under Section 14 of the Inland Revenue Ordinance).

New legislation:

(i) The Competition Bill received its final reading in LegCo and will become law, largely unchanged. It includes two ‘Conduct Rules’, which prohibit (1) agreements and behaviour which restrict competiton in Hong Kong and (2) abuse of substantial market power with the same effect. Fines (amongst other penalties) can be up to 10% of the turnover of the group of which the offending company is a part.

(ii) The Mediation Ordinance which aims to encourage mediation for the resolution of disputes in Hong Kong enhancing existing rules requiring arbitration to be attempted prior to commencing court proceedings.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Friday, 29 June 2012

China Updates- Protection of female employees

New rules (the “New Provisions”) on protection of female employees have been introduced. These cover the following areas:

Prohibited work for female employees – now divided into four categories as: "under normal conditions", "during pregnancy", "during the nursing period" and "during the menstrual period". More types of work have

been classified as "prohibited", such as work in confined spaces (for pregnant employees).

Maternity leave has been extended from 90 days to 98 days.
Maternity benefits have been redefined.
Sexual harassment provisions - employers must take precautionsto safeguard female employees from sexual harassment in theworkplace. This provision is a general one and more detailed rules are expected soon.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Monday, 25 June 2012

Hong Kong Updates- Companies Registry

Capital duty

The Companies Registry has announced that capital duty on the share capital of Hong Kong companies is abolished with effect from 1st June. This means that Hong Kong companies may incorporate with higher share capital without incurring this duty. Previously, most private companies in Hong Kong have been incorporated with a standard share capital of HK$10,000, which attracted minimal capital duty.

Electronic form submission

The Companies Registry has uploaded the requisite form to allow electronic submission of annual returns of local private companies having a share capital. In addition, 6 further forms have now been digitalised to allow electronic submission, including those for returns of allotments, notification of increase in nominal share capital and those relating to reserve directors.

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Thursday, 31 May 2012

China Updates- Employment Contract Law

A foreign national’s severance claim has been upheld under the Employment Contract Law (ECL) by a Shanghai court. Thus, the general employment law has been applied to foreign nationals rather than only, indeed in preference to, the separate national regulations on employment of foreigners. The decision by the Shanghai Jing’an District People’s Court in April 2010 was based on the principle that the ECL did not exclude foreigners and hence should be applied to them, assertions of freedom of contract notwithstanding .

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Primasia will post the updates of Hong Kong and China from time to time. Follow us on our Website/ Blogger/ LinkedIn and stay tunned for our updates!

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Friday, 14 December 2012

Thursday, 13 December 2012

Friday, 30 November 2012

Thursday, 22 November 2012

Tuesday, 30 October 2012

Friday, 28 September 2012

Wednesday, 29 August 2012

Thursday, 23 August 2012

Wednesday, 25 July 2012

Tuesday, 24 July 2012

Friday, 29 June 2012

Monday, 25 June 2012

Thursday, 31 May 2012