Primasia Corporate Services Limited: February 2012

Wednesday 15 February 2012

China Updates- 2011 Catalogue of Industries for Guiding Foreign Investment

The 2011 Catalogue of Industries for Guiding Foreign Investment will become effective on 30 January 2012, repealing and replacing the previous (2007) version.

Of most likely interest to foreign investors are the sectors which are being liberalised. For example,

Production of carbonated beverages, containers and fiscal cash registers.
Healthcare – the construction and operation of medical institutions.
Wholesale and retail – e.g. franchising.
Commodity auctions.
Financial leasing.

However, some business sectors have been added to the "restricted" category, subject to stricter requirements and approval procedures.

These include industries which apply old (environmentally unfriendly) technology (cf. tax incentives for environmentally friendly industries). In addition, foreign investors are now not permitted to construct and operate golf courses or villas, or to offer domestic postal services.

Further clarification is expected.

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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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John Barclay -Email
Teresa Tam - Email
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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

Friday 10 February 2012

Tax Transparency- Hong Kong’s position on double tax agreements

In January, a seminar was given by the IRD and the Global Forum on Tax Transparency, updating Hong Kong’s position on double tax agreements (DTAs).

Hong Kong has now signed 22 DTAs, most of them in 2010 and 2011, of which at least 14 will be in effect in or from 2012. The remainders are either still to be ratified or the implementation date is set for beyond

2012.

A key point made by the Global Forum speaker was that Hong Kong law does not currently permit the entering into of tax information exchange agreements (TIEAs). Thus, tax information exchange can only

take place through a DTA. This is likely to delay the signing of DTAs with, for example, the US, Australia and the Nordic countries, which have a preference for separate TIEAs.

Whilst Hong Kong has never been on the OECD/FATF tax blacklist, there is now some pressure on Hong Kong to amend its law on TIEAs (to allow them) so as not to appear a “freeloader” in the international tax system.

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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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