Hong Kong Updates- Hong Kong a "Super Jurisdiction"

Hong Kongers and frequent visitors to Hong Kong will be familiar with the famous Yung Kee goose restaurant, and the former will be aware of the long-running family dispute (as a result of which part of the family is asking for a winding up petition) over the running of the restaurant.

A key (no pun intended) preliminary question has been over whether Hong Kong courts have jurisdiction over the case as the ultimate holding company is a BVI company. The case went to Hong Kong’s Court of Final Appeal which this month delivered its judgement on this issue, deciding that Hong Kong does indeed have jurisdiction to hear the substantive case.

The Court’s reasoning was that there is "sufficient connection" with Hong Kong, the criteria being whether the petitioner would derive significant benefit from a winding-up order in Hong Kong even though the company is incorporated elsewhere, and whether it is just and equitable to wind up the company in Hong Kong after considering all the circumstances.

The decision is significant specifically in terms of the facts of the case, namely the “sufficient connection” including the presence of shareholders and directors in Hong Kong, but more importantly in general terms as it shows that the use of an offshore company to run a business in Hong Kong does not necessarily remove the jurisdiction of Hong Kong courts.

In more general terms still, this illustrates both the operation of the common law process and principles in Hong Kong, as well as Hong Kong’s robustness as a jurisdiction.

In this respect, Primasia Corporate Services Ltd. was pleased to be quoted in an article in the South China Morning Post this month (“Offshore Backlash A Boon For Hong Kong”) in which Hong Kong’s rule of law and smooth bureaucracy are mooted as a reason for Hong Kong’s rise, as a ‘super jurisdiction’, at the expense of offshore jurisdictions such as the BVI, Cayman and Singapore.

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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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Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

Hong Kong Updates

Taxation

The Inland Revenue (Amendment) (No.2) Ordinance 2015 has exempted specific types of offshore private equity funds from profits tax in Hong Kong. The purpose of this amendment is clearly to encourage more funds of various types to operate in Hong Kong and to strengthen Hong Kong as an international asset management hub.

Double Tax Agreement

The Italy/Hong Kong tax treaty will take effect in Hong Kong on 1 April 2016.

Employment

Section 30 of the Labour Tribunal Ordinance gives the Labour Tribunal the power to order a party to proceedings in front of it to provide security for the payment of an award that has been or may be made. In a welcome pro employer decision, this power has recently been exercised in favour of an employer, by requiring an ex-employee with a possibly frivolous claim to provide security before proceedings could commence.

Data Privacy

The Office of the Privacy Commissioner for Personal Data has upheld a complaint by a former employee that the collection of her fingerprint data for the purposes of accessing the employer’s offices and monitoring employee attendance was unnecessary and excessive. The basis of the decision was primarily that fingerprint data are unique to an individual and therefore of too personal a nature to justify their use in this way.

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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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Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

Primasia at InterSME Breakfast Seminar

Primasia was at the InterSME Breakfast Seminar- "How to Expand and Transform your SME into a Bigger Corporation" yesterday. The seminar was held at Conrad Hotel Hong Kong by Italian Chamber of Commerce and Danish Chamber of Commerce together with other chambers. 

The five speakers of the seminar were from different fields and industries, however, they have one thing in common which is they grew their business from SME size to a bigger corporation. The speakers were Sandeep Sekhri (Managing Director and Founder of Dining Concepts), Joshua Han Miller (CEO of OKAY.com), Giacomo Stoppa (General Manager of People&Projects Ltd), Stefano Bassanese (General Manager of Jean Louis David Hong Kong), and Manó Markovits (CEO of 3 P.M. Limited). They shared their success stories and their experiences in transforming their companies into a bigger company. 

It was a very inspiring seminar!

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Need more information?

Please contact:

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

China Updates- Real Estate

Real Estate

Rules governing foreign investment in real estate were relaxed, including lowering the equity to debt ratio, facilitation the obtaining of loans, and simplifying forex registration. The relaxations are clearly in response to current market conditions, on a needs must basis, and it should be remembered that, when it suits the government’s needs, tightening of the rules has taken place in the past and could take place again.

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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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Website: Primasia HK / Primasia China

LinkedIn: Primasia

--------------------------

Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

Hong Kong Updates- Taxation & Employment

Taxation

The Double Taxation Agreement (‘DTA’) between Hong Kong and Italy, which was signed in 2013, entered into force in August. The provisions of the DTA are effective in Hong Kong from the 2016-2017 year of assessment.

The DTA is based on the standard OECD model and represents a major step forward in tax relations between Italy and Hong Kong, Italy having previously (in recent years) treated Hong Kong as a tax haven with impact on Italian citizens’ willingness to do business in Hong Kong.

Employment

Hong Kong government committees are reviewing:

The possible need for standard contracts to include provisions for standard working hours. Even assuming agreement can be reached (employer’s and employees’ bodies are both involved in the discussions), the likelihood is that provisions would apply only to lower-paid workers;

A possible amendment to the Labour Ordinance to permit compulsory reinstatement of employees wrongfully dismissed. Currently, the employer’s agreement is required for this.

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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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Website: Primasia HK / Primasia China

LinkedIn: Primasia

--------------------------

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- Cyber-security & Law of Evidence

Cyber-security

China’s People’s Congress released (on 8th July) a first draft of a cyber-security law for public comment. The proposed law will be the first regulation in China exclusively devoted to information security and data privacy in cyberspace. The law is held out as an being important to bring China’s and information security and privacy regulation into line with the outside world although (inevitably?) the greatest focus internationally has been on its possible adverse impact on freedom of information and business confidentiality.

Less controversially, however, the proposed law addresses for the first time cross-border transfer of citizens’ personal data. Likewise, people are for the first time given the right to access, correct, and delete their personal information; and Article 36 requires a network operator to notify a user and to report to the relevant department of the State Council when a serious privacy breach occurs.

There is now an obligation on operators to store Chinese citizens’ personal data within mainland China, which will, at least in theory, present challenges to companies operating internationally who (for example) provide customer service from a jurisdiction other than the one where customers are located. However, there is provision for a system of security clearances to, effectively, give permission for such data transfer. 

Law of Evidence

The Supreme People’s Court has (on July 1st) issued guidelines for the use of precedent, which they call “model cases”. However, although the model case may be cited by the court in its judicial reasons, it cannot be used as the basis of its judgment, perhaps because China is a civil law jurisdiction.

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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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Website: Primasia HK / Primasia China

LinkedIn: Primasia

--------------------------

Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

Primasia at Hong Kong Economic & Trade Office Gala Dinner in Singapore

Primasia was at Hong Kong Economic & Trade Office Gala Dinner in Singapore on 24th July at Shangri-la Hotel. The dinner was celebrating HKETO 20 years of friendship and partnership with Singapore.

We were glad to be invited to this wonderful dinner.

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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

Primasia at AustCham Mix at Six

Primasia was glad to sponsor The Australian Chamber of Commerce in Hong Kong "Mix at Six" at Insomnia (LKF) on 23rd July. It was a great platform to mingle with the professionals.

Look forward to the next "Mix at Six". 

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Need more information?

Please contact:

John Barclay -Email

Teresa Tam - Email 

--------------------------

Follow us on:

Website: Primasia HK / Primasia China

LinkedIn: Primasia

--------------------------

Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong

Hong Kong Updates- Tax

Tax

• Italy has ratified the Hong Kong - Italy Income Tax Agreement of 2013;
• The exchange of notes to the Hong Kong - Japan Income Tax Agreement of 2010 entered into force.
• Hong Kong has ratified the Hong Kong - South Africa Income Tax Agreement.
• Hong Kong has also ratified the Hong Kong - United Arab Emirates Income Tax Agreement.

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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!

===================================================================

Need more information?
Please contact:
John Barclay -Email
Teresa Tam - Email 
--------------------------
Follow us on:
Website: Primasia HK / Primasia China
LinkedIn: Primasia
--------------------------
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- Intellectual Property & Internet

Intellectual Property

The State Administration for Industry and Commerce (SAIC) announced that the Provisions on Prohibition of Abuse of Intellectual Property, the final version of which was issued on 13th April, 2015, would come into effect on 1st August, 2015. This can be seen as the culmination of 7 years of IP reform in China, starting from the Intellectual Property Strategy Outline in 2008.

Very briefly, the Provisions strike a balance between IP protection and Anti-Monopolies Law, bringing in, for example, EC-type ‘safe harbour’ provisions (for example, a rebuttable presumption that an IPR agreement is unlikely to be anticompetitive).

This follows the issue on 1st April 2015, of a new draft of the fourth amendment of the PRC Patent Law (the “Draft Amendment”) by SIPO (the State Intellectual Property Office) for public comment. Key provisions include:

(i) Redefinition of “employee service inventions”, limiting these to only those made by an employee in execution of work assignments.

(ii) Extending industrial design protection to those for either the overall or the partialappearance of a product.

(iii) Improvements to the patent enforcement system, such as the beginnings of a disclosure system (China does not have a discovery process) where a patent holder has made best efforts to prove financial damage, introduction of punitive damages (recently imposed in the New Balance trademark case*), and the adoption of US-style safe harbour provisions for ISPs and OSPs.

*In the New Balance case, the US company sports footwear company was found not to have come to the court with clean hands and the damages against it on the appeal (which it lost) were therefore increased to punitive damages for its “bad faith”. It was not disputed that the sound translation of New Balance’s trademark had been registered and used by another company, but New Balance had opposed the mark back in 2007, but unsuccessfully, and then continued to use “its” mark in the knowledge that, as far as Chinese law was concerned, it belonged to someone else.

The legal position was very clear and the case should serve as textbook example to foreign companies of how not to approach trademark registration in China. The similar Michael Jordan case, now going to appeal in China may well have the same outcome, albeit without punitive damages.

The legal position was very clear and the case should serve as textbook example to foreign companies of how not to approach trademark registration in China. The similar Michael Jordan case, now going to appeal in China may well have the same outcome, albeit without punitive damages.

Internet

Following the rapid expansion of top level domain names (TLDs) by ICANN, the Chinese authorities have seen the need to impose greater control over domain names. In summary, a domain name can only be sold in the PRC if:

a. The registry that manages and controls the particular TLD of the domain name, has been approved and registered with the Ministry of Industry and Information Technology (MIIT); and

b. The registrar that sells and administers the domain name has been approved and registered with the MIIT.

This will mean a drastic restriction in the range of domain names that can be sold legitimately in the PRC domain name market. Most significantly, popular TLDs such as “.com”, “.net” and “.org” are not on the approved list and therefore cannot be sold in the PRC until they are approved by the MIIT.

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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!

===================================================================

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

Possible Obstacles for Foreign Companies Running Businesses in China

Doing business in China could be very challenging for Foreigners. Here are some possible obstacles that foreign companies may encounter due to Chinese legal system and cultural differences.

• Different regulations imposed on foreign companies running businesses in China by different government authorities at the country and regional levels: These regulations need to be fully understood to avoid breach of laws and regulations.

• Government authorities involved with the set-up and running of foreign businesses in China work very differently from those in other countries.

• There is no single step of company incorporation and business license application. In general, it takes two to four months to obtain all the approvals/certificates/licences on one application.

• There are complex taxation systems at state and local levels.

• There are differences in the working styles of Chinese government authorities and foreign companies.

• There are different perspectives on environmental, cultural and ethical issues, among others.

Through our China WFOE (offices in Shanghai, Beijing and Guangzhou), Primasia provides one-stop China set-up and supporting services, including payroll, tax, accounting and licence renewal. If you need further assistance, please contact US. 

==================================================================

Need more information?

Please contact:

John Barclay -Email

Teresa Tam - Email 

--------------------------

Follow us on:

Website: Primasia HK / Primasia China

LinkedIn: Primasia

--------------------------

Primasia Corporate Services Limited

Tel: +852 2882 2088

Suite 1106-08, 11/F., Tai Yau Building, No. 181 Johnston Road, Wanchai, Hong Kong