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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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

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!

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

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- 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!

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

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- 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!

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

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- 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

(c) Equal pay provisions

(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!

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

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- 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.

(c) Clarifying directors’ duty of care

(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!

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

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