Hong Kong is world’s 3rd top financial centres

According to the latest biannual Global Financial Centers Index (GFCI), Kong is number 3 in worldwide as as the top financial centre.

London retained its place as the top financial centre. It is followed by New York. Hong Kong is placed 3rd and followed by Singapore.

The Global Financial Centres Index is a ranking of the competitiveness of financial centres based on over 26 000 financial centre assessments from an online questionnaire together with over 80 indices from organisations such as the World Bank, the OECD and the Economist Intelligence Unit. It is compiled and published twice a year.

Filed under: HK as a Financial Centre

HK Insurance Industry Grows

While the results are awaited of the public consultation on amendments to the Insurance Companies Ordinance (ICO) for the establishment of an Independent Insurance Authority (IIA), provisional statistics has already been released.

The provisional data shows that the total gross premiums of the Hong Kong insurance industry in 2012 amounted to HK$ 255.2 billion (USD 32.9 billion), which is an increase of 13% over 2011.

In particular, the total amount of revenue premiums of long-term in-force business was USD 215.9 billion in 2012, also showing a 13% increase over 2011. Revenue premiums of individual life and annuity (non-linked) business and individual life and annuity (linked) business increased by 16.1% to HK$ 146.4 billion and by 2.8% to HK$ 49.9 billion respectively.

Contributions of retirement scheme business grew by 21.4% to HK$ 16.7 billion in 2012, while new office premiums (excluding retirement scheme business) of long-term business increased by 10.4% to HK$ 77.8 billion compared with 2011. Of that total, in respect of policies issued to Mainland Chinese visitors, new office premiums amounted to HK$ 9.9 billion.

In 2012, gross and net premiums of general insurance business recorded growth of 13.2% to HK$ 39.3 billion and 13.5% to HK$ 27 billion respectively over 2011. But overall underwriting profit declined from HK$ 3 billion in 2011 to HK$ 2.2 billion in 2012.

On direct business, gross and net premiums increased by 13.1% and 13.6% respectively in 2012 over 2011, mainly driven by general liability business; while the underwriting profit of that direct business decreased.

As regards reinsurance inward business, gross and net premiums increased from HK$ 9.1 billion to HK$ 10.3 billion and from HK$ 5 billion to HK$ 5.7 billion respectively in 2012 compared with 2011. Nevertheless, the underwriting profit dropped almost twice to HK$ 590 million, mainly due to adverse claims experience.

The 2012 statistics were released by the Office of the Commissioner of Insurance. It is expected to be replaced in 2015 by the IIA, in line with the international practice for financial regulators to be independent of the Government operationally and financially.

Filed under: Business and Economy, Financial statistics

Hong Kong-Mexico Double Tax Agreement In Force

The Agreement on the Avoidance of Double Taxation between Hong Kong and Mexico entered into force on March 7, 2013, following the completion of both territories’ domestic ratification procedures.

This DTA between Hong Kong and Mexico was signed on June 18, 2012.

According to the text of the agreement, the pact will be effective for profits tax, salaries tax and property tax in Hong Kong for any year of assessment beginning on or after April 1, 2014, and from January 1, 2014, in Mexico for federal income tax and business flat-rate tax.

The text of the document provides for lower rates of withholding taxes in the contracting state in which the income is derived, in respect of dividends, interest and royalties.

The agreement ncludes provisions for the exchange of tax information in line with the Organization for Economic Cooperation and Development’s (OECD) standard, to allow the 2 parties’ tax authorities to share data to support investigations into fiscal crime on request.

Filed under: Offshore Legislation, Taxation