HK and China sign Services Trade Agreement

On November 27, a new agreement aimed to extend the breadth and depth of services trade liberalization between Mainland China and Hong Kong was signed.

Under the agreement, Mainland China has committed to fully or partially open up over 150 sectors to the Hong Kong services industry. Together these account for 95.6% of all the WTO services trade sectors. In respect of “commercial presence,” national treatment will be applied to Hong Kong in 62 sectors.

Hong Kong will benefit from the Mainland’s most preferential liberalization measures. This is assured through the agreement’s Most-Favored Treatment provision, which specifies that any preferential treatment the Mainland accords to other countries or regions, if more preferential than those under the CEPA, will also be extended to Hong Kong.

The agreement came into force immediately, and will be implemented on June 1, 2016.

Filed under: Business and Economy, HK as a Financial Centre

HK adapts to international tax developments

Hong Kong’s Secretary for Financial Services and the Treasury, K C Chan, has emphasized that the Government is committed to complying with the latest international tax developments, including on tax transparency and tackling base erosion and profit shifting.

In his speech to the Taxation Institute of Hong Kong 2015 CTA Conference on November 20, Financial Services Secretary said: “For Hong Kong, as an international financial center, we can ill afford not to adapt to the rapidly evolving situation and catch up with the latest global developments.”

One of the major initiatives that the Government is currently addressing is the implementation of the international standard on the automatic exchange of financial account information as regards taxation. The territory has committed to commence the first automatic information exchanges by the end of 2018, providing the necessary domestic legislation is in place by 2017.

Filed under: HK as a Financial Centre, Taxation

HK explains its Free Trade Agreement Agenda

On November 4, Hong Kong’s Secretary for Commerce and Economic Development, Gregory So, discussed the territory’s free trade agreement strategy.

So stressed that the Government’s primary goal is entering into FTAs with its major services trading partners, as the services industry constitutes 93% of the city’s GDP (gross domestic product).

Hong Kong’s first trade treaty was signed with Mainland China, its largest services trading partner. Through the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA), signed in 2003 and has been supplemented 10 times, Hong Kong service suppliers can now access most services sectors in the Mainland.

Also, Hong Kong is actively participating in the Trade in Services Agreement (TISA) negotiations between 23 participating economies, which commenced in 2013. Of these participants, 8 are among the city’s 10 largest markets for services. Hong Kong’s exports of financial services and business services to them account for 80% and 70% of total exports, respectively.

So also pointed to the commencement of FTA negotiations with the Association of South East Asian Nations (ASEAN) in July 2014. Collectively, the 10 ASEAN member states are Hong Kong’s 4th-largest trading partner for services. The Government’s target is to conclude these negotiations in 2016.

So confirmed that the 3 trade deals will benefit 95% of Hong Kong’s trade flows in services.

After the conclusion of the FTA negotiations with ASEAN, the Government will seek to join the Regional Comprehensive Economic Partnership (RCEP), currently being negotiated between ASEAN and its 6 FTA partners – the Mainland, Japan, India, South Korea, Australia, and New Zealand.

Filed under: Business and Economy, HK as a Financial Centre, Hong Kong and China, International Business Environment