EXPERT INSIGHTS

'Offshore company' is no longer a strange term in China, but it is now a synonym for "tax-free". At present, China is also actively planning the construction of Shanghai into an international offshore financial center. There are already more than 60 tax planning areas around the world, but do they meet the business or commercial needs of the Chinese consumer? This is the issue that will be explored in this article. Rather than discussing the tax systems and policies of various regions, this article hopes to reveal the other functions of offshore companies in terms of commercial purposes. Mr. He...

EXPERT INSIGHTS 2020

The general functions of trusts, covering wealth inheritance, asset management and property protection, has been widely acknowledged and frequently used by high net worth individuals, families, private banks and family offices. However, trusts can also play a very important role for a company planning an initial public offering (IPO). The most common trust arrangement during the IPO process includes family asset arrangement for shareholders and equity incentive plans for employees. As for the shareholders' family property arrangement, the grantors, or the shareholders, usually care most about the security and controllability of their assets. That means the original shareholders should know...

EXPERT INSIGHTS 2020

The continued development of ETFs in Hong Kong is relatively stable and has been almost 12 years since the first ETF was launched. Currently, there are 79 listed ETFs, among which two were not traded in Hong Kong. The one with the most active trading is A50(2823) as some investors don't take a long-term position in the fund.  However, the Tracker Fund (2800) covers most of the Hang Seng Index components, allowing investors to buy into the entire Hong Kong market to diversify investment risks. Many investors choose to hold their positions in the long term. Apart from the QFII...

EXPERT INSIGHTS 2020

By Jeffrey CHEN, practicing lawyer in Shanghai1 China Overseas/Outbound Direct Investment (ODI) China outbound direct investment took off in the 2000s as a result of the government oing out policy, which aimed at making China the champion among international players.  Benefiting from a strong support of state and banks, more and more Chinese enterprises are looking overseas and joining the global competition. Almost all of the active investors in China have recognized that the global financial crisis has provided them with opportunities to expand their business and invest overseas at a lower cost. Despite the rapid growth of Chinese outbound...

EXPERT INSIGHTS 2020

By Zhao Xiao Hong. Chinese companies listed ashore are now facing a peculiar ordeal: were they to maintain their stance as a rising star among other players in the capital market or should they follow their inevitable course otherwise, and be downgraded into being someone else's short-selling tool. While the glory of a successful listing has yet to be fully enjoyed, these Chinese companies were already thrown to face harsh criticisms, auditors' resignations, questioned, dumped, delisted, and even sued. Today, a quick glance around the sidewalks of Wall Street, one will not be surprised to find, aggressive research institutions and...

EXPERT INSIGHTS 2020

By Wang Han Qi. Four years after coming into existence, Hong Kong's nascent market for renminbi-denominated bonds - a core plank in China's drive to internationalize its currency - has burst into life. The so-called dim sum bond market, named after the bite-size delicacies served in Hong Kong tea houses, has already seen more deals this year than in the whole of 2010.  Unilever, the European consumer group, and BYD, the Chinese carmaker backed by Warren Buffet, are among the issuers that have raised RMB funds in Hong Kong market through dim sum bonds since January. While the sums involved...

EXPERT INSIGHTS 2020

The great turn around for the goliath of international wealth management, UBS, continues to gather steam after its crisis ridden three-year period from the end of 2007 through to today. The Swiss giant reported its 2010 annual performance on March 15,2011 and, while serious creases in the business still exist to be ironed out, the bank current leadership has moved a long way to fulfilling their survive and reinvigorate mandate. The company wealth management business is now split in two Wealth Management and Swiss Bank and Wealth Management Americas. The former had total income of CHF7.4billion (US$8 billion) and expenses...

EXPERT INSIGHTS 2020

Steven Hao of Wisemove Tax Agency looks at individual income tax-related risks ontransferring individual equities held offshore by Chinese residents. Since China adopted its new enterprise Income tax law in 2008, taxation authorities have been increasingly focusing on supervision of taxable activities arising from the disposing of equities indomestic enterprises either via direct transfers or indirect transfers through intermediary "conduit companies.  Taxation authorities have so far mostly paid attention to overseas non-resident enterprises, while there has been little supervision of transfers of equities in overseas-incorporated enterprises owned by Chinese residents. That could change shortly though, Chinese taxation authorities have already...

EXPERT INSIGHTS 2020