The Hong Kong government must examine its tax concessions to the funds industry to ensure that it is a diversified and competitive compared to its global rivals, financial secretary Paul Chan Mo-po said in a government blog this week.
“We must ensure that Hong Kong’s tax arrangements can compete with other asset management centres,” said Chan, pointing to the UK and Singapore as examples of jurisdictions that have introduced tax incentives to lure fund management companies.
Chan saw the imperative as being relatively pressing, adding, “If global asset managers start undertaking fund management activities in other jurisdictions, it will be hard for them to transfer their businesses to Hong Kong during a short period of time”.
As well as financial services in Hong Kong, mainland China is also signalling its intent to win back, or retain, foreign investment business as part of the country’s economic plan across the board as its traditional low-cost attraction to manufacturers has been eroded.
Hong Kong and mainland China fight back on foreign investment
Earlier this week, as reported, China responded to reports of the Trump administration’s efforts to attract investment by US companies back to the US by announcing the withdrawal of the requirements it demands of foreign investors that have been viewed as overly onerous.
It has done away with 1995 regulations that demanded that foreign companies set up a representative office in China before operating in the jurisdiction, a process that often meant many months of “complicated paperwork and formalities”, the South China Morning Post noted.
The news came in a statement put out by China’s Ministry of Commerce on Tuesday.