By Dezan Shira & Associates
Editor: Weining Hu
Hong Kong’s Financial Services and Treasury Bureau (FSTB) recently issued a consultation document on amending the Companies Ordinance law. If the amendment proposal is approved, companies incorporated in Hong Kong will need to identify their beneficial owners and register such information with the Hong Kong Companies Registrars.
This rule applies to all companies incorporated in Hong Kong, including those limited by shares, by guarantee, and unlimited companies. However, publicly listed companies will be exempted from the proposed requirements as the Securities and Futures Ordinance already have a stringent set of rules requiring listed companies to register their interests of shares.
By Harry Handley
China’s taste for wine is growing rapidly, and the country is set to overtake the UK to become the world’s second largest wine market by 2020, reaching a value of US$21 billion. According to VINEXPO research, the market is anticipated to grow by an average of seven percent each year over the next four years, with 6.1 billion liters of wine expected to be sold in 2020. Each year a growing percentage of the wine sold in China is being imported from abroad; last year this figure passed 10 percent for the first time.
Customs data shows that in 2016, 638 million liters of wine were imported into China, with a total value of US$2.4 billion – a year-on-year increase of 15 percent in volume and 16 percent in value. This growth is expected to continue, as popularity for imported wine filters down to China’s lower tier cities and wine consumption becomes a more common pastime.
China’s marine produce accounts for 9.5 percent of 2016 GDP
China’s State Oceanic Administration (SOA) has announced in a report that the country’s overall marine product has increased by 6.8 percent year-on-year to over RMB 7 trillion in 2016, making up 9.5 percent of China’s GDP last year. Value-added marine produce accounted for 54 percent of the overall industry, reaching RMB 3.84 trillion last year.
Meanwhile, the marine biopharmaceutical industry made significant growth last year, and coastal tourism has also been steadily expanding.
The report notes a decline in output and added value of offshore oil and gas from 2015, with challenges remaining for China’s maritime shipping industry, despite efforts towards structural optimization. However, China has completed numerous maritime projects, including the installation of offshore wind farms.
By Dezan Shira & Associates
Editor: Jake Liddle
In China, withholding tax (WHT) is levied on the income of foreign enterprises that do not have a physical establishment in China but provide services to China-based businesses. Any China-derived income arising from such a transaction between an overseas entity and a Chinese business is withheld by the China-based client, deducted from the gross income amount, and taxed by the Chinese tax authorities at a flat concessionary rate of 10 percent.
Thus, it is the responsibility of the China-based client to ensure the transfer of tax onto the tax bureau. If they fail to do so, or do not pass on the correct or relevant amount from an invoice, the local tax bureau will take up repayment with the China-based client, and not the overseas entity.
Our weekly round up of other news affecting foreign investors throughout Asia:
An Economic & Social Background to the Philippines 2017
The Philippines has, over the past few years, been playing a ‘catch up’ strategy, and is now among the leading economies within ASEAN. Despite its many problems, the economy and commercial sector remain on the rise and present significant opportunities for investment for those who know where to look.
India Is Hot! New IPO’s Are Massively Oversubscribed
A sign of the desire to get into the new Indian dynamic has manifested itself in the over-subscription of Indian IPOs. This is a time for entrepreneurs to get stuck in, and ride what promises to be an exciting ten years in making India both an Asian consumer tiger and the workshop of the world.
By Zolzaya Erdenebileg
Although the new Cybersecurity Law of China is due to come into effect June 1, many companies are still unclear about the specific terms of the law. Given the potentially high cost of non-compliance associated with the law, and the uncertain nature of the guidelines that the government will release, managers should review draft measures and monitor related developments to ensure that their business is prepared.
By Alexander Chipman Koty
On December 30, 2016, a court in China’s southwestern province of Guizhou ruled that a worker, known as Mr. Chen, was wrongfully dismissed for dressing as a man. The ruling represents a new landmark for LGBTQ+ rights in China. Although the decision did not address the transgender identity of Mr. Chen, who was born female but identifies as a male, the court deemed that the dismissal was unlawful.
The ruling follows a series of recent lawsuits regarding LGBTQ+ rights in China, including a male couple who unsuccessfully lobbied for marriage rights, a clinic that was punished for using shock therapy to make a man heterosexual, and a university student suing over textbooks describing homosexuality as abnormal behavior.
As awareness of LGBTQ+ issues in China rises, employers are facing newfound scrutiny over their treatment of sexual minorities. Employers have the opportunity to establish safe work environments for LGBTQ+ employees, and become leaders in China’s changing social climate. Doing so can boost office morale, increase work efficiency, and, most importantly, give opportunities to those too often suffering from discrimination.
By Weining Hu
On March 5, at the opening meeting of the National People’s Congress, China’s top legislature’s annual session, Premier Li Keqiang announced that China will accelerate research and development (R&D) in new and emerging industries, such as artificial intelligence (AI). It is the first time that China’s highest national meeting has included AI in the Government Work Report. The report’s singling out of AI indicates Beijing’s prioritization of the industry in its economic agenda, and therefore its determination to support its growth.
In recent years, China’s leadership has been increasingly thinking about how to ensure their competitive edge in the AI industry. The acceleration of China’s policy efforts to advance AI development began in 2014, when President Xi Jinping called for innovation and breakthroughs in science and technology, including AI, at the opening ceremony of the 17th Congress of the Chinese Academy of Sciences.