By Jake Liddle
In October 2016, Hong Kong’s government issued a consultation paper for implementing measures to counter base erosion and profit shifting (BEPS) in the region.
BEPS refers to tax planning strategies that exploit discrepancies in tax laws in order to shift profits to jurisdictions where there are lower tax rates, often tax havens. While some methods are illegal, many are not, and can disrupt domestic market competition and undermine taxation systems. Because of their reliance on income tax, BEPS is particularly relevant to developing countries. The Organization for Economic Co-operation and Development (OECD) and G20 countries have formed an ‘inclusive framework’, which implicates over 100 jurisdictions to cooperatively implement the OECD/G20 BEPS package, a tool that provides governments with the means to tackle BEPS on domestic and international levels.
Plan for promoting employment during the 13th Five Year Plan period
The State Council has issued a plan for promoting employment during the 13th Five Year Plan period, which clarifies the guiding ideas, basic principles, major objectives, key tasks, and guarantee measures for promoting employment. According to the plan, by 2020, the employment scale will be expanded, while employment quality will further improve. New job opportunities in cities and towns will exceed 50 million in total, and the registered unemployment rate nationwide in cities and towns will be brought down under five percent. Nine specific tasks, including building a new-type employment model under the sharing economy, implementation of an entrepreneurship and innovation talent introduction program, supporting migrant workers to return to home to carry out pilot programs of entrepreneurship, implementation of an entrepreneurship training program, a program to advance the development of human resources service industry, have been identified to meet the requirements of the plan.
By Dezan Shira & Associates
Dezan Shira & Associates have reported consistent China growth in their practice and “significant” growth in their non-China Asian operations during 2016.
Speaking following the firm’s Partners Meeting in Shanghai this past weekend, Chairman Chris Devonshire-Ellis said, “Overall China growth for 2016 resulted in an increase in revenues”, while Asia operations year on year growth saw a significant increase in Vietnam, Singapore, and a substantial increase for India.
Devonshire-Ellis stated that while the US$-RMB exchange rate was a challenge throughout the year, the firm’s growth in China remained steady. He said the firm serves as a barometer for foreign investment flows into China as it possesses several thousand clients, a 25-year-old history in China, and 12 regional offices in China.
Our weekly round up of other news affecting foreign investors throughout Asia:
Investing in the Philippines – What To Expect in 2017
A combination of tax reforms and increasing growth are making the Philippines an attractive destination for foreign investment. We examine the parameters.
India’s 2017 Budget – A Sober Initiative After A Heady 2016
Finance Minister Arun Jaitley consolidates, but benefits await for infrastructure developers.
By Tongyu Zhang
China’s State Council has issued a circular stating the government’s intentions to further open the economy and boost foreign investment. The circular is part of the effort to build China’s so-called “new open economic system”, with measures focusing on streamlining government administration, improving regulations, and reducing institutional transaction costs to create a favorable business environment for foreign investment. The circular is in keeping with the sentiment backed by President Xi Jinping, who has recently released statements defending globalization, and should be seen as a positive signal by the Chinese government to facilitate the opening-up of the economy.
While this infers a more accessible investment environment, complex global economic and political trends, in addition to China’s ongoing economic restructuring, may mean that foreign investors in China will face a challenging year filled with uncertainties. Furthermore, the circular does not set any concrete policies, but rather points to a general direction for the implementation of the measures, which may require some time to be realized.
The China City & Industry Report: A Guide for U.S. Exporters 2017, a new publication from U.S. Commercial Service, is now available through the Asia Briefing Publication Store for complimentary download. With content provided by the professionals at Dezan Shira & Associates and published by Asia Briefing, this 140 page guide provides a close look at 19 of China’s most commercially important cities and 16 of its best prospect industries for U.S. exporters, with focus on market demand, trade opportunities, and prospects for investors.
China tourism revenue surges over Lunar New Year holiday
This year’s Lunar New Year holiday period saw a total of RMB 423.3 billion spent on tourism, a 15.9 percent increase on last year according to the National Tourism Administration. Outbound tourism increased, with around 6.15 million overseas trips by Chinese nationals, up seven percent. Travel website Ctrip recorded over RMB 100 billion on outbound tourism. Tuniu.com, an online travel agency also reported a similar boom, generating around 48 percent of its holiday business from outbound tourism, with Southeast Asian countries proving the most popular destinations. This trend is fueled by greater numbers of residents from rural cities looking to holiday abroad.
By Dezan Shira & Associates
Editor: Zolzaya Erdenebileg
Foreign companies operating in China are increasingly finding themselves in the uncomfortable position of undergoing an internal investigation or encountering a potential labor dispute. According to national statistics released by China’s Supreme People’s Court (SPC), 2015 saw a sharp rise in labor disputes. New labor disputes, meaning disputes that arise during a contractual relationship between employee and employer, accepted by the Chinese courts totaled 483,311 – an increase of 25 percent from 2014. Labor service disputes, meaning disputes arising from “independent contractor” agreements with quasi-employment relationships, totaled 162,920 – an increase of 38.7 percent from 2014.