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1. INTRODUCTION

ong Kong is an appealing place to do business and a leading international trading and service hub, ranked as the world’s freest economy for over a decade. Hong Kong is a highly value-added manufacturing base in the world and a gateway to investment, supporting around a third of the foreign capital that flows into China. According to World Bank Doing Business Survey, Hong Kong is ranked third in terms of ease of doing business in the world.

Hong Kong is an exceptional place with prominent location on China's southern coast with one of the world’s highest GDP per capita.

Currently enjoying the status as Special Administrative Region of China, Hong Kong is former British colony with an extraordinary culture. With Ancient Chinese heritage and influencing experience of Western and colonial period, Hong Kong is a versatile city where English and Cantonese exist side by side.

Hong Kong is in five hours’ flight accessibility from most major cities of the world (comprising around half of the world’s population) and is well- connected by ferries and trains along with other efficient and affordable public transportation network.

As a global commercial and financial hub, Hong Kong welcomes people from all backgrounds with no discrimination. Everyone enjoys equal access to the outstanding public health system, freedom of expression, and exceptional municipal facilities.

Hong Kong have consular offices of various nations which help and provide

assistance to foreign people in case of any difficulties.

Besides its stunning modern skylines, excellent telecommunications, transportations and public healthcare facilities, the cost of living in Hong Kong is considerably less than many nations in North America or Europe. Moreover, students also enjoy great discounts on essentials such as transportations, arts and cultural events.

The Government has been encouraging a market driven economy with minimal government interference policy. It provides world famous healthcare structure with constant emergency and medical services. Unrestricted & free Wi-Fi services are widespread in the City with many Wi- Fi hotspots. It has a very low crime rate as compared to other countries in the world.

Hong Kong is the Asia’s second largest and the world’s third largest Foreign Direct Investment recipient with Hong Kong Dollar as the official currency. Its exchange rate has been constant from past 30 years at about HKD 7.8 to USD 1.

ATMs are available everywhere in the City with no or less restrictions for outsiders to open bank accounts.

Although the Government of Hong Kong exercises minimum intervention policy towards business and industry territory regulation, investors still need to be cautious & aware of regulatory attributes relating to diverse sectors.

This guide proposes an overview of the key features of Hong Kong as a potential location for your business.

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2. ESTABLISHING AN ENTITY

n Hong Kong, company may be formed either by guarantee or limited by shares or unlimited.

A company limited by shares can be a public or a private. A subsidiary company is usually limited by shares. Establishing a business in Hong Kong can be in following ways:

2.1 SOLE PROPRIETORSHIP

There is no legal restriction for registration or institution of sole proprietorship except business registration compliance.

2.2 PARTNERSHIP

The Partnership Ordinance governs unlimited and general partnerships in Hong Kong. All partners are individually and jointly liable under general partnership without limit of obligation and debts. Under the limited partnership ordinance, a limited partnership in which liability of at least one of the partners must remain unlimited, can be registered with the Registrar of Companies.

2.3 LIMITED COMPANY

According to the provision of the Companies Ordinance, limited companies may be either public or private companies which is either limited by guarantee or by shares. The liability of the members of a company limited by guarantee is to the amount of guarantee and in a company limited by share capital, liability of members for the company debts is limited to the issued share capital.

2.4 BRANCH OR REPRESENTATIVE OFFICE

For establishing a place of business in Hong Kong, every overseas company is required to register as per the Companies Ordinance. A place of business may include any place used by the company to transact or manage any of its business, which creates legal obligations. In case, the office at Hong Kong has only a liaison function, a representative office under the Business Registration Ordinance can be registered.

2.5 REGISTRATION OF A NEW COMPANY

There are various stages involved in registration of a company in Hong Kong which are as follows:

2.5.1 STAGE 1 – NAME & TYPE OF A COMPANY

A company name that may infringe the intellectual property rights of any third party is not allowed to be adopted. Any kind of infringement of the IPR of other party may invite criminal or civil sanctions moreover in Hong Kong or anywhere else. This can be confirmed by conducting a search in the Trademark Register maintained by the Intellectual Property Department.

Type of companies:

• Company limited by shares – Members’

liability is limited by the articles of association to the amount due on the shares held by them.

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• Company limited by guarantee - Members’ liability is not limited by the articles of association to the amount that the members undertake respectively to contribute to the assets of the company in the occurrence of its winding up. Non- profit-making organizations are mostly registered under this category.

Choose a distinctive name for the company which should not be same as name appearing in the index of company names preserved by the Registrar of Companies.

2.5.2 STAGE 2 – SUBMITTING AN APPLICATION

An application for incorporation must be submitted with following documents and prescribed fees. This procedure can be done either electronically through "e-Registry" or “CR e-Filing” or manually in hard copy format.

• Incorporation Form – Form NNC1 (for company limited by shares) and Form NNC1G (for company not limited by shares);

• A copy of the company's Articles of Association; and

• Notice to Business Registration Office (IRBR1).

2.5.3 STAGE 3 – COLLECTING CERTIFICATES

If the application for incorporation is permitted, applicant can download or can take manually the Certificate of Incorporation and Certificate of Business Registration. These certificates will be

delivered in electronic form or in a hard copy format, depending on the mode of issue of the applications. Certificates issued in both the modes, either electronic form or hard copy form, have the same legal effect.

Application in electronic form

For private companies limited by shares, electronic certificates will normally be delivered within a time of 1 hour. Any registered user who delivers the application will obtain an email notification for downloading the issued certificates on message box and on registered email address.

Application in hard copy form

Usually, certificates in hard copy form are issued within time frame of 4 working days, for companies limited by shares. When the certificates are ready for collection, the applicant will be notified by fax. The certificates have to be collected in person at the Registry along with presentation of the Notification of Collection of Certificates and the identification documents. In case, where the presenter sends a representative to collect the certificates, the representative must have to produce a written authorization from the presenter and the identification document specified in the written authorization.

2.5.4 STAGE 4 – ACQUIRING

AUTHORIZATIONS OR LICENSES

Licenses or permits are mandatory in Hong Kong, for event-related activities, employment agency, travel agency, retail shop, education and restaurant, if the business is carried out in Hong Kong.

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The subsequent step in setting up a new business in Hong Kong is to attain necessary permits and licenses, the precise business entity may need, irrespective of where you conduct the business.

Depending upon the nature of your services and products, there are numerous types of permits and licenses that might be required for your business.

3. GOVERNMENT INITIATIVES AND INCENTIVES

he Hong Kong Government is committed to support SMEs and startups to help realize their vision and take their business to the next level, providing an appealing tax environment for foreign investors.

Because of its outstanding financial infrastructure and promising investment climate, there are many incentives to encourage business investments.

Hong Kong has lower tax rates than most other Asian countries, there is no tax on: -

• Gains arising from the sale of capital assets;

• Profits arising or derived from outside Hong Kong;

• Dividends under statute or revenue authority practice; and

• Estate duty or inheritance tax or death duties.

3.1 TAX POLICIES

What is so unique?

• The tax system in Hong Kong is generally considered to be one of the most transparent, modest and forthright systems in the world.

• Hong Kong does not handover tax revenue to the Central Government in China, i.e., enjoys independent public finance.

• Taxation system in Hong Kong is self- governing and different from the taxation system in mainland China.

• In Hong Kong taxes are collected by Inland Revenue Department (IRD).

• Only profits obtained in Hong Kong is taxable whereas a person's overseas income will not be taxable.

Important Exemptions:

The following sums are excluded from the assessable profits: -

• dividends received from a corporation which is subject to Hong Kong Profits Tax;

• amounts already included in the assessable profits of other persons chargeable to Profits Tax;

• interest on Tax Reserve Certificates;

• interest on, and any profit made in respect of a bond issued under specified ordinances and on some instruments.

• interest income and trading profits derived from long term debt instruments;

• interest, profits or gains from qualifying debt instruments (issued on or after 1

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April 2018) exempted from payment of Profits Tax; and

• sums received or accrued in respect of a specified investment scheme.

• interest that is derived from any deposit placed in Hong Kong with an authorized institution, excluding interest received by or accrued to a financial institution; and

• interest on and any profit made in respect of Renminbi sovereign bonds.

3.2 DOUBLE TAXATION AGREEMENTS (DTA)

A Double Tax Agreement (DTA) is a bilateral agreement between two countries that seek out to avoid the double taxation of an income.

Hong Kong has DTA with following countries:

• Comprehensive DTA with Mainland China, United Kingdom, India, Canada, the Czech Republic, France, Guernsey, Jersey, Republic of Korea, Kuwait, Liechtenstein, Luxembourg, Hungary, Indonesia, Ireland, Italy, Japan, Malaysia, Malta, Mexico, the Netherlands, New Zealand, Portugal, Qatar, Austria, Belgium, Brunei, Spain, Switzerland, Thailand and Vietnam some of which are not in force yet.

• DTA concerning airline income with Croatia, Denmark, Estonia, Ethiopia, Bangladesh, Canada, Fiji, Finland, Germany, Korea, Kuwait, Laos, Macao

SAR, Maldives, Iceland, Israel, Jordan, Kenya, Sweden, Mexico, Norway, the Russian Federation, and Mauritius.

• DTA concerning airline and shipping income with Sri Lanka & Singapore.

• DTA concerning shipping income with USA, Norway, Denmark and the Germany.

3.3 ALLOWANCES

There are several substantial primary allowances offered, for capital expenditure on prescribed assets, by the Government, including certain plant or machinery. Some significant allowances provided by Hong Kong’s Government include:

• An annual depreciation allowance of 4 percent:

➢ is available for commercial structures or constructions utilized other than for industrial purposes;

and

➢ of the primary capital expenditure.

• A primary allowance of 20% of the industrial building’s cost (not including land cost).

• For the year in which the expenditure is incurred, a primary allowance of 60% of the capital expenditure on plant or machinery is granted.

• Capital expenditure on the restoration of a building (excluding domestic construction) is deductible uninterruptedly at rate of 20% a year for five years.

• Capital expenditure on environmental protection vehicles, machinery &

A person is exempt from payment of profits tax in respect of the following sums: -

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installations benefits from a primary allowance of 20% in the year of assessment in which the capital expenditure was incurred. Remaining expenditure is deductible on a straight- line basis of 20% a year for the succeeding 4 years.

3.4 BUDGET 2020-21 -

Key initiatives announced:

• Introduction of a low-interest loan with 100% guarantee for enterprises.

• Maximum loan of HKD 2 million with repayment period up to three years.

• HKD 10,000 cash payout to Hong Kong permanent residents aged 18 or above.

• Business registration fees waived for 2020-21.

• Registration fees waived for company annual returns for two years.

• Inject HKD 345 million for a pilot subsidy scheme to encourage the logistics industry to enhance productivity through the application of technology.

• Increase the grant ceiling under the Technology Voucher Programme to HKD 600,000 and raise the Government’s funding ratio to 75%.

4. TAXATION

ong Kong is considered tax heaven worldwide for its simple and low tax regime, making it one of the most business-friendly jurisdictions in the world.

Tax in Hong Kong is bifurcated in slabs and is levied annually. In the first slab, profit up to 2 million HKD is taxed at the rate of 8.25%, and profit beyond that amount would be subject to be taxed at 16.5% and for proprietorship and partnership two tax slab of 7.5% and 15% are laid down. The tax is levied only when corporations makes profit.

Companies in Hong Kong have the choice to decide upon their financial year end date.

Maximum companies choose financial year end date on either 31 December or 31 March to adjust with Government’s financial year. Newly incorporated companies have maximum period of 18 months to file the taxation amount.

There is no taxation on goods or services which are being exported or imported except on liquor, tobacco and petroleum products.

All the corporations in Hong Kong have to declare their financial statements to the Revenue Department irrespective of whether the transaction takes place in the territory of Hong Kong or outside Hong Kong. In case, the company has source of income outside the Hong Kong, the company may apply for tax exemption to the respective department.

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4.1 TAX GOVERNING AUTHORITY

Established on 1^stApril 1947, the Inland Revenue Department (IRD) is the tax regulating authority in Hong Kong with the Inland Revenue Ordinance being the governing statute for individual and corporate taxation matters in Hong Kong.

The IRD is determined to accumulate revenue with a systematic and economical procedure and also responsible for the administration of the Hotel Accommodation Tax Ordinance, Business Registration Ordinance, Tax Reserve Certificates Ordinance, Inland Revenue Ordinance, Estate Duty Ordinance, Betting Duty Ordinance and Stamp Duty Ordinance.

4.2 TAX RATES

Taxes levied in Hong Kong are on territorial principle of taxation. Taxes are levied only when income is derived or earned from Hong Kong.

Any income derived or earned outside the territory of Hong Kong is not liable to tax even that person or corporation carries on the business in Hong Kong. There is no tax on an income or profit remitted to Hong Kong.

4.3 PROFITS TAX RATES

Hong Kong’s profits tax, or corporate tax system as it usually referred to, follows a flat-rate principle and territorial principle. Moreover, tax incentives have been announced to increase Hong Kong’s strength and effectiveness.

4.4 DOUBLE TAX TREATIES

Hong Kong has signed Double Taxation Agreement (DTA) with various countries that

prevents residents of Hong Kong and DTA countries from paying double tax.

4.5 INDIVIDUALS TAX RATES

• Income between 1 to 50,000 HKD is charged at the rate of 2%.

• Income between 50,001 to 100,000 HKD is charged at the rate of 6%.

• Income Above 200,000 HKD is charged at the rate of 17%.

4.6 WITHHOLDING TAX

In Hong Kong withholding tax is not imposed on dividend and interest. Only non-resident entertainers or sportsmen have to pay royalties and fees on their assessable profits on their performance in Hong Kong.

4.7 CAPITAL GAIN TAX

As such there is no tax on capital gain nor the capital loss is allowed for deduction for the tax assessment.

4.8 DIVIDEND TAX

Dividend income from Hong Kong or other countries is not taxable.

4.9 SALES TAX

There is no concept of GST, VAT or sales tax in Hong Kong.

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4.10 PROPERTY TAX

Property tax is levied on land and buildings and is calculated at a rate of 15% on the net assessable value of the property.

4.11 HOTEL ACCOMMODATION TAX

HAT is fully waived by the government of Hong Kong since 1 July, 2008.

4.12 ESTATE DUTY

Estate duty or inheritance tax is abolished in Hong Kong since 2006.

4.13 STAMP DUTY

Stamp duty is levied on certain types of documents pertaining to stock, share, debenture and other bonds as per the first schedule of the Stamp Duty Ordinance. It is fixed on some documents (varying from HKD 3.00 to HKD 100) while ad valorem on others (ranges from 0.1% to 4.25%).

Stamp duty is charged on transfer of stock at the rate of 0.2% of the market value by Stock Exchange of Hong Kong.

4.14 CUSTOMS AND EXCISE DUTY

In general, there is no tariff duty on imports except on alcoholic beverages, tobacco products, hydrocarbon oil and methyl alcohol. Tax or excise duty is not levied on exports from Hong Kong.

5. FOREIGN INVESTMENT AND FINANCING

ong Kong is known as a beacon of capitalism because of its free trade agreements & very low taxes. Hong Kong is consistently labeled as the world's freest & most abled economy by highly reputable global organizations. As Asia’s largest capital market, Hong Kong has diverse financing channels with more than 150 international and local banks which are active in granting corporate loans, project financing & syndicated loans. Hong Kong is an ideal place for investments or to carry out businesses. Let’s find out why?

5.1 CONNECTIVITY TO ASIA AND OVERSEAS

• Hong Kong has international logistics hub with exceptional infrastructure.

• An award-winning international airport.

• Within reach of five-hour flight from half population of world.

• Having one of the most competent and world's busiest container ports.

• World-class telecommunication networks.

5.2 WIDER OPPORTUNITIES

• A free investment and trade policy.

• Efficient and supportive government.

• Comprehensive freedom of capital movement.

• A mixture of western and eastern diversity providing international lifestyle.

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• A foundation for enterprises to trigger their business activities in international markets.

• With its prominent location on the Southeast coast of China, Hong Kong provides easy access to the Chinese mainland for international businesses.

5.3 PROFESSIONAL SERVICES

• Around 85% of Hong Kong's GDP derives from service sectors.

• Areas such as legal services, management, transport and logistics, design and marketing, all resemble impeccably with Hong Kong's position.

• Hong Kong have extensive experience in various sectors such as market entry assessment, corporate governance, corporate finance, auditing & compliance, tax advisory and allocation & risk evaluation.

• Hong Kong’s consultants & legal advisors are well-aware with legal and regulatory background of different nations around the globe.

5.4 RIGHTEOUS GOVERNMENT

• With very few restrictions, government of Hong Kong supports a free and open market policy applying to almost all trade and investment.

• All companies are benefited from the government policies with very limited exceptions, it does not discriminate between local and foreign investors.

• Offering an alluring climate for investment through its corporal infrastructure with

good communications and a simple & low tax structure.

• The government encourages just & fair competition within enterprises.

• Stamp duties related to selling or buying properties in Hong Kong are comparatively less than other jurisdictions and is classified as:

a) Ad Valorem Stamp Duty (AVD) for Residential Property vs. Non- Residential Property

b) Special Stamp Duty (SSD) c) Buyer’s Stamp Duty (BSD)

5.5 CLOSER ECONOMIC PARTNERSHIP ARRANGEMENT (CEPA)

• Closer Economic Partnership Arrangement (CEPA) is the free trade agreement which is determined between Hong Kong & Mainland China.

• The agreement unlocks enormous markets for Hong Kong goods and services.

• CEPA is adopting a constituent approach, introducing an arrangement for more liberalized actions.

• The Mainland China imposes zero import tariff for exports from Hong Kong companies in various sectors for accelerating trade.

• It will significantly develop the economic cooperation and integration between the Mainland China and Hong Kong.

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5.6 NO LIMITATIONS TO FOREIGN INVESTMENT

• The Government of Hong Kong encourages investment and does not discriminate between domestic and foreign establishments generally.

• Foreign enterprises commencing business in Hong Kong does not confront any special requirements or procedures.

• Reserves from capital accounts or any profit may be generously returned to the overseas countries with no foreign exchange regulation.

• With very limited foreign investment limitations, Hong Kong permits 100%

foreign ownership of companies.

• Since November 2001, foreign banks in Hong Kong are allowed to establish as many branches as they want and are free to operate with limited restrictions.

6. FOREIGN CURRENCY CONTROL

ong Kong is a key financing channel, holding one of the largest stock markets in the world and providing the biggest gateway for international investment. Hong Kong has become one of the world’s leading currency trading centers, ranking third globally for U.S. Dollar trading. Any foreign investment enterprise may settle, buy and sell foreign currency in Hong Kong through a designated bank dealing in foreign exchange businesses. Article 112 of the Basic Law guarantees free flow of capital and free

convertibility of the Hong Kong Dollar. The government asserts free convertibility of the Hong Kong Dollar does not impose foreign exchange controls. The Hong Kong Monetary Authority (HKMA) assures that the US Dollar trades in a narrow band between HKD 7.75-7.85.

Hong Kong's grand official reserves offer back up for the Hong Kong Dollar providing a significant source of stability for upcoming generations.

Hong Kong Dollar is freely convertible into other currencies as there exists no foreign exchange controls in Hong Kong. The HKD has been officially linked to the USD since 1983. The link is maintained through the mechanism of certificates of indebtedness which are issued and redeemed by the Hong Kong Exchange Fund only against payment in US Dollar at a fixed exchange rate of HKD 7.80 to USD 1.00. The free-market exchange rate of the HKD against the USD for the nonbank public is governed by supply and demand, but has not fluctuated significantly from the fixed exchange rate.

7. TRADE

ong Kong is one of the fastest growing markets in the world being a founding member of World Trade Organizations and a member of Asia Pacific Economic Cooperation. It is also called as the gateway to China because it offers an easy access to business opportunities in Mainland China. Government’s trade policy reflects Hong Kong’s status as a centre of free trade and ideal place to do business, imposing less restrictions and allowing free market forces

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to regulate exports and imports. It provides protective measures and subsidies as a means for avoiding balance-of-trade deficits.

7.1 GENERAL TRADE & COMMERCIAL REGULATIONS

Any person establishing business in Hong Kong, in an individual capacity or partnership or a corporation whether it is local or foreign owned, must be registered with the Inland Revenue Department. Hong Kong Government’s basic policy of minimum intervention in local business and industries has always been much attractive to foreign investors.

7.2 RESTRICTIONS ON FOREIGN INVESTMENT

There exists no restriction on foreign investors and foreign-owned companies. Although there are some statutory restrictions on foreign ownership of licensed television and sound broadcasters. In order to secure, maintain and improve access to foreign markets, Hong Kong is party to a number of multilaterals, regional, plurilateral and bilateral trade agreements.

7.3 FOREIGN EXCHANGE ADMINISTRATION

There is no particular foreign exchange control regulation in Hong Kong, the local currency is freely convertible and no government or other guarantees are required. Anyone can freely remit the funds outside Hong Kong in the form of dividends, interest or profits earned against the investment, royalties, service fees and branch profits. The repatriation of the company’s

profits is very important for any overseas company conducting business in this city.

7.4 IMPORT AND EXPORT ISSUES

Hong Kong executed many free trade agreements with certain economies and being a free port, it does not levy any customs tariff on import or export of the goods. Licensing is required for import and export of some goods to fulfill obligations undertaken by Hong Kong with its trading partners and to meet public health and safety or internal security needs, yet there is no hard and fast procedure for licensing. Hong Kong collects an excise duty only on few goods, irrespective that whether they are imported or locally manufactured. It is a mandatory duty of the importers in Hong Kong to get customs clearance and complete other formalities with concern authorities. Charges should be based on the value and nature of goods imported, except for articles exempted from declaration charge.

7.5 PRICE CONTROL AND UNFAIR COMPETITION

Hong Kong Government has no direct control over the prices. Although, there are only some exceptions in this regard relating to certain organizations engaged in utility services and most forms of public transport. They need to obtain Government ‘s prior approval for any price increment. As of now, there is no competition law in Hong Kong.

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7.6 INTELLECTUAL PROPERTY PROTECTION

Hong Kong’s expertise in the protection of Intellectual Property Right has been recognized by Asia-Pacific Economic Co-operation (APEC).

Hong Kong is worldwide famous for leadership in Asia in the protection and enforcement of Intellectual Property Rights. The registration of trademarks, copyrights, patents and registered designs are governed by separate ordinances.

Across Asia, Hong Kong plays a major role in export and import of goods and services. Hong Kong frequently trades with China, India, Vietnam, Netherlands, Macau and imports mostly from China, South Korea, Chinese Taipei, Singapore and United States. Hong Kong mostly exports goods manufactured in Hong Kong and those produced in Hong Kong-owned industries in China. It includes gold, broadcasting equipment, integrated circuits, diamonds and telephones.

8. EMPLOYMENT LAWS

he most significant and comprehensive piece of legislation regulating conditions of employment in Hong Kong is the Employment Ordinance.

The legislation provides the basic protection to employees including payment of wages, statutory holidays, wage deductions restriction, and many more benefits to all employees in Hong Kong, irrespective of the hours of work done by an employee. The Employment Ordinance safeguards the rights of employees in Hong

Kong. In case, any of your employee falls under the ordinance protection, ensure that the employment contract meets the minimum requirements under the Employment Ordinance.

The Employment Ordinance applies to all employees, regardless of their nationality with limited exceptions.

There are some other laws as well that are likely to apply to employees, notwithstanding contractual choice of law in the employment contract.

8.1 WAGE AND EMPLOYMENT RECORDS

The employer in Hong Kong is responsible to maintain records of the wages paid and employment history of each employee for the previous one year. All the data should be kept at the employer’s place of business or employee’s place of employment, and should be preserved for at least 6 months after the discontinuation of an employment.

As per the Statutory Minimum Wage Ordinance, total sum of hours worked in each wage period must be recorded for the calculation of employee’s minimum wage.

8.2 CONTINUOUS CONTRACT OF EMPLOYMENT

Employees who are employed under a

“Continuous Contract of Employment” – enjoys additional benefits such as paid annual leave, sickness allowance and much more.

An employee is considered being employed under a “Continuous Contract of Employment”

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when he has been working for an employer with minimum of 18 hours per week for not less than 4 weeks. In case of dispute, the employer has to prove that the employment was not continuous.

8.3 WAGES

According to the Employment Ordinance, wages consists of all remunerations, allowances, earnings, service charges, tips, commission and payments for overtime.

It excludes the cost of accommodation, food, fuel, water, education, medical care or electricity provided by the employer, contribution of employer to retirement schemes, end of year payment, gratuity payable, bonus payment, traveling concession and allowances.

8.4 WAGE DEDUCTIONS

In Hong Kong, no employer can deduct wages of their employees except in cases as below:

• Absence from work;

• Recovery of any prior or over-paid wages from employee;

• Food and accommodation expenses;

• Damage or loss of employer’s property due to negligence;

• Recovery of loan lend by the employer to employee;

• Contribution to be paid by the employee for schemes such as medical, retirement, superannuation or thrift schemes;

• Deduction authorized under enactments.

The total amount of deduction must not exceed half of the employee’s wages in a wage period.

8.5 PAYMENT OF WAGES

Employers are bound to pay wages to employees on or before the due date, or within 7 days after it becomes due. An employer should terminate the contract according to its terms if he is unable to pay the wages.

8.6 WORKING HOURS

Hong Kong laws has no fixed working hours, except for young person i.e., those below 18 years. Maximum working period for young persons is 8 hours a day or 48 hours a week.

8.7 EMPLOYEE’S REST DAYS

Every employee employed in continuous employment contract, is entitled to one rest day every week or in every period of seven days. One rest day is counted as a period as long as 24 hours during which the employee can be absent from work. Payment for the rest day is subject to the contract.

8.8 COMPULSORY WORKING ON REST DAYS

No employer can force an employee to work on a rest day except in the event of:

• breakdown of machinery or plant or;

• unforeseen emergency.

The worked rest days should be substituted by the employer with other days.

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8.9 STATUTORY HOLIDAYS

Continuous employees with more than one year of service are provided with paid annual leave of up to 14 days, subject to tenure of service.

Commonly in Hong Kong, increased contractual leave above the statutory minimum are offered by the employers.

In Hong Kong, there are 12 statutory holidays. In case a statutory holiday falls on the same day of a rest day, an alternative holiday be scheduled on the next day which should not be an alternative holiday, a statutory holiday or a rest day.

8.10 HOLIDAY PAY

An employee is eligible for a holiday pay who is under a continuous contract for more than three months.

8.11 PAID ANNUAL LEAVE

Both parties must mutually agree to the date for paid annual leave at least fourteen days in prior and should be utilized within 12 months of entitlement.

8.12 ANNUAL LEAVE PAY

The daily pay for annual leave is calculated as the sum equal to the average daily wages of an employee in the past twelve months. In case an employee is entitled for more than 10 days of leave, he can “sell” his entitled leave for payment.

8.13 ANNUAL LEAVE SHUTDOWN

If an employer wishes to cease his business for granting annual leave, he must issue written notices at least before 1 month.

8.14 SICKNESS ALLOWANCE & PAID SICKNESS DAY

A "sickness allowance" up to a maximum of 120 days is given to continuous employees. The employment laws also provide for Paid Sickness Days in addition to Sickness Allowance.

Sickness Allowance is an additional benefit for employee under a continuous contract of employment. A contract of employment cannot be terminated while the employee is on paid sickness leave, but can be terminated for serious misconduct through summary dismissal.

8.15 MATERNITY PROTECTION

Maternity protection is essentially given to female employees under a continuous contract of employment, with maternity leave, prohibition of heavy work, and protection from dismissal during the period. A medical certificate has to be presented by a female employee to confirm her pregnancy.

8.15.1 TAKING OF MATERNITY LEAVE

• Any female employee can start her maternity leave either two weeks or four weeks before the expected date of confinement, obtaining a notice of agreement with the employer prior to leave.

• In case, the confinement happens earlier than the expected date, the employee can start her 14 weeks maternity leave after informing the employer with notice of her confinement.

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8.15.2 MATERNITY LEAVE PAY

An employee under continuous contract of employment is entitled to maternity leave pay only when the period of service exceeds forty weeks period before the commencement of maternity leave. The employer cannot dismiss a pregnant employee during this period except in exceptional circumstances. The employer should also prevent the pregnant employee from handling heavy work or any work which affects her fetus development.

8.16 END OF YEAR PAYMENT

The employee employed under continuous employment contract is entitled for end of year payment or annual payment also known as 13th month payment or end of year bonus, but it is presumed that it is not gratuitous nature or which is payable at the discretion of the employer, except if written terms or condition are expressed for other meaning as per the contract.

8.17 LONG SERVICE PAYMENT AND SEVERANCE PAYMENT

Severance Payment is granted by employer to an employee who is in employment under continuous contract for more than 24 months and dismissed by:

• Lay-off;

• Redundancy;

• Expiry of existing fixed term contract without renewal due to redundancy.

An employee under continuous contract of employment for more than 5 years is entitled for

Long Service Payment when the employee is dismissed/resigns by following reasons:

• Not due to redundancy;

• Not in case of summary dismissal due to serious misconduct;

• In case of expiry of existing fixed term contract;

• Death of the employee;

• Physical or mental unfitness in relation to work engaged;

• Aged 65 or above.

8.18 HIRING FOREIGN EMPLOYEES

The Hong Kong government allows for foreigners with special skills, knowledge, and experience although locals are given the first preference.

Foreign professionals are divided into skilled and semi-skilled. Visas for semi-skilled professionals are valid for one-year period, and is non- renewable while skilled foreign professionals’

visas are renewable.

8.19 MANDATORY PROVIDENT FUND

The MPF ordinance requires employers to enroll employees in a Mandatory Provident Fund (MPF) Scheme, subject to limited exceptions. Certain contributions to MPF must be made by employer and employee. There are certain exemptions for foreign nationals:

• If they hold an employment visa; or

• If they are posted in Hong Kong for a period limiting to 13 months; or

• If they are covered by overseas retirement schemes.

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Contribution of 5% of the monthly cash income should be made by employees to MPF. The scheme is not compulsory for few employees, comprising:

• Employees covered under statutory pension;

• Domestic employees;

• Self-employed hawkers;

• Workers availing benefit under other provident fund schemes;

• Members with MPF exemption certificate under occupational retirement schemes;

• Employees earning below HKD 7,000 monthly.

Employees earning HKD 30,000 a month, must contribute up to HKD 1,500. In case of casual employees working on daily wages, a separate scale of contribution exists.

8.20 TERMINATION OF EMPLOYMENT

Termination of employment is comparatively clear in Hong Kong from other countries. The employment contract can be terminated by the company at any time, by serving notice of termination specified in the contract or making a payment in lieu of notice, with few exceptions.

Notice period may vary from seven days to one month, as laid down in the term of the contract. In cases of grave misconduct an employer may dismiss a worker without notice, although the threshold to justify a summary dismissal is high.

If the employer dismisses the employee without a valid reason i.e., misconduct, incompetence, lack of required qualifications or a layoff than the Employment Ordinance allows a continuous

employee with more than two years' service to induce a claim for remedies for unreasonable dismissal against an employer.

Statutory severance or long-service payments may be due, depending on duration of service and the reason for dismissal.

8.20.1 TERMINATION PAYMENTS

Generally, the employer must calculate and pay all the payment due to employee on termination.

All the outstanding payment (except long service payment and severance payment) shall be paid on the date of termination or within seven days of termination.

8.21 STATUTORY EMPLOYMENT

PROTECTION AGAINST DISMISSAL

Employers are prohibited from dismissing an employee (except in case of serious misconduct) in the following situations:

• Female employees who are pregnant and gave their notice of pregnancy to employer.

• Employees giving evidence or information in any proceedings or inquiry in relation to the enforcement of the EO, work accidents or work safety legislation.

• Employees who are taking paid sick leave.

• Employees taking part in activities or membership of trade union

• Injured employees who are not yet under an agreement with the employer for employee’s compensation or before a certificate of assessment is issued.

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8.22 EMPLOYEES' DATA PROTECTION RIGHTS

The Personal Data (Privacy) Ordinance regulates the collection and use of personal data in Hong Kong. It regulates an employer's collection, use and disclosure of an employee's personal data.

8.23 HEALTH AND SAFETY

Employers must take reasonable care for the health and safety of their employees, including providing first aid equipment and prescribing precautions to be taken as per Occupational Safety and Health Ordinance (OSHO). The ordinance covers most industrial and non- industrial workplaces in Hong Kong. If an employee suffers an injury arising out of an accident which occurred in the course of employment, he is entitled for compensation. The employers should also comply with the Factories and Industrial Undertakings Ordinance and the Employees' Compensation Ordinance.

9. IMMIGRATION

on-Hong Kong residents who possess special skills, knowledge and has expertise which is not readily available in Hong Kong may apply before concerned Hong Kong immigration authority for a work visa with the intention to work under the General Employment Policy (GEP). In simple words, if any person wishes to enter in Hong Kong for employment, investment, education, training, or residence is required to obtain a valid entry visa.

9.1 GENERAL EMPLOYMENT POLICY FOR WORK VISA

A non-resident, willing to work in Hong Kong having expertise and qualification can apply for work visa under the General Employment Policy (GEP). Hong Kong immigration authority will consider the following things while approving the employment visa:

• Applicant should hold valid travel documents (Passport).

• Applicant has submitted a supporting document that he has no criminal record and raise no security or criminal concerns to the Hong Kong.

• The business by the applicant must beneficial to the Hong Kong’s economy, industry and trade.

• Necessity of employment of the applicant.

• Applicant must prove that he possesses specialized skill that is not readily available in Hong Kong.

9.2 SPONSORSHIP

Hong Kong companies may sponsor the foreign national to work for them and apply for employment on their employee’s behalf. Any person who wants to apply for a work visa, irrespective of categories need to have a sponsorship from a Hong Kong company and the applicant should have intention to work with that concerned company.

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9.2.1 DUTIES OF SPONSOR

• It is the duty of sponsor to apply for a work visa on behalf of the applicant before applicant’s arrival in Hong Kong.

• If the applicant enters into Hong Kong as a visitor, it is the duty of the sponsor to ensure that the applicant should not commence any work until he obtains work visa.

• It is the duty of the sponsor to inform the Hong Kong Immigration Department about the working status of the applicant.

• It is the duty of the sponsor to repatriate the applicant in his or her original country of residence at the expiration of work visa.

9.3 GUIDELINES CONCERNING WORK VISA

• As per current immigration policy, any person who wishes to work in Hong Kong should possess a distinctive skill, knowledge, or value which is not readily available in Hong Kong.

• It should be ensured by work visa holder that he will only work with sponsor company.

• In case of employment change the applicant shall apply for change of employment before the Immigration Department through new employer and only after such approval, he can commence the work with new employer.

• Under the exception provided by the Immigration Department, the dependent of the person holding an employment visa can work in Hong Kong under the dependent’s residency visa.

9.4 DOCUMENTS REQUIRED

From employee:

• Employment visa application form;

• Employment offer letter;

• Valid passport;

• 2-3 recent photographs;

• Qualification certificate, and other relevant documents;

• Travel and health insurance.

From employer:

• Employment form of foreign professionals;

• Photocopy of the employment contract which includes candidate’s designation, salary, benefits and duration of employment;

• Photocopy of company’s registration certificate with Hong Kong Government.

The certified documents submitted before the Immigration Department should be in English or Chinese language.

9.5 DURATION OF VISA

Under a General Employment Policy, a visa extension of two years is granted for the first time, while extending for the second time it will be valid for additional two years, further for the third time it will be valid for a period of three years.

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10. AUDIT AND ACCOUNTING

t is often beneficial to start a business at Hong Kong due to its straightforward taxation system, low tax rates and territorial concept for profits tax. The system may be different from other countries; however, compliance of the taxation system is of the utmost significance in instilling an effective tax regime in Hong Kong.

10.1 AUDITING

Audit is directed by a licensed Hong Kong Certified Public Accountant (CPA). These are tax specialists who have studied and passed the necessary examinations to show their competency in accounting, auditing and taxation.

Companies in Hong Kong can approach a Hong Kong CPA for assistance in analyzing their accounts and to file their annual taxes.

According to the Hong Kong Companies Ordinance, Hong Kong incorporated companies are required to perform annual audit for the economic reports by a Hong Kong practicing Certified Public Accounts (CPA). All Hong Kong incorporated companies required to do this, regardless of commencing business in Hong Kong or any other country. Hong Kong- incorporated companies are required by law to prepare audited financial statements. Even though there is no requirement that private companies file annual financial statements with the Companies Registry, proper books of account must be kept and preserved at the company’s registered office. Companies should mention managers, members and the location of a

registered office while filing annual returns. The auditing and filing should be complied as per regulations and requirements of IRD.

10.2 ACCOUNTING REQUIREMENTS

Accounting ideals in Kong Hong are known as Hong Kong Financial Reporting Standards (HKFRS) which are almost fully converged with International Reporting Financial Standards (IFRS). The Hong Kong Institute of Certified Public Accountants (HKICPA) is authorized by the Professional Accountants Ordinance (PAO) to develop and issue Economic Reporting Standards (HKFRS) and Hong Kong standards on quality control, auditing, assurance and related services (HKSA). The standards of accounting and auditing practices are to be observed and applied by members of the HKICPA.

As per the Companies Ordinance, the directors of every company should place audited financial statements before the shareholders in the annual general meeting unless expressly exempted.

Financial statements are to be presented at least annually. The accounting period should normally cover one year except for the first accounting period after incorporation. The end accounting year can be decided by the company.

The company has to supply the auditor with financial reports to display overall business. The auditor’s work is to review all particulars along with the additional documents, scrutinize their accounts and offer an opinion as to accuracy of financial statements of the company.

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Following details are required for an audit:

• Service invoices/contracts;

• Financial reports/management accounts;

• Bank statements;

• Receipts and bills;

• Other relevant accounting documents.

10.3 PROCESS

The process of auditing and accounting in Hong Kong is similar other commonwealth countries:

• The Company’s management frame financial reports and supporting documents, and deliver these to the CPA along with supplementary relevant accounting data.

• The auditor examines every considerable transaction in the financial statements, identify and evaluate any fluctuations or errors which may have an impact on financial accounts of the company.

• Thereafter, an opinion is given by the auditors, after transactions are examined, on the accuracy and true depiction of financial statements for the company.

• The auditors make an audit report from their audit and opinion on the financial accounts. The directors of the company are required to sign all the audit documents and return it to the auditor.

Companies must search for a statutory auditor to conduct an annual audit of the financial stability of the organization. The Companies Ordinance has given powers to the Registrar to compound offences for late filing of annual returns. A branch of a foreign corporation in Hong Kong is not

necessitated to file statutory audit under the Companies Ordinance, although the Inland Revenue Department (IRD) may require audited accounts of the foreign corporation for its profits tax return.

Hong Kong also adopts its variation of IFRS for SMEs, which is known as HKFRS for private entities, for companies that do not have public accountability.

10.4 REQUIREMENTS ON STATUTORY AUDIT

Auditors are appointed by the shareholders in the annual general meeting to hold office until the next annual general meeting. The first auditors of a company may be appointed by the directors at any time before the first annual general meeting to hold office until the conclusion of the meeting.

11. EMPLOYMENT

CONTRACT & WORK PERMITS

n Hong Kong, employment contract can be a permanent one or for a fixed term. In case a period is not specified in the contract, it is deemed to be a contract for one month, renewable from month to month when the employee has worked for the employer for at least 18 hours per week for a continuous period of four weeks.

Written employment contracts are not mandatorily required, although in practice, most contracts are written. English and Chinese both are the official languages in Hong Kong. English

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is widely used by the legal, corporate, professional and financial sectors.

Probationary periods do not face any restrictions in Hong Kong and are common, typically ranging from three to six months. Either party can terminate the contract during the first month of probationary period, notwithstanding what is written in a contract. Employers are not required to provide notice to the employee before ending an employment contract.

Agency workers are not as common in Hong Kong as in certain other countries in Asia, slightly due to the comparative easiness with which employers can terminate employment in Hong Kong.

The Employment Ordinance further divides employees as under contract and employees under a continuous employment contract.

Employees under an employment contract are eligible for basic protection under the EO including restrictions on wage deductions, payment of wages, the granting of statutory holiday, and other benefits.

11.1 DRAFTING THE EMPLOYMENT CONTRACT

Hong Kong employment contract specifies the agreed terms and conditions of employment between the employer and employee. It involves both explicit and implied terms. The contract terms should abide by the minimum requirements under the Employment Ordinance. Employment contracts can be oral or written. In case they are in written form, it is compulsory for all employers to provide employees with a copy of the written

employment contract. The employers should secure their employee’s consent prior to making any changes, alterations or additions to the terms of a contract.

In the free market like Hong Kong, either parties are independent to negotiate on the terms and conditions of employment under the scope of Employment Ordinance and other laws.

11.1.2 DURATION OF EMPLOYMENT CONTRACT

In absence of any express agreement to the contrary, every contract of employment is deemed to be a contract for one month and renewable from month to month when the contract is deemed as “continuous”.

11.2 WORK PERMITS

Hong Kong is an exceptional destination for business as well as professionals to live and work in another country. Hong Kong has no bar on the number of people who can live and work in Hong Kong as a skilled migrant, unlike some other countries. Work permit issued to skilled foreign professionals falls under the Employment for Professionals scheme.

Hong Kong provides different classes of visa for employment and investment, some of which are as Visas under:

• The General Employment Policy (GEP);

• The Admission Scheme for Mainland Talents and Professionals (ASMTP);

• Immigration Arrangements for Non-Local Graduates (IANG);

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• Admission Scheme for the Second Generation of Chinese Hong Kong Permanent Residents; and

• Capital Investment Entrant Scheme (CIES).

The permits are granted to individuals based on the analysis of qualifications and specific skills set that are not possessed by the Hong Kong local citizens also there is no limit to the number of visas. A work visa will not be an issue for a highly qualified skilled professional considering the country has a shortage of such specific skills.

11.2.1 ELIGIBILITY REQUIREMENTS FOR WORK PERMIT UNDER THE GENERAL EMPLOYMENT POLICY:

Most workers will fall under General Employment Policy (GEP) or Technology Talent Admission Scheme and has to undergo following eligibility criteria:

• It is to be proved that the applicant has a skill that are not readily available in Hong Kong.

• An individual should have secured an employment offer from the company before the visa application is submitted;

• Individual should possess exceptional educational background with a relevant degree, excellent technical qualifications, notable achievements and experience in the chosen field of work.

• An individual should be placed in a management level job position and the salary should not be more than the standards set by local professionals (minimum 20,000 HKD).

• Documentation as to clean criminal record.

• The sponsoring company must be financially stable.

• In addition, sufficient proof confirming that the employee will contribute positively towards improving Hong Kong's economy.

11.2.2 DURATION OF VISA

Under a GEP visa an extension of two years is granted for the first time. While extending for the second time visa will be valid for an additional two years further for the third time it will be valid for a period of three years.

11.2.3 INVESTMENT VISA

This visa is geared toward those looking to open a business or start investment in Hong Kong.

Applicants must submit a detailed two-year business plan and have enough capital to keep the business afloat for the first six months.

Investment visas expire after two years, but holders can apply for an additional two years, then another three years.

Businessmen can also attain this visa as part of the Capital Investment Entrant Scheme, where they invest HKD 10 million in Hong Kong to gain residency in the city. As part of an October 2010 change to the scheme, investments in real estate are exempt from the HKD 10 million, which was also raised from the previous threshold of HKD 6.5 million. But other investments that qualify include equities, debt securities, certificates of deposits and subordinated debt. The government doesn’t cap the number of investment visas it gives out a year.

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To be eligible for this visa, applicants are required to show the following:

• No criminal records;

• A good education background;

• A viable business plan in place, including business turnover, financial resources, etc.

12. BANKING

ong Kong holds one of the largest representations of international banks around the globe with extensive, historical existence of multinational banks and other financial institutions. Around 71 of the world's 100 largest banks are present in Hong Kong. In terms of the volume of external transactions, Hong Kong is the world's 9th largest international banking center. Hong Kong's banking sector being highly open is one of the crucial components of its financial system. Its Asia’s leading financial center and the second largest in Asia in volume of transactions. Hong Kong has a large concentration of international and domestic banks with more than half of the most important financial institutions of the world.

The banking sector plays a significant part in making Hong Kong as a chief loan syndication hub in the region. It also contributes to Hong Kong's status as the world's 7th largest foreign exchange center.

As of Year, 2020, there were 164 licensed banks (31 of which were incorporated in Hong Kong), 17 restricted license banks (12 incorporated in Hong Kong) and 13 deposit-taking companies (all

incorporated in Hong Kong) in operation. These 194 authorized institutions function a wide- ranging network of more than 1,300 local branches. In addition, there were 42 local representative offices of overseas banks in Hong Kong. The success of the Hong Kong's banking and financial services economy is mainly due to its non-discriminatory low tax regime.

Anyone starting a banking/Credit business in Hong Kong need to obtain a license from HKMA.

In Hong Kong there is three-tier banking and deposit–taking system. They are divided on the basis of the nature of business, term of deposits and amount accepted.

12.1 LICENSED BANKS – includes institutions:

• Operating current and saving accounts;

• Accepting deposit of any size and maturity from the public;

• Paying or collecting cheque drawn by or paid in by customers; and

• Using the name bank without restriction.

12.2 RESTRICTED LICENSE BANKS

• These organizations are basically involved in merchants and capital market activities.

• They can take deposits of any maturity of HKD 500,000 and above.

12.3 DEPOSIT TAKING COMPANIES

These companies are mostly owned by, or associated with banks or the engage in a range of specialized activities, which includes consumer finance, commercial lending and securities business.

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Institutions not qualifying under a full banking license may apply for the restricted type. The system facilitates the presence of a higher number of banking institutions and service providers. Investors can enter the deposit-taking sector and register a company that will provide various services as well as conduct investment banking activities in Hong Kong.

All companies operating in the sector should have a certain amount of liquidity and capital at all times and must submit returns to HKMA. The Banking Ordinance regulates the banking sector and each company must comply with the requirements under the Ordinance.

Most banking service providers are licensed banks. Hong Kong’s stock market is one of the top three stock markets in Asia. The two significant elements that have contributed to the quality of the market are its financial regulatory system which is modern and allows for a high degree of transparency and supervision. Hong Kong is also an offshore Renminbi center.

13. DISPUTES

RESOLUTION SYSTEM

ong Kong is an ideal hub to resolve international business disputes for foreign parties conducting business in, or with parties based, in Hong Kong and also acts as a bridge for overseas disputes involving Mainland Chinese parties given its geographic and economic proximity to Mainland China.

13.1 LITIGATION

Pursuant to the constitutional safeguards laid down in the Basic Law, Hong Kong has a sound legal system and a rule of law tradition, as well as an independent judiciary. Hong Kong adopts the common law system, which is more familiar to the international commercial and trade community.

This common law system is a continuation of the pre-existing 1997 legal system, before the resumption of the sovereignty of the HKSAR to the People's Republic of China. Under the principle of “One Country, Two Systems”.

Hong Kong is mainly based on the English Court system. The final appellate court was replaced from the “Privy Council in London” with the “Court of Final Appeal in Hong Kong” after 1997.

A party wishing to start litigation in Hong Kong has to first identify the appropriate court. This would be based on the nature and amount of the claim. For business disputes, it would often be the District Court or the Court of First Instance of the High Court in which a party would commence an action. The benefit of a litigation in Hong Kong is that no upfront court fees are required unlike other jurisdictions.

13.1.1 ENFORCEMENT OF COURT JUDGMENTS

Hong Kong has mutual agreements for the acknowledgement and enforcement of court judgments with 15 countries under the Foreign Judgments (Reciprocal Enforcement) Ordinance (Chapter 319 of the Laws of Hong Kong). This means that a Hong Kong monetary judgment can be recorded, recognized and directly enforceable

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in the selected jurisdictions according to their respective statutes. Enforcement instrument is also possible in non-common law authorities and the above options applies to enforcement of foreign verdicts in Hong Kong.

13.2 ARBITRATION

As a leading seat of arbitration, Hong Kong is home to a number of the world’s top arbitral organizations, top arbitrators, and foremost arbitration practitioners, making it an ideal place to commence arbitration proceedings.

Furthermore, Hong Kong has experienced dispute resolution talents and rich dispute resolution culture.

With its long-standing history of arbitration and ample regulatory support, Hong Kong has featured an arbitration-friendly legal regime and achieved the status as a hub for alternative dispute resolution. There is national support for the development of Hong Kong as an international legal and dispute resolution services center in the region.

The signing of the Interim Measures Arrangement is a major breakthrough to the benefit of Hong Kong under "One Country, Two Systems", signifying that Hong Kong has become the first and the only jurisdiction outside the Mainland of China where, as a seat of arbitration, parties to arbitral proceedings administered by the designated arbitral institutions would be able to apply to the Mainland courts for interim measures. This has been well-received by the local profession which generally considers that the interim measures arrangement will help enhance the attractiveness of Hong Kong as a

center of arbitration for Mainland-related disputes.

13.2.1 ENFORCEMENT OF ARBITRAL AWARDS

With respect to arbitration awards, Hong Kong has an arbitration friendly regime and the courts have rarely refused to identify or enforce an arbitral award (whether it is made in or out of Hong Kong). The Agreement on the Recognition and Enforcement of Foreign Arbitral Awards is a key tool in international arbitration. As of Year, 2020, 164 countries have agreed to recognize and enforce arbitration awards made in other participant countries subject to limited conditions.

The unlikely event an arbitral award made in Hong Kong needs to be enforced in a non-New York Convention jurisdiction, enforcement may still be possible.

Hong Kong offers a clear and user-friendly platform to parties. Its recognized judicial system and mutuality with Mainland China further strengthen its position worldwide as the ideal place for parties to resolve business disputes mainly in cross-border relations.