vLex Hong Kong

  • What Do US Sanctions Mean for Financial Institutions in Hong Kong?

    On Friday, 7 August 2020, the Office of Foreign Assets Control (‘OFAC’) of the US Department of the Treasury updated its Specially Designated Nationals and Blocked Persons List (‘SDN’), imposing economic sanctions on 11 current and former Chinese officials. Please see full Publication below for more information. (See Article)

    Aug 14, 2020 6:31 AM

  • Hong Kong Corporate Insights | July 2020

    Equity Capital Markets - The Stock Exchange of Hong Kong Limited (SEHK) invites feedback on proposals to introduce a paperless listing & subscription regime, online display of documents, and reduction of the types of documents on display. Please see full Publication below for more information (See Article)

    Aug 13, 2020 6:31 AM

  • Landmark order recognizes Hong Kong insolvency proceedings in Singapore

    The Singapore High Court has recently granted recognition to Hong Kong liquidation proceedings and liquidators for the first time under Singapore's enactment of the United Nations Commission on International Trade Law Model Law on Cross Border Insolvency (the model law). The model law, which was adopted by Singapore in May 2017 and first applied in the case of Re: Zetta Jet Pte Ltd1, is the leading international initiative on the recognition of foreign insolvency and restructuring proceedings, and provides a clear framework for jurisdictions to recognize and assist foreign jurisdictions. Please see full Publication below for more information. (See Article)

    Aug 10, 2020 6:32 AM

  • SFC’s Annual Report 2019/20: 10 things we learnt

    The Securities and Futures Commission has published its 2019/20 Annual Report setting out its strategy for upholding market integrity and supporting Hong Kong’s development as a leading international financing centre. The role of the SFC in supporting Hong Kong’s position, along with London and New York, as one of the top three global financial centres continues to be critical. (See Article)

    Aug 7, 2020 8:31 AM

  • Hong Kong's National Security Law – Things that businesses should know about

    On 30 June 2020, The Law of the People’s Republic of China (“PRC”) on Safeguarding National Security in the Hong Kong Special Administrative Region (the “National Security Law”) was gazetted for promulgation and came into immediate effect in Hong Kong on the same day. Whilst some may welcome the implementation of the National Security Law, others may be concerned about the likely implications of this legislation on their ways of life and business affairs in Hong Kong. This article summarises a number of areas of the National Security Law which are of particular relevance to those who conduct business in Hong Kong. (See Article)

    Aug 5, 2020 6:32 AM

  • Electronic filing of court documents in HK – Court Proceedings (Electronic Technology) Bill

    The Court Proceedings (Electronic Technology) Bill (the “Bill”) made its way through the second and third reading on 17 July 2020, being the last bill passed by LegCo before it was released for summer recess. One of the objects of the Bill is to provide for the use of technology in relation to court proceedings as an alternative to conventional paper-based methods. (See Article)

    Aug 4, 2020 6:32 AM

  • Hong Kong passed bills to help grow the insurance sector

    On 17 July 2020, the Hong Kong Legislative Council passed the Insurance (Amendment) Bill 2020 and the Insurance (Amendment) (No. 2) Bill 2020. The two bills seek to amend the Insurance Ordinance (Cap. 41) in order to create new business opportunities for the insurance sector. Key changes introduced by the two bills are (a) to provide for a new regulatory regime for the insurance-linked securities business, (b) to expand the scope of insurable risks of captive insurers set up in Hong Kong, and (c) to enhance the regulatory framework for the regulation and supervision of insurance groups where a holding company of the group is incorporated in Hong Kong. (See Article)

    Aug 3, 2020 6:32 AM

  • Post-employment compensation – is it taxable?

    When an employment relationship comes to an end, it is not unusual for the employer and the employee to negotiate and enter into a separation agreement to put in writing the employee’s benefits, entitlements and post-employment obligations. It may be within the leaving employee’s expectation that most of the payments under the termination agreement (such as accrued salary, payment in lieu of notice and annual leave pay) would be subject to salaries tax, but is this really the case for all compensation/benefits received from the employer after termination of employment? (See Article)

    Jul 31, 2020 8:32 AM

  • Hong Kong Competition Commission accepts commitments by OTAs on removal of price parity clauses

    On 13 May 2020, the Competition Commission of Hong Kong (the Commission) accepted commitments from three hotel booking platforms (known as online travel agents or OTAs) to remove parity clauses relating to room prices, conditions and availability from their contracts with accommodation providers, and not to enforce such obligations directly or indirectly. This is the first time the Competition Commission accepted voluntary commitments under the procedure set out in section 60 of the Competition Ordinance (Cap. 619) (the Ordinance). (See Article)

    Jul 30, 2020 6:32 AM

  • China vows "zero tolerance" towards financial fraud in the capital markets

    The Central People’s Government has called for "zero tolerance" towards financial fraud in the Mainland capital markets and has pledged to clamp down on major capital market violations, following a recent meeting held by the Financial Stability and Development Committee (FSDC) under the State Council presided over by Vice-Premier Liu He. (See Article)

    Jul 29, 2020 8:32 AM

  • HK - COVID-19: 9 key points on the HK Government’s COVID-19 Online Dispute Resolution Scheme

    The Hong Kong Department of Justice has officially launched the COVID-19 Online Dispute Resolution (‘ODR’) Scheme on 29 June 2020. As previously introduced in our article, the Scheme aims to support individuals / businesses affected by COVID-19 in resolving disputes through negotiation, mediation and arbitration, in relation to disputes with a monetary value below HK$500,000. (See Article)

    Jul 28, 2020 6:32 PM

  • Executive Order 13936, Hong Kong, and China Section 301 Duties

    Pursuant to the United States-Hong Kong Policy Act of 1992, the U.S. has afforded Hong Kong with special status as compared to the People’s Republic of China (“China”). In response to China’s imposition of national security legislation on Hong Kong, the President issued Executive Order 13936 ("EO 13936") (July 14, 2020), suspending special status under certain U.S. laws. This article analyzes whether the suspension of special treatment with respect to 19 U.S.C. §1304 will subject goods of Hong Kong to the additional duties currently imposed on Chinese goods pursuant to Section 301 of the Trade Act of 1974 (“Section 301 Duties"). (See Article)

    Jul 28, 2020 6:32 AM

  • Hong Kong Implements New National Security Law - Hong Kong has recently implemented a national security law that aims to safeguard national security and uphold the policy of "One Country, Two Systems."

    On June 30, 2020, the Standing Committee of the National People's Congress of the People's Republic of China passed the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region ("National Security Law"). This took effect at 11 p.m. on the same day. The National Security Law applies to, inter alia: (i) offences committed within Hong Kong; (ii) offences committed by Hong Kong permanent residents and entities (whether in or outside Hong Kong); and (iii) offences committed against Hong Kong by non-permanent residents from outside Hong Kong. An offence is deemed to be committed within Hong Kong when an act constituting the offence or the consequence of the offence occurs in Hong Kong. (See Article)

    Jul 24, 2020 6:33 AM

  • Chinese Anti-Monopoly Regulator Unconditionally Approves First Merger Control Filing Involving Variable Interest Entity (“VIE”) Structures

    On July 22, 2020, China’s State Administration for Market Regulation (“SAMR”) published its unconditional approval of the concentration of operators in the Shanghai Mingcha Zhegang Management Consulting Co., Ltd. and Huansheng Information Technology (Shanghai) Co., Ltd. Newly Established Joint Venture Case (the “SMZ Case”). This is a major regulatory development in China in relation to the legitimacy of the VIE structure... (See Article)

    Jul 22, 2020 6:32 PM

  • IRD Publishes DIPN 61 on Profits Tax Exemption for Funds

    On 30 June 2020, the Hong Kong Inland Revenue Department (IRD) published Departmental Interpretation and Practice Note No. 61 (DIPN 61) on the Profits Tax Exemption for Funds. DIPN 61 clarifies the IRD’s interpretation and application of the profits tax exemption for funds that became effective on 1 April 20191 (Unified Funds Exemption). Prior to the introduction of the Unified Funds Exemption, an exemption from profits tax was only available to offshore private funds. Following the introduction of the Unified Funds Exemption, all funds, regardless of domicile, structure or location of management, benefit from the tax exemption for profits arising in or derived from business carried out in Hong Kong, provided that certain conditions are met. (See Article)

    Jul 22, 2020 4:32 PM

  • Immigration Developments: Hong Kong Normalization and US Visa Updates

    In immigration developments the week of July 13, an executive order makes persons born in Hong Kong chargeable to Mainland China for immigrant visa purposes; the policy preventing F-1 and M-1 international students from attending college fully online was abandoned... (See Article)

    Jul 22, 2020 6:32 AM

  • President issues executive order eliminating Hong Kong's preferential treatment

    On 14 July, the same day the president signed into law the Hong Kong Autonomy Act (the act), President Trump issued the Executive Order on Hong Kong Normalization (the EO) directing federal agencies to impose a range of trade and other restrictions on Hong Kong in response to China's new National Security Law. The administration has expressed concerns that the new National Security Law will effectively end Hong Kong's autonomy by enabling Chinese authorities to exercise expansive emergency authority in Hong Kong in connection with activities that they deem to be acts of secession, subversion, terrorism, and/or collusion with a foreign country. Please see full Publication below for more information. (See Article)

    Jul 22, 2020 6:32 AM

  • Changes to Hong Kong’s Discrimination Ordinances: What Employers Need to Know

    In June 2020, Hong Kong passed the Discrimination Legislation (Miscellaneous Amendments) Ordinance 2020 (“Amendment”), amending the Sex Discrimination Ordinance (SDO), the Race Discrimination Ordinance (RDO), the Disability Discrimination Ordinance (DDO), and the Family Status Discrimination Ordinance (FSDO). Except for a prohibition against breastfeeding discrimination, which will become effective on 19 June 2021, all other amendments came into effect on 19 June 2020. Below is a summary of the key changes and suggestions for employers. (See Article)

    Jul 21, 2020 6:33 AM

  • The Law of the PRC on Safeguarding National Security in the HKSAR: Business Impact in Hong Kong

    On the evening of 30 June 2020, the Hong Kong Government gazetted the Law of the People's Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (NSL) with the new law taking immediate effect that day. In addition, on 6 July 2020, the Chief Executive, in conjunction with the National Security Committee, exercised her powers under Article 43 of the National Security Law to make implementation rules for law enforcement agencies. As such, the Operating Principles and Guidelines for Application for Authorization to Conduct Interception and Covert Surveillance (Operating Principles and Guidelines), and the Implementation Rules for Article 43 of NSL (Implementation Rules) have both been adopted and now have the force of law. Please see full Publication below for more information. (See Article)

    Jul 15, 2020 8:32 AM

  • Hong Kong Regulatory Update - July 2020

    This update provides an overview of key regulatory developments in the past three months relevant to companies listed, or planning to list, on The Stock Exchange of Hong Kong Limited (HKEx), and their advisers. In particular, it covers amendments to the Rules Governing the Listing of Securities on HKEx (Listing Rules) as well as announcements, guidance and enforcement-related news from HKEx and the Securities and Futures Commission (SFC). From time to time it will also cover other recent market developments. We do not intend to cover all updates that may be relevant, but we welcome feedback, so please contact us if there are other topics of interest you’d like us to cover in the future. (See Article)

    Jul 14, 2020 4:33 PM

  • Departments of State and Commerce Announce Policy Changes to US Export Laws in Response to Hong Kong National Security Law

    On June 30, 2020 at 11:00 PM Hong Kong time, the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (HK National Security Law) took effect. (See Article)

    Jul 13, 2020 6:33 AM

  • Hong Kong Corporate Insights | June 2020

    On 18 June 2020 the HKEx announced plans to launch the HKEX Sustainable and Green Exchange (STAGE), a new information platform which will act as a central hub for data and information on sustainable and green finance investments in Asia. Please see full Publication for more information. (See Article)

    Jul 10, 2020 8:32 AM

  • Hong Kong opens the door to insurance-linked securities business

    With the sharp rise in the number of natural and other large-scale catastrophic events in recent years and the challenges posed by climate change, the demand for innovative solutions in risk management is driving changes to the traditional reinsurance model. Insurance-linked securities (ILS) first came on the market around two decades ago and since then the market has grown rapidly, with global issuance reaching approximately US$11 billion by 2019. Please see full Publication below for more information. (See Article)

    Jul 10, 2020 6:33 AM

  • PRC Enterprises’ Bond Offering in Hong Kong

    Under this structure, the onshore entity will directly issue the bonds offshore, typically to a trustee who will hold these bonds on behalf of the investors and act as their representative to exercise the investors’ rights under the bonds. The terms for these bonds will depend on the international credit rating of the onshore entity. (See Article)

    Jul 9, 2020 6:33 AM

  • Key Regulatory Developments in Hong Kong and Singapore: June 2020

    Regulators seek to expand market connectivity for wealth management products and enhance financial institutions’ environmental risk management. This blog post summarises key regulatory developments in Hong Kong and Singapore during June 2020, including... (See Article)

    Jul 8, 2020 6:32 AM

  • The New National Security Law for Hong Kong Takes Effect

    On June 30, the Standing Committee of the National People’s Congress (the “Standing Committee”) in the People’s Republic of China (“China”) unanimously passed The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (the “Law”). Later that day, the Law was inserted into Annex III of the Basic Law, the mini constitution of the Hong Kong Special Administrative Region (“Hong Kong”), gazetted for promulgation in Hong Kong and took effect at 11:00 p.m. Hong Kong time. At that point, the Law, comprising six chapters and 66 articles, was published for the first time. (See Article)

    Jul 7, 2020 6:32 AM

  • Hong Kong National Security Law Promulgated, Came Into Effect June 30, 2020

    As widely reported, the Standing Committee of the National People’s Congress (the “NPC”) completed its deliberation of and formally promulgated the Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region (the “HKNSL” or the “Law”) on June 30, 2020, and the Law was gazetted for promulgation in Hong Kong and took effect at 11 pm the same day... (See Article)

    Jul 2, 2020 8:32 AM

  • Hong Kong: A New Limited Partnership Fund Regime for Private Equity Real Estate Funds and other Private Equity Funds

    Hong Kong has taken a further step towards establishing itself as a leading fund formation jurisdiction with the passing of the Limited Partnership Fund Ordinance which is expected to become effective on 31 August 2020, to provide for the registration of limited partnership funds (“LPFs”). This has been welcomed by managers of private equity funds based in Hong Kong and those based in Mainland China (particularly those funds managing inbound investments financed by international investors via an offshore fund structure). (See Article)

    Jun 30, 2020 6:33 AM

  • The Unfolding Shape of the New National Security Law for Hong Kong

    Following the decision taken by China’s National People’s Congress to adopt a new national security law (the “Security Law”) for the Hong Kong Special Administrative Region (“Hong Kong”) on May 28, the Standing Committee of the National People’s Congress (the “Standing Committee”) met recently for the first time to consider the terms of the new legislation. There had been speculation that the draft Security Law would be published at the conclusion of the Standing Committee session on June 20 to allow for a brief period of consultation on the proposed legislation. That publication did not occur and latest reports in Hong Kong suggest that the Security Law will be passed by the Standing Committee on June 30 and only then will the law be published. (See Article)

    Jun 24, 2020 6:33 AM

  • Top five reasons for rejection of HKEX listing applications – and how to avoid them

    Since 2013, the Stock Exchange of Hong Kong Limited (the “Exchange”) has been publishing decisions on reasons for rejection of listing applications to provide greater transparency to the market. Prior to that, the Exchange published selected rejection letters or listing decisions, but they did not cover every rejected application. Based on these published letters and decisions, we have quantitatively compiled the top reasons for rejection. These serve as a guidance to listing applicants and sponsors alike on what the real issues are when handling listing applications, and as a more in-depth look at the Exchange’s stance towards certain issues. Please see full article below for more information. (See Article)

    Jun 18, 2020 8:32 AM