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Following is the speech by the Financial Secretary, Mr John C Tsang, at Deloitte's Asia Pacific International Core of Excellence launch reception today (June 7):
Joseph (Lo, Chairman, Deloitte China), distinguished guests, ladies and gentlemen,
Good evening.
It is my great pleasure to join you today. Congratulations on the launch of Deloitte's Asia Pacific International Core of Excellence (AP-ICE).
Also, thank you for choosing Hong Kong as the home-base for AP-ICE.
We are delighted that Deloitte is making such a major investment here, and we welcome your commitment to Hong Kong and your confidence in our city.
There are a number of very good reasons that Hong Kong is the number one asset management centre in Asia, as well as the ideal launching pad for your centre of excellence initiative.
Hong Kong's free and open economy is buttressed by the rule of law and an independent judiciary. We are the international gateway to the Mainland of China.
We have a simple and transparent tax regime and a low tax rate, no restrictions on the flow of capital, and we have a deep and broad pool of local and overseas financial talent. Our civil service is clean and efficient, and we maintain zero tolerance of corruption.
In 2008, our combined fund management business totalled US$750 billion, some 65% of which was sourced overseas.
Last year, Hong Kong ranked number one in the world for IPO funds raised. Total IPO funds raised here last year exceeded US$30 billion. Also last year, Hong Kong was ranked as the freest economy worldwide by the US-based Heritage Foundation, and as the most sophisticated financial market by the World Economic Forum.
To maintain our competitiveness and potential for growth in the long run, the Government is constantly striving for an even more investor-friendly business environment. One area in which we are making rapid progress is the avoidance of double taxation.
For some time, we have been pursuing comprehensive double taxation agreements, or CDTAs, with major trading and investment partners. We recently amended our tax laws to enable Hong Kong to adopt the prevailing exchange of information (EoI) standard of the OECD.
This amendment has added momentum to our CDTA work. By end-March, just two months after our taxation amendments came into effect, we had already signed CDTAs incorporating this latest international EoI standard with half a dozen countries. We are discussing similar arrangements with other trading partners and more CDTAs are expected to be signed soon.
Pursuing a more favourable business environment for our foreign trading partners alone is not good enough for Hong Kong. We also have to enhance our competitiveness and expand our role as the Mainland's financial gateway to the world.
Just last month, we reached agreement with the Central People's Government on further liberalising trade in services between us. We will also strengthen co-operation in trade and investment facilitation under CEPA, our unique free trade pact with the Mainland.
The new measures under CEPA provide for 35 market liberalisation and trade and investment initiatives in 19 sectors. They also further relax the market access conditions in 14 services sectors, including the banking and securities sectors.
For example, a Hong Kong bank with a representative office in the Mainland for more than one year can apply to set up a wholly foreign-funded bank or a foreign bank branch.
A Hong Kong bank's operating institution on the Mainland can apply to conduct renminbi business, as long as it meets certain profitability requirements. Foreign banking institutions established on the Mainland by Hong Kong banks can also establish specialised institutions to provide financial services to small enterprises.
On securities, Hong Kong and the Mainland will deepen co-operation in financial services and product development. Also, open-end index-tracking exchange-traded funds or ETFs constituted by Hong Kong listed stocks will be launched on the Mainland at an appropriate time.
Overall, the latest expansion of CEPA will further consolidate Hong Kong's status as an international business and financial centre.
Ultimately, it is the private sector, with its entrepreneurship and market responsiveness, which makes Hong Kong a vibrant financial capital of Asia.
The launch of Deloitte's AP-ICE initiative is a good example of how the private sector can contribute to the development of the regional investment environment.
AP-ICE brings together accounting talent, knowledge and expertise from around the world to better serve global investors, smoothing their way to invest in the Asia Pacific Region.
It only remains for me to welcome the AP-ICE team of more than 20 professionals from 15 tax jurisdictions to Hong Kong. I wish you all every success with this initiative, and hope that you have a wonderful experience here in Asia's world city.
Thank you.
Ends/Monday, June 7, 2010
Issued at HKT 19:05
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