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LCQ12: Doing Business 2012 Report

     Following is a question by the Hon Abraham Shek Lai-him and a written reply by the Secretary for Development, Mrs Carrie Lam, in the Legislative Council today (December 7):


     The World Bank Report "Doing Business 2012" assesses regulations affecting domestic firms in 183 economies from June 2010 to May 2011 and ranks the economies in 10 areas of business regulation including "Registering Property" and "Resolving Insolvency".  In this report, Hong Kong once again ranks second in the overall "Ease of Doing Business" ranking.  In this connection, will the Government inform this Council:

(a) given that Hong Kong ranks 57th in the area of "Registering Property" and the ranking is relatively low as compared with that in other areas, what special measures the Government will introduce to shorten the number of days required for the execution of Sale and Purchase Agreements as well as filing the Agreements at the Land Registry; and

(b) given that Hong Kong ranks 16th in the area of "Resolving Insolvency", and the ranking has dropped as compared with that of 15th last year, what measures the Government will introduce to reduce the cost required to recover debts, increase the debt recovery rate and shorten the time involved in insolvency proceedings?



     Hong Kong remains as the second easiest place to do business in the world according to the World Bank's Doing Business 2012 Report (the Report) released on October 20, 2011.  The Report compares the ease of doing business in 183 economies by focusing on 10 constituent indicators.  The Report is meant to encourage reform and measures to facilitate business and reduce excessive regulation.

     Hong Kong has become a top economy on the ease of doing business in recent years.  The Government has been studying the Doing Business Report carefully to identify scope for improvement and continues to improve our business environment and competitiveness through regulatory reforms, notably in "dealing with construction permits", "starting a business" and "getting electricity".  We will continue to explore ways to improve the business environment by partnering with the business sector to ensure that regulation is appropriate.

     The reply to the two-part question is as follows:

(a) According to the Report, 36 days are required for registering property in Hong Kong.  Regarding the procedures directly under the control of Government departments, namely, conducting a land search, registering the sale and purchase agreement with the Land Registry (LR), payment of stamp duty with the Stamp Office and registering the assignment document, the time taken is four days according to the methodology of the World Bank survey, and can in actual practice take a shorter time as some procedures can be done concurrently.  We compare favourably with other advance economies in terms of service accessibility, efficiency and costs of service.  The remaining time for property registration is attributable to conveyancing procedures taken by solicitors, for example, to prepare and execute the sale and purchase agreement, to examine title deeds and perform title requisitions, and to prepare and execute the deed of assignment.

     As part of its on-going efforts to improve service quality and efficiency, LR launched a new search system in August 2010 with online search service extended from 16 hours to 20 hours daily to further facilitate property transaction.  LR will also release an enhanced version of the e-memorial form in early 2012.  The enhanced form will feature automated functions to promote efficiency and accuracy in completion, which helps shorten the time required for processing property transactions.

     The Government will continue to explore ways to further improve the property registration mechanism.  In particular, we have been working to replace the current deeds registration system with a title registration system commonly adopted in other common law jurisdictions.  The deeds registration system now in use in Hong Kong requires examination of title deeds by solicitors.  Under the title registration system, the title register will be conclusive evidence of the title to the property and hence conveyancing procedures will be simplified.  We are working closely with the stakeholders on the details of the proposed system with a view to introducing the new regime as soon as possible.  We will consult the Legislative Council on the necessary legislative amendments as and when appropriate.

(b) The ranking of Hong Kong in "resolving insolvency" slips slightly from 15th to 16th in the Report largely due to the improvement in the performance of other economies in that area.  To ensure that Hong Kong's corporate insolvency regime keeps up with international developments and to consolidate Hong Kong's status as an international financial centre, the Financial Services and the Treasury Bureau (FSTB) has recently rolled out a new exercise to modernise Hong Kong's corporate insolvency law.  The exercise will aim at streamlining and rationalising company winding-up procedures having regard to international experience, with a view to facilitating more efficient administration of winding-up and increasing protection of creditors.  FSTB aims at completing the modernisation exercise within the 2012-16 Legislative Council term.  The Panel on Financial Affairs has been consulted on the proposed exercise at its meeting of November 7, 2011.

Ends/Wednesday, December 7, 2011
Issued at HKT 14:31


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