Memorandum of Understanding between Hong Kong Monetary Authority and Hong Kong Chinese Enterprises Association on setting up corporate treasury centres in Hong Kong (with photos)
The Hong Kong Monetary Authority (HKMA) and the Hong Kong Chinese Enterprises Association (HKCEA) today (November 22) entered into a Memorandum of Understanding (MOU) for a co-operation framework to help more Chinese enterprises to establish their corporate treasury centres (CTCs) in Hong Kong.
The HKMA and the HKCEA believe that more Chinese enterprises will "go global" and invest overseas under the further opening of the Mainland economy and the Belt and Road Initiative. By setting up CTCs, these enterprises can undertake liquidity and risk management and achieve cost-saving more effectively. As an international financial centre, Hong Kong has traditionally been a springboard for Mainland businesses to tap into global markets. Setting up CTCs in Hong Kong allows Chinese enterprises achieve synergistic benefits and bring about greater demand for local financial and professional services, and promote associated economic activities.
According to the MOU, the HKMA and the HKCEA will work together to promote better understanding among Chinese enterprises on CTCs and deepen their knowledge about the CTC-related policies in Hong Kong. For example, the Inland Revenue (Amendment) (No. 2) Ordinance 2016, gazetted and became effective in early June, revised the interest deduction rule in the Inland Revenue Ordinance and provided for a 50 per cent concessionary profits tax rate for qualifying CTCs. This helps create a conducive tax environment for CTCs in Hong Kong. Towards this end, the HKMA and the HKCEA will jointly organise a seminar on November 29 with Invest Hong Kong to facilitate experience sharing on the establishment and operation of CTCs.
The Chief Executive of the HKMA, Mr Norman Chan, said, "Hong Kong is Asia's premier location for business and treasury management, as well as a global financial centre and the world's leading offshore Renminbi business hub. We have a clear edge to become the preferred hub for CTCs in the region. Relevant amendments of the Inland Revenue Ordinance will attract more multinationals to centralise their treasury functions in Hong Kong. We look forward to working with the HKCEA to encourage more Chinese businesses to set up their CTCs here."
The Chairman of the HKCEA, Mr Yue Yi, said, "Many Chinese enterprises have already gained a solid footing in Hong Kong with diversified business. As they extend their global reach, Hong Kong's position as an international financial centre is increasingly leveraged to meet their investment and financing needs. As they are already well-conversant with the Hong Kong environment, the preference for setting up their CTCs here is quite obvious."
The HKMA is the government authority in Hong Kong responsible for maintaining monetary and banking stability. It was established in April 1993 by merging the Office of the Exchange Fund and the Office of the Commissioner of Banking.
The HKMA's policy objectives are:
- to maintain currency stability within the framework of the Linked Exchange Rate System;
- to promote the stability and integrity of the financial system, including the banking system;
- to help maintain Hong Kong's status as an international financial centre, including the maintenance and development of Hong Kong's financial infrastructure; and
- to manage the Exchange Fund.
Formed in March 1991, the HKCEA is a non-profit organisation mainly composed of Hong Kong-registered solely-owned Mainland enterprises and Mainland enterprises with Hong Kong and overseas shareholding. Currently, the HKCEA has more than 1 000 corporate members, including many major state-owned or state holding enterprises, provincial and municipal enterprises, as well as private enterprises.
Ends/Tuesday, November 22, 2016
Issued at HKT 17:45
Issued at HKT 17:45