According to the World Bank's 'Doing Business 2016
Report', Hong Kong continues to be one of the world's
easiest places to do business, and tops the ranks in Asia Pacific
for starting one. To sustain its economic growth and
competitiveness, the Hong Kong government underwent three key
changes in 2015: the statutory minimum wage (SMW), Competition
Ordinance and Foreign Account Tax Compliance Act (FATCA).
Mark O'Sullivan, Managing Director of TMF Hong Kong,
outlines the key changes that every company operating in Hong Kong
Statutory minimum wage
From May last year, employers that were paying their staff an
hourly wage had to meet the revised statutory minimum wage rate of
HKD32.5 per hour. The aim of the SMW regime was to strike an
appropriate balance between forestalling excessively low wages and
minimising the loss of low-paid jobs.
The Competition Ordinance (Ordinance) came into a full effect on
14 December 2015 with the aim to maintain a free and level playing
field for businesses. According to the Competition Commission,
more consumers would be supplied with goods and services at the
best quality and price where there is competition. Local SMEs also
benefit from the increased market opportunities and reduced
Under the Ordinance, anti-competitive conducts, such as price
fixing, market allocation, output restriction and bid-rigging are
prohibited. The Competition Tribunal has a broad‐range of
sanctions available to levy against a contravening where rules are
broken. These include a pecuniary penalty that is up to 10% of the
turnover of the undertakings involved, for up to three years in
which the contravention occurs, director disqualifications,
prohibition, damage and other orders.
Foreign Account Tax Compliance Act
In 2014, a Model 2 intergovernmental agreement ("IGA")
was signed between Hong Kong and the United States of America,
implementing FATCA to help minimise the compliance burden of FATCA
on HK financial institutions.
Companies or professionals may consult their financial
institutions or seek advice to complete a self-certification and
Form W-8 for the collection of information and documents, as well
as the financial assets held by their institutions.
FATCA also impacts many other entities outside of the
traditional financial services sector, with operations both in and
outside of the United States.
Standard working hours and the automatic exchange of financial
account information are the two main areas the Hong Kong government
will focus on in 2016.
The Standard Working Hours Committee was organised in April
2013. The committee is now continuing to explore the directions of
a working hour policy applicable to Hong Kong.
As the subject of working hours carries widespread and
significant implications for the overall labour market, manpower
demand, employment relations, economic development and business
competitiveness, it is important for companies to keep up to date
with relevant legislation.
Hong Kong will put in place a legal framework and administrative
system to implement the automatic exchange of financial account
information (AEOI). The Inland Revenue Department (IRD) started a
formal consultation in April 2015; and plans to enact the AEOI
legislation in June 2016, issuing AEOI returns from January
Taxpayers should pay attention to AEOI developments to
understand their rights and obligations, and the best ways to
safeguard their privacy and confidentiality.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Confidentiality of corporate documents and information is one of
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company search of the BVI Registrar of Corporate Affairs will only
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When pursuing a debt, it is common to add a claim for interest on the monies due.
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