Hong Kong as an ideal hub for deal-making
A strong legal infrastructure
- Hong Kong is a Special Administrative Region of China. Under the Basic Law which provides for the principle of “One Country, Two Systems”, Hong Kong enjoys a high degree of autonomy and retains its own common law legal system. Hong Kong is the only common law jurisdiction in China. Courts in Hong Kong exercise independent judicial power, including the power of final adjudication.
- The Judiciary in Hong Kong has the best quality judges maintained. Non-permanent judges from other common law jurisdictions of the Court of Final Appeal are of eminent reputation and are well respected in the international legal sector.
- Hong Kong Courts have built up a well-established commercial case law archive that is widely recognised by the international business community.
- There are over 1,500 practising barristers and 10,000 practising solicitors in Hong Kong. Barristers are self-employed in Chambers whereas solicitors work in over 900 Hong Kong law firms. On the other hand, a significant portion of solicitors work as in-house lawyers in different companies and government/statutory bodies. (Please click here for more information)
- Presence of major international law firms and reputable international Law-related Organisations can be found in Hong Kong. (Please click here for more information)
- Under the Basic Law, Hong Kong is authorised to conduct relevant external affairs. Using the name "Hong Kong, China", Hong Kong may also maintain and develop relations and conclude and implement agreements with foreign states and regions and relevant international organizations in the appropriate fields, for instance, economic, trade, financial and monetary.
- There are over 260 multilateral treaties which apply to Hong Kong. Hong Kong also entered into a number of bilateral international agreements with foreign jurisdictions. For example, Hong Kong has entered into free trade agreements or arrangements with the Mainland, New Zealand, European Free Trade Association, Chile, Macao SAR, ASEAN, Georgia and Australia as well as investment promotion and protection agreements with over 20 jurisdictions. (Please click here for more information)
- Hong Kong is a member in its own rights to a number of international organisations, for example, it is a founding member of the World Trade Organization (WTO), as well as a member of Asia-Pacific Economic Co-operation (APEC), Asian Development Bank (ADB) and Asia Infrastructure Investment Bank (AIIB).
- In addition to the Chinese language, English language is also stated by the Basic Law as an official language, which is extensively used by the executive authorities, legislature and judiciary of the Hong Kong Government. All legislation in Hong Kong is enacted in both Chinese and English, and both versions are accorded equal status.
- The judgments and awards of the Hong Kong High Court and above may be enforced in most common law jurisdictions and, in consequence of international agreements and arrangements, in a number of foreign jurisdictions. Reciprocal arrangements exist for the enforcement in Hong Kong of the judgments of the superior courts of those jurisdictions that will enforce Hong Kong's judgments.
- Hong Kong has been world’s freest economy – Hong Kong has ranked first in terms of economic freedom for 25 years according to the Heritage Foundation until 2020.
- Hong Kong was ranked No.4 globally on the ease of doing business according to the World Bank Group's Doing Business 2019 Report.
- Freedom of contract is well established in Hong Kong, businesses can freely enter into bespoke agreements to fit their specific needs. A contract is generally accepted to be valid by Hong Kong Courts unless it is for an illegal purpose or is otherwise contrary to public policy.
- Hong Kong’s foreign exchange regulations has minimal restrictions. For both movable and immovable properties, securities and most investments in Hong Kong, they can be bought and sold by anyone, without nationality restriction.
- Hong Kong has a strong and well-regulated financial sector supported by free press, free flow of information. Hong Kong is also home to most major financial institutions and banking corporations.
- Hong Kong maintains a simple and low taxation system. For instance, there is no estate duty, no Capital Gains Tax, no VAT in Hong Kong, which makes Hong Kong as an attractive venue for international transactions and wealth/asset management centre.
- Hong Kong has enjoyed abundance of professionals of different practices with international experience.
- Save for exceptional circumstances as prescribed by law, a Hong Kong company is treated as a separate person in law and therefore shareholders can limit his liability in the operation of a business.
- Unlike other jurisdictions, there is no nationality requirements regarding formation of company in Hong Kong. The registered office of a Hong Kong company must however be situated in Hong Kong.
Legal Gateway to China and the Belt and Road
- Hong Kong enjoys a close proximity to the Mainland, which makes Hong Kong an ideal choice for the resolution of Mainland-related disputes.
- The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is a free trade arrangement signed between the Mainland and Hong Kong in 2003. CEPA is an open and developing free trade arrangement, while the scope and content of CEPA had been expanded over the years.
- Under CEPA, Hong Kong law firms can form Joint Venture firms with PRC law firms to provide one-stop legal services to international clients. There are 11 such Joint Venture law firms in Guangdong province. Hong Kong Barristers may also be employed as Consultants in Mainland enterprises.
- Outline Development Plan (ODP) for the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) was announced on 18 February 2019. The ODP stresses the consolidation and enhancement of Hong Kong’s status as an international financial, transportation and trade centres. On the other hand, the ODP calls for the strengthening of Hong Kong’s role as an international asset management and risk management centre. The ODP also shows support for Hong Kong to establish itself as the centre for international legal and dispute resolution services in the Asia-Pacific region.
- The Belt and Road Initiative is a global development strategy adopted by the Chinese government in 2013 involving infrastructure development and investments in over 60 countries.
- Hong Kong legal services have extensive experience working with global investors, lenders and Governments in risk assessment and management and all legal issues relating to project finance, tendering, insurance, construction and operation. In particular, Hong Kong legal professionals can provide integrated legal advice for cross-border agreements and related services. Foreign entities may consider choosing Hong Kong Law as governing law of the contracts and selecting Hong Kong as an arbitral seat for resolving disputes arising from such contracts.
- In light of the above, Hong Kong can serve as an ideal hub for deal-making, especially for those related to the GBA and the Belt and Road Initiative.
- Please click here for more information about the Greater Bay Area and here for the Belt and Road Initiative