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HKCBA Calgary Chapter
“Using Hong Kong as a Gateway to China”
Daniel Booth
Vice-President
ICS TRUST (ASIA) LIMITED
8th Floor Henley Building Tel: (852) 2854 45445 Queen’s Road, Central Fax: (852) 2543 5555Hong Kong Email: ics@icstrust.com
Web: www.icstrust.com
20th October 2006
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 2
O p e n y o u r d o o r s t o A s i a
Why Hong Kong?Why Hong Kong?
“the strategic gateway for Asian business”
Hong Kong - is the bank
China - is the world’s factory
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 3
O p e n y o u r d o o r s t o A s i a
The Hong Kong AdvantageThe Hong Kong Advantage
• A reliable legal system
• Lower risk profile
• Developed banking and financial system
• Attractive tax system
• World class infrastructure
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 4
O p e n y o u r d o o r s t o A s i a
A Reliable Legal SystemA Reliable Legal System
• Based on familiar British common law system
• Transparent
• Effective legal institutions
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 5
O p e n y o u r d o o r s t o A s i a
Lower Risk ProfileLower Risk Profile
• An effective and efficient firewall• Protection of intellectual property rights• Transparency of the companies ordinance
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 6
O p e n y o u r d o o r s t o A s i a
Lower Risk ProfileLower Risk Profile
Alberta Company888 Inc.
Hong Kong Company 888 (Hong Kong) Limited
WFOEPRC
Representative Office
4. Hire Quality Control people 5. Hire Engineers 6. Hire Managers to liaise with
factories and Head office re purchases / shipment
7. Negotiation of business contacts & strategic alliance agreements with PRC Companies
1. Manufacturing 2. Trading 3. Selling domestically
where permitted
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 7
O p e n y o u r d o o r s t o A s i a
Developed Banking & Financial SystemDeveloped Banking & Financial System
Hong Kong is… ...the world's ninth largest
international banking centre
...host to:71 of 100 largest banks represented in Hong Kong
131 licensed banks
Additional 85 represented offices of foreign banks from 31 countries
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 8
O p e n y o u r d o o r s t o A s i a
Attractive Tax SystemAttractive Tax System• Territorial tax system – Onshore / Offshore
• Corporate tax of 0-17.5% on profits
• Maximum personal tax rate of 16%
• No capital gains tax
• No withholding tax
• No VAT or sales tax
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 9
O p e n y o u r d o o r s t o A s i a
Comparison of Taxes by JurisdictionComparison of Taxes by Jurisdiction
Canada
Gross Profit USD100,000
Expenses (40,000)
Net Profit before Tax 60,000
Tax (approximately) 45% (27,000)
Net Profit after Tax USD 33,000
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 10
O p e n y o u r d o o r s t o A s i a
Comparison of Taxes by JurisdictionComparison of Taxes by Jurisdiction
Hong Kong
(Onshore)
Gross Profit USD100,000
Expenses (40,000)
Net Profit before Tax 60,000
Tax 17.5% (10,500)
Net Profit after Tax USD 49,500
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 11
O p e n y o u r d o o r s t o A s i a
Comparison of Taxes by JurisdictionComparison of Taxes by Jurisdiction
Hong Kong
(Offshore)
Gross Profit USD100,000
Expenses (40,000)
Net Profit before Tax 60,000
Tax 0% (0)
Net Profit after Tax USD 60,000
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 12
O p e n y o u r d o o r s t o A s i a
YOUR COMPANYImporter (Canada) Inc
L/C VENDOR /FACTORY
In AsiaInvoice
YOUR CUSTOMER[e.g. Walmart]
Direct shipment of goods from vendor/factory to customer
YOUR NEW HK CO.
Imports (H.K.) Ltd.
L/C
Invoice
Payments$ Payments $
cc. Purchase Order
PO PO
Direct Import ProgramDirect Import Program
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 13
O p e n y o u r d o o r s t o A s i a
World-Class InfrastructureWorld-Class Infrastructure
Container Port:
handled 21.93 million TEUs in 2004, making it the world's busiest port.
Hong Kong International Airport:
is one of the world's busiest airports processing about 36 million passengers and 3 million tonnes of air cargo per year.
Road:
1,831Km of highway, with direct road links to entire Pearl River Delta region
Rail
Direct links to Guangzhou, Shanghai and Beijing
Territory-wide rail carrying 2.4 million passengers daily
Communications
Broadband Internet connection is available to over 98% of households and more than 95% of business buildings.
Household penetration rate is 62%
Workforce
High percentage of Bachelor Degree level or above
Easy access to English speaking staff
© ICS TRUST (ASIA) LIMITED. All rights reserved. Page 14
O p e n y o u r d o o r s t o A s i a
3 Key Sound-Bytes To Take Away3 Key Sound-Bytes To Take Away
Why do business in Hong Kong?
Hong Kong is a well developed, low-risk option for SMEs and Entrepreneurs.
Hong Kong offers a familiar, efficient, and business-friendly environment.
Hong Kong - it’s your reliable gateway to China!
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