Britain in Hong Kong April 2013

April 2013 Vol 27 No 3

6 26 The Best of AsiaEmployers in Asia can Get More from Their Benefits

What Will the Year of the Snake Mean for China’s Built Environment?16

Hong Kong Budget 2013

Not For Sale

www.bri tcham.com

HONG KONGBritainIN

Contents12

Lifestyle: The Best of Asia26

3 Chairman’s Message

4 Hong Kong Budget 2013

6 Employers in Asia can Get More from Their Benefits

9 M&A in Fast Growing Countries

12 New Supply Chain Strategies for the ‘Asia Era’

14 The Rise of the Building Construction Sector in Hong Kong in 2013

16 What Will the Year of the Snake Mean for China’s Built Environment?

18 Who Stands to Inherit Your Wealth?

20 How Plain Language can Save You Time & Money

22 Talent Management is Critical as Employers Expect Skills Shortages to Escalate

24 Legal Q & A

26 Lifestyle: The Best of Asia

28 Sponsorship Announcement

30 Member Discounts

32 Recent Events

33 New Members

34 News & New Appointments

35 Shaken Not Stirred

Hong Kong Budget 20134New Supply Chain Strategies for The Asia Era

EditorSam Powney

DesignWinnie LiLilian YuKen Ng

Advertising ContactCharles Zimmerman

Project ManagementVincent Foe

Jointly Published by Speedflex Medianet Ltd andThe British Chamber ofCommerce in Hong Kong1/F, Hua Qin International Building340 Queen’s Road Central, Hong KongTel: 2542 2780Fax: 2542 3733Email: [email protected]: [email protected]: [email protected]

British Chamber of Commerce SecretariatExecutive DirectorCJA Hammerbeck CB, CBE

General ManagerCynthia Wang

Marketing and Communications ManagerEmily Ferrary

Special Events ManagerBecky Roberts

Events ExecutiveMandy Cheng

Business Development ManagerPhillippa Cook

Membership ExecutiveLucy Jenkins

AccountantMichelle Cheung

Executive AssistantJessie Yip

SecretaryYammie Yuen

Office AssistantSam Chan

© All published material is copyright protected. Permission in writing from the Publishers must be obtained for the reproduction of the contents, whole or in part. The opinions expressed in this publication are not necessarily the opinions of the Publishers. The Publishers assume no responsibility for investment or legal advice contained herein.

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Britain in Hong Kong

22 Talent Management is Critical as Employers Expect Skills Shortages to Escalate

24 Legal Q & A

26 Lifestyle: The Best of Asia

28 Sponsorship Announcement

30 Member Discounts

32 Recent Events

33 New Members

34 News & New Appointments

35 Shaken Not Stirred

As I write this message, Chinese New Year is a few weeks behind me; the Rugby Sevens’ weekend looms; Easter will follow shortly after. Life seems to be following its comforting seasonal pattern. And human beings love patterns!

In financial markets and the global economy more generally, “analysts” anxiously search for similarly comforting patterns. 5 years after the onset of the global financial crisis, smart people are still trying to spot “the new normal”; by which they mean the reemergence of a reliable new cycle, which will at least enable them to forecast with some level of confidence, even if it later proves to have been misplaced (the point is not necessarily to know where we are going, but to think that we do).

But what if there is no “new normal”? After all, the actions of finance ministers and central bankers for a decade at least now have been aimed at avoiding the pain of the downside

of economic cycles (Chancellor Brown had ended the business cycle, hadn’t he?). What if, in one sense at least, they have succeeded? What if there can no longer be any reliable “patterns” in economic activity? There is often comment on the inevitability of “unintended consequences” of government intervention. It seems possible that as governments have interfered with prices of almost every financial asset on the planet, they have undermined the natural cycles of business and economic life (an analogy with human impact on the global climate perhaps). So all these clever folks who try to use historic patterns in markets to work out how long the bear or bull market will last, or when the housing market will turn up again, may have a problem. If business cycles are history, their historical formulae may have no validity any more.

For those of us running businesses in what is quaintly called “the real economy”, the message must be very closely focused on the value-added of our businesses and the effectiveness of our staff. We cannot rely on a rising tide eventually lifting all boats, because the tide or may not come in. The key will be to ensure your boat is water tight, your crew well trained to withstand unexpected storms. The weather forecast can no longer give confidence when the data is no longer reliable (and assuming there will be a “bail out” is very risky!).

But with a good business, a tight ship and a focused crew, you have a good chance of staying afloat in most weathers. As you might guess from this extended nautical analogy, I am fresh back from a sailing holiday, which included “rounding the Horn”. Even in a rather large ship, you tend to be well aware of the 1,500 metres of water between you and the ocean floor, and of the 1,000 plus miles between you and any serious help. In such circumstances the soundness of the ship and the competence of the crew are all that matters. My sense is that as the S&P becomes more and more detached from the “real economy” we should attend ever more carefully to the soundness of our rigging and the skills of our crew.

Britain in Hong Kong 3

Nick Sallnow-Smith

Chairs of Specialist Committees

Business Angel ProgrammeNeil OrvayAsia Spa & Wellness Limited

Business Policy UnitTim Peirson-SmithExecutive Counsel

China CommitteeTim Summers

Construction Industry GroupDerek SmythGammon Construction

Education CommitteeStephen EnoBaker & McKenzie

Environment CommitteeAnne KerrMott MacDonald Hong Kong Limited

Financial Markets CommitteeRichard WinterQuam Limited

HR Advisory GroupBrian RenwickBoyden Search Global Executive

ICT IT CommitteeCraig ArmstrongStandard Chartered

Logistics CommitteeMark MillarM Power Associates

Marketing & Communications CommitteeAdam O’ConorOgilvy & Mather Group

Real Estate CommitteeJeremy SheldonJones Lang LaSalle

Scottish Business GroupJohn BruceHill & Associates

Small & Medium Enterprises CommitteeViktoria KishInternational Study Programmes

Strategic Supply Chain ForumDominic JephcottVendigital Limited

Women in Business CommitteeSheila DickinsonThe Fry Group

YNetwork CommitteeAlison Asome

MessageChairman’s

2

greater resources to sustain their long term competitiveness and growth.

With the budget in the last few years, there are no significant policies to support SMEs. The Hong Kong government could have done more in terms of tax breaks, profits tax and any other tax benefits that can support their growth as operating costs continue to rise.

Grant Thornton’s International Business Report (IBR) revealed that business in many economies would favour a lower corporate tax rate even if it means some of their tax deductions would be eliminated. In Hong Kong, however, up to half of the businesses express a preference for tax measures over a lower tax rate, compared to just 22% globally.

In a raft of proposals that the Financial Secretary, John C. Tsang, unveiled to improve people’s livelihoods and benefit the city’s overall economy in the 2013-14 government budget, he proposed a list of nine one-off relief initiatives similar to last year’s to accommodate the ongoing requests of Hong Kong’s citizens. However, there seems to be a slight mismatch in the policies announced to assist SMEs, middle class and younger workers.

All the one-off measures presented to improve the livelihoods of Hong Kong’s citizens are certainly welcomed. However, people expected more would be done to support SMEs, the middle class and younger workers in the longer term, and sustainable perspectives.

Also the business community would like to see tax and fiscal measures that would help Hong Kong enterprises who used to operate in mainland China, now wish to have the production lines returned to Hong Kong.

Supporting the long-term competitiveness of SMEs

SMEs are an important driving force in Hong Kong’s economic development. They constitute over 98% of the territory’s business units and account for an estimated 48% of private sector employment.

As major components of the city’s economy, SMEs deserve to receive more assistance and support from the government during hard economic times, as well as

Hong Kong Budget 2013Mismatched Remedies for Real Needs of SMEs, Middle Class and Younger Workers

William Chan, Tax Partner, Grant Thornton Hong Kong Limited

Tax Measures PreferencePrecentage of businesses in favour of lower coporate tax even if it meant eliminating some current tax deductions

Hong Kong

BRIC

United States

Mainland China

Asia Pacific (excl Japan)

Source: Grant Thornton IBR 2013 Yes Definitely No

Remarks: Percentage for rest of the respondents goes to “Yes, Probabily” & “Don’t Know”

12% 50%

44% 13%

41% 13%

55% 11%

47% 14%

C ove r S t o r y

It is reckoned that a rise in the allowance for maintaining a dependent parent or grandparent would benefit a lot more people in Hong Kong, as the birth rate is low and the aging population is a cause of unease. Widening the salaries tax income band would be another effective way to help most middle class taxpayers avoid falling into the next tax bracket, yet without narrowing the tax base at the same time.

A set of proposals to improve job training for the younger workers was announced. A new round of measures to stabilise the price of residential property has also recently come into effect. These would make it an opportune moment to include rent on the list of deductible items for salaries tax purposes. It would benefit young adults and encourage saving.

The year 2013 is widely expected to be a year of slow recovery. Uncertainties still linger about the world’s economy, while the euro zone and US continue to struggle with crises. With uncertainty ahead, businesses and individuals need the government’s support more than ever to get through this challenging period.

Since corporate tax in Hong Kong is already at a very low level, businesses are certainly looking to the government to do more with other tax measures, such as introducing waivers on the limit in charitable donations, separate tax rate or bands for SMEs or any other tax rebates that would help businesses reduce costs.

Adjustments on government tax policy would be a longer term mean of measure, and businesses would then have a better perspective for planning their financial position. The newly announced tax deduction however, does not help them so much.

Hong Kong’s tax system is simple; however, it might still be too complicated for SMEs to deal with, when considering their very l imited resources. Without professional knowledge and sufficient time, most of them have to abide whatever is requested by the Inland Revenue Department or other authorities. A simplification of the tax system especially for SMEs is top of the list.

More support for the reflux of Hong Kong enterprises

Although labour costs in recent years have drawn to a much similar level in mainland China and Hong Kong markets, rent has been the biggest stumbling block for most businesses, which has led to businesses considering leaving Hong Kong, usually for South East Asian countries with a much lower operating cost.

However, due to Hong Kong’s uniqueness in the market place and its accessibility to the China market, with a sound legal structure and business-friendly tax environment, a lot more of the overseas-based Hong Kong enterprises are actually considering coming back. There’s obviously something the government should do to re-attract these companies who are sceptical about the high cost environment.

For example, if a business has invested HK$1 million into expanding their production line, on top of the usual tax allowance, the government should consider offering HK$500,000 or HK$1 million in credit which can only be deductable when they have made a profit or have developed new production line. This would create a win-win situation for both the enterprises and the government in the long run.

These encouraging measures would attract more relocated Hong Kong enterprises to come back to the city, and this would certainly benefit the overall growth of Hong Kong’s economy and maintain its competitiveness as a regional business hub.

More suitable policies needed for middle class and young workers

While a rise in the child allowance from HK$63,000 to HK$70,000 will certainly help alleviate the pressure on some members of the middle class, the aging population should also be given consideration, as the government has pinpointed this as a major concern.

About Grant Thornton Hong Kong Limited

Grant Thornton Hong Kong Limited is a member firm of Grant Thornton International Ltd (Grant Thornton International). The firm is fully integrated with Grant Thornton China and be part of a network of 17 offices providing seamless access to 120 partners and over 2,400 professionals across mainland China and Hong Kong. For more information visit www.grantthornton.cn

Grant Thornton is one of the world’s leading organisations of independent assurance, tax and advisory firms. These firms help dynamic organisations unlock their potential for growth by providing meaningful, actionable advice through a broad range of services. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to solve complex issues for privately owned, publicly listed and public sector clients. Over 31,000 Grant Thornton people, across 100 countries, are focused on making a difference to clients, colleagues and the communities in which we live and work. For more information visit www.gti.org

About Grant Thornton International Business Report

The Grant Thornton Internat ional Business Report (IBR) provides insight into the views and expectations of more than 12,500 businesses per year across 44 economies. This unique survey draws upon 21 years of trend data for most European participants and 10 years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com


Stark Reality For Employers In Asia

The biggest challenge facing most employers across Asia today is finding and keeping high-quality, motivated employees. And a consequence of this challenge has been high salary growth across the region as employers seek to attract the best people by offering the most competitive financial rewards.

Employers in Asia are also more likely to pay employees irregular and ad hoc f inancial awards outside of the annual remuneration cycle, whether as sign-on bonuses, off-cycle promotions, special recognition or simply to keep staff through retention bonuses.

These rising salaries and ad hoc financial payments are not sustainable. Not only are they unaffordable b e y o n d t h e s h o r t t e r m , j o b s a re b e c o m i n g commoditised as competing organisations strive to match compensation offers. However, despite these higher salaries employees are feeling no more engaged or committed.

Employers in Asia can Get More from Their Benefits Spend for Less

In fact, a recent Mercer survey of 5,000 employees in Asia Pacific found that employees are showing reduced levels of engagement and commitment. One in every three employees in China and Hong Kong said they were actively looking to leave their employer, while two in every five employees in Australia and Singapore, and an astounding one out of every two in India said the same. This indicates high levels of “flight risk” among employees across the region, as they stay with their employer only until such time as another opportunity knocks.

Analysis of the survey results also showed that women who were dissatisfied with their employment were less likely to leave, indicating potentially high levels of “presenteeism” — the phenomenon of employees being at work but disengaged and unproductive. The number of dissatisfied female employees in India is particularly high — 81% of women surveyed.

In response to these trends, employers are increasingly looking to evolve their employee value propositions to offer a broader package of employee benefits beyond financial reward.

Employers across Asia face the grim reality of high employee turnover, declining engagement and widening talent gaps, and employees demanding higher salary increases.

The sustainability and effectiveness of simply paying more for talent is being questioned, with employers looking seriously at investing in alternative means of engaging and motivating employees.

According to Mercer Marsh Benefits experts, the key to cost-effective, competitive and attractive benefits lies in understanding employees and providing benefits that they truly value.

Gary Tok, Regional Sales Leader for

Mercer Marsh Benefits in Asia

B u s i n e s s

Benefits Aligned To Personal Needs — A Weapon To Win Employees

Financial rewards are a vital part of the employment deal. However, to win over employees — particularly with limited financial resources — organisations are considering a range of employee benefits that can be tailored to meet individual needs. These programs enable organisations to gain competitive differentiation and, when structured well, drive greater value out of the total investment in compensation and benefits in multiple ways:

• Supplementary medical, health and other insured benefits as well as retirement benefits can be negotiated on a group basis by the employer, rather than at the individual level by the employee. Depending on the program design, these benefits can be very attractive and engaging for certain groups. For example, some employers are looking at high-end medical insurance, travel insurance, pension plans and portable benefits — coverage that has typically been purchased by individuals, but not offered on a group basis. Leveraging the group purchasing power offers better value for money.

• Wellness programs and other health-related solutions may improve productivity, thereby improving an organisation’s bottom line. More sophisticated employers use these programs to create a culture of personal health within their organisation and in doing so are truly engaging their workforce.

• Benefits can be tailored for specific employee needs, offering choice and flexibility to make programs relevant to specific employee groups or individuals. However, it is not just about providing choice but offering a selection of benefits that are relevant to individuals at different life stages.

• Benefits can provide competitive differentiation by helping an organisation become recognised as an “employer of choice,” creating an employee value proposition that is less about employment price and more about employment value.

The critical success factor in designing a benefits program that cost-effectively achieves an organisation’s objectives is to ensure every benefit provided is driven by a real need and engenders a sense of value for employees. This means designing programs to “need” rather than to “benchmark.”

What Do Employees Value?

The importance employees place on various benefits is driven by where they live and what life stage they are experiencing. As employees progress through different stages, the importance placed on various benefits naturally changes.

Local legislation that governs employee entitlements (such as statutory retirement savings) also plays an influential role in what employees value.

According to Mercer’s 2011 What’s Working™ survey, among the elements that employees value across different geographies, base pay is ranked as the first or second most important element. This outcome is not surprising, given the fundamental need for financial stability.

However, there is a difference between employees in more mature Asian economies and those employed in emerging economies. For example, in China and India career advancement is valued more highly than base pay.It is likely these employees view career advancement as important to status and know that it will mean their salary will increase in the long term.

Interestingly, the survey also revealed that employees value non-financial factors. The type of work, training opportunities, flexible work arrangements and working for a respectable organisation are all highly valued

While financial factors such as benefits and incentive pay are important for attraction and retention, Mercer’s research shows that they are less effective when it comes to day-to-day motivation and engagement at work.

In Australia, the legislated superannuation system includes both retirement and health insured benefits, which means that employees focus on quality of life. Australian employees therefore place high importance on attributes such as type of work, flexible work schedule and working for a respectable organisation.

Mercer’s research also showed that many employees, particularly in growing Asian economies, would like to reduce the value of some benefits in order to increase attributes of an employment value proposition. In India, around 61% of employees indicated this preference and in China it was 51%. Similar numbers of employees also said they would be willing to use their own money to improve benefits that are important to them.

Demand is strong among employees for trading benefits that are not so relevant for benefits that are. In other words, most employees would prefer to be able to


choose their benefits depending on what they value most. A key contributor to this preference is life stage. For example, a 25-year-old single employee is unlikely to place the same value on long-term disability insurance as a 40-year-old parent with a mortgage who is also supporting elderly parents.

Employees view the total value of their rewards through a different lens to employers. While employers generally view the fragments of their employee value propositions in categories such as “pay,” “benefits,” “career” and “work/life,” employees view them as “my current value,” “my security and protection,” “my future value” and “my quality of life.”

Many Employers Are Missing A Golden Opportunity

Despite employees valuing different benefits and deriving greater value from choice and flexibility in their benefits, not many employers accommodate this.

Among survey respondents who do offer choice, medical and life insurance are among the most prevalent. Dependent, lifestyle and wellness benefits are also typically included under a flexible spending account. The benefits most commonly offered by respondents with an existing employee choice program are medical cover, dependent cover and health screening.

Striking The Right Balance To Make Benefits Matter

More employers are willing to offer choice in benefits to employees, but when asked why they do not, employers commonly replied that it is too costly to implement, too complex to administer and that internal resources were too limited to implement.

However, there are solutions available that strike the right balance between containing costs and improving performance.

To achieve best value, you must first understand the key cost drivers through claims analysis; identify opportunities to rationalise costs; look at innovative plan design, administrative cost savings and competitive premium rates; and take a planned approach to benefits design and communication.

To design a program that meets employees’ needs, rather than to take a one-size-fits-all approach, Mercer Marsh Benefits experts recommend a simple framework to guide employers:

Provide relevant choices to give your employees the flexibility they want.

Enhance choice to deepen the engagement with employees.

Reinforce the value of choice to individual employees.

Flexibility is a perception; start with the basics and develop it over time.

Optimise your benefits investment by designing for need, not only for benchmark.

Return on investment is justified through a robust business case.

Measure the impact of choice over time.

To seamlessly deliver the plan to employees, many scalable, web-based solutions are available. This makes it easy to manage a complex benefits program by simplifying content while promoting a culture of self-service.

The right solutions help employees truly understand the total value of rewards. For example, implementing a web-based solution that places a value on each component of the rewards program can provide managers with a powerful tool to use in value-based conversations with employees. It opens an employee’s eyes to how much the employer is investing in them, outside of base pay.

Structuring a rewards program well can ultimately drive greater value out of the investment in rewards, thereby containing costs for an employer. Importantly, it can enable an employer to effectively tackle its most challenging issue: attracting high-quality staff and moving the engagement needle.

For more information, please visit the Mercer website www.mercer-marsh-benefits.com or contact Gary Tok on +852 2301 7562 or at gary.tok @mercer.com.

IMPORTANT NOTICE: This document does not constitute or form part of any offer or solicitation or invitation to sell by either Marsh or Mercer to provide any regulated services or products in any country in which either Marsh or Mercer has not been authorised or l icensed to provide such regulated services or products. You accept this document on the understanding that it does not form the basis of any contract.

The availability, nature and provider of any services or products, as described herein, and applicable terms and conditions may therefore vary in certain countries as a result of applicable legal and regulatory restrictions and requirements.

Please consult your Marsh or Mercer consultants regarding any restrictions that may be applicable to the ability of Marsh or Mercer to provide regulated services or products to you in your country.

B u s i n e s s

Higher growth rates, i n c r e a s i n g d o m e s t i c consumer demand, access to natural resources, low cost manufacturing, deregulation of certain industries, innovation sk i l l s , and tax incent ives offered to foreign investors, etc. For all these reasons, emerging markets are viewed by foreign investors as an appealing and attractive proposition, especially when compared to mature economies.

However, the acquisition process AND the integration process is more complex in a fast growing economy. When assessing a potential acquisition in an emerging market, you cannot afford to take short cuts. It is important to:

• review the information provided from several angles to ensure consistency of answers provided

• undertake a ful l scope due dil igence process covering crit ical areas, possibly on a phased approach

• ensure your advisory team includes local experts and advisors, they have a far better understanding of local regulations and requirements as well as what is and isn’t accepted business practice.

Mazars’ recent study looks at close to 30 common issues arising in practice on acquisitions in each of the 15 countries* involved.

Main traps identified

• Reliability of the financial information

• Ownership and governance practices

• Regulatory and legal issues

Growth by cross-border acquisition is a major strategic response of many companies to a shifting and complex competitive environment, especially if there are limited domestic opportunities.

Jack Clipsham Partner – Head of Corporate Finance,

Mazars

M&A in Fast Growing Countries:Traps and Structuring Opportunities


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Quality of financial information ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Several sets of books ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚Non-compliance with labour laws and accounting consequences ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Hidden liabilities ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚Guarantees and other commitments granted to third parties ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚Lack of satisfactory ownership documentation or multiple ownership titles ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚Not fulfilling registration requirements with relevant authorities ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚Profits repatriation and exchange control restrictions ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Import/Export restrictions ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Financial Information Governance / Ownership Regulatory / Legal

Significant issue Moderate issue Not applicable / Non-significant

Quality of financial information is a commonly acknowledged problem, as is the existence of multiple sets of books, both of which have had ample press coverage recently, not least in connection with JCB’s acquisition of ERA Mining Machinery (China). On 18 January, Caterpillar disclosed “deliberate, multi-year, co-ordinated accounting misconduct”, involving inventory discrepancies, inflated profits and improperly recorded costs and revenue at ERA’s Siwei unit and that it would write off most of the US$654 million it had paid to acquire ERA only months earlier.

Other issues, such as the accounting consequences of non-compliance with labour laws, are perhaps less well documented despite this being listed as “not applicable / non-significant” for only four of the 15 countries in the study. Often, employee costs and headcount are not properly taken into account through a combination of both (i) understatement of salaries and social expenses and (ii) the payment of the workforce in “grey” cash and / or through complacent third party organizations. This can lead not only to potential legal issues but also overstated earnings and cash flows triggering an overvaluation of the target.

Hidden liabilities are raised as an issue for every country in the study and include tax and social welfare

underpayments; transfer pricing, undeclared loans or cross guarantees; insufficiently accrued payables and environmental issues (possible penalties especially in polluting industries) etc. In an SME context, family controlled businesses are common and some family costs / benefits may not appear clearly in the financial statements.

Top tax traps

Thin capitalisation is one of the most significant issues and features in 10 of the 15 countries studied. Local tax provisions often regulate the proportion of financing of the corporate taxpayer through equity and debt (thin capitalisation rules) and for tax purposes, many trigger the add-back of all or part of the interest expense when its indebtedness is disproportionate to its equity (i.e. its leverage is too high).

Intercompany prices are sometimes used to relocate the company’s profits to a favourable tax jurisdiction. Hence, in most companies there is a requirement that transactions between related parties should be carried out under the same terms and conditions as those that would have been agreed with a third party. The onus is very much on the company concerned to keep sufficient documentation to avoid transfer pricing issues.

Top 9 traps

B u s i n e s s

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Amortisation of assets / goodwill ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

CIT rate/capital gains ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Carry back /carry forward ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

French tax treaty/Tax sparing credits ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Deduction of financial costs ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Group tax regime ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Tax exemption applied to mergers/demergers ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Local incentives supporting investments ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚ ❚

Financial Information Governance / Ownership Regulatory / Legal

Significant opportunity Low opportunity Non-significant opportunity Not applicable

Amortisation of assets / goodwill is a tax opportunity common to most of the countries in the study. As a general rule, goodwill is an intangible asset representing a competitive advantage, such as a strong brand, reputation or high employee morale. In an acquisition or restructuring, goodwill appears on the balance sheet of the acquirer in the amount by which the purchase price exceeds the assets acquired of the target business / company. There is then the possibility to amortise this goodwill from an accounting standpoint and, in some countries, from a tax standpoint, in order to reflect that a part of the price paid at the time of acquisition, corresponds to future profits of the business transferred or acquired. However, it is important to note that amortisation for tax purposes is not allowed in all jurisdictions.

Carry back / carry forward of tax losses is again an opportunity in most of the countries in the study, to one degree or another, although whilst carry forward is often adopted, not all allow the carrying back of tax losses. Time limits for carry back / forward should also be monitored.

Tax treaties between particular countries provide significant potential. However, these must be reviewed on a country by country basis.

Above all, what is clear is that tax incentives are very specific to individual countries and it is therefore imperative to have tax advisors with knowledge of the tax requirements of the particular target country.

* In this study Mazars considered the transactional risks and opportunities of undertaking acquisitions in the BRICS countries (Brazil, Russia, India, China and South Africa) and a further ten promising and growing economies which may present attractive opportunities to investors — Algeria, Egypt, Indonesia, Malaysia, Mexico, Nigeria, Philippines, South Korea, Turkey and Vietnam.

If you need more information and / or wish to receive the full study, please contact Dany Sok, Marketing & Communication Manager — Mazars Greater China ([email protected])

Top tax incentives


A s a r e s u l t o f r e c e n t

and rap id deve lopments

in wor ldw ide commerce ,

we have witnessed supply

chains evolve into complex

international networks, which

can no longer adequately be

described using the l inear

concept of a ‘chain’.

The depth and breadth of complexity, connectivity and

inter-dependencies involved in today’s international

commerce has resulted in the emergence of ‘Supply

Chain Ecosystems’ — globally inter-weaved, multi-

layered networks of partners, suppliers, regulators,

service providers and customers.

Amidst rapid globalisation and the never ending pursuit

of low cost labour, these supply chain ecosystems have

become elongated, complicated and frustrated with

challenges arising from Velocity, Volatility and Vulnerability.

At the same time, the traditional growth consumer

markets in Europe and North America are experiencing

varying degrees of economic, political, social and fiscal

uncertainties, which intensify the continual challenge

of forecasting demand and result in high degrees of

variability in our supply chains.

Meanwhile, with the inexorable rise of the ‘Chindia’

powerhouse (China plus India) , combined with

the increasing economic prosperity and emerging

consumerism throughout the ASEAN region, our

presence here-and-now in “THE ASIA ERA” is

unequivocally confirmed, at least through to year 2050.

The most important impact during 2013 will be a

renewed supply chain focus that will move beyond the

Mark Millar, Logistics Committee Chairman

New Supply Chain Strategies for the Asia Era

B u s i n e s s

traditional performance metrics of speed, cost and

quality, to incorporate much more emphasis on five

critical R’s of supply chain — Regional, Regulatory,

Resilience, Rationalisation and Responsibility:

Regional — with increasing labour costs, especially in

mainland China, the volatility in oil prices, and the trend

towards regional free trade agreements, companies

will seek to rebalance their supply chain complexity

by adopting a more regional approach — for example

‘Made in Asia, for Asia’. Hence, there will be some

production that will migrate ‘closer-to-home’, or adopt

near-shoring — such as Eastern Europe or Latin

America. This will not however be a mass exodus from

Asia manufacturing — largely because of the well-

established supply chain ecosystems that service the

Asia-Europe and Asia-America trades, but also because

the potential in the Asian domestic markets is so

enormous.

Regulatory — companies expanding their business

activities in emerging markets, which are forecast

to account for almost 60% of global GDP growth

through to 2015, will increase the emphasis on having

the expertise to capitalise on free trade agreements,

whilst deploying due diligence to ensure full regulatory

compliance in all relevant jurisdictions.

Resilience — following the unpredictable events that

in recent years have caused massive-and-immediate

disruption to supply chains (hurricanes, earthquakes,

floods, accidents, social unrest and piracy) companies

are seeking to develop supply chain resilience. A recent

report identified that the greatest risk for global supply

chains is ‘The Unknown’. Companies will be adopting

combinations of what-if scenario modelling to stress

test their existing supply chain ecosystems, and then

develop strategies and tactics to build supply chain

resilience and deploy sense-and-response mechanisms

in order to be prepared for, and equipped to react to,

the unknown unknowns — “Expect the Unexpected!”.

Rationalisation — within the 3PL sector, we will

see increasing consolidation amongst and between

logistics companies, both at global and local levels, as

providers seek to leverage scale economies, extend

geographical footprints and expand service offerings.

Within the customer segment, we will also see further

rationalisation of their supply base of logistics service

providers — with companies reducing the number

of outsourced partners to a handful of best of breed

providers, likely specialised by geography, transportation

mode or specific service offering.

Responsibility — sustainable supply chains are firmly

back on the corporate agenda, driven by proven trends

that buyers are placing much more emphasis on the

suppliers’ perceived environmental reputation when

making purchasing decisions — both for consumers

and also in the B2B world. Environmentally Responsible

supply chains will incorporate particular emphasis

on green initiatives, carbon footprint measurement,

recycling and waste management programs. There

could well be progress towards the development of

independent sustainability standards in the shipping

and logistics sector for measurement and reporting of a

supply chain’s carbon footprint.

As we progress through year 2013, new supply chain

challenges will surface, presenting many interesting and

exciting challenges — and opportunities — throughout

our supply chain ecosystems — adopting a pro-

active approach to these critical five R’s will empower

businesses to overcome the challenges and capitalise

on the opportunities.

Industry thought leader Mark Millar has been

engaged by clients as Speaker, MC, Moderator or

Conference Chairman at more than 260 events in 20

countries and is recognised by the Global Institute

of Logistics as “One of the most Progressive People

in World Logistics”. Mark serves as Chairman of

the Logistics Committee at the British Chamber of

Commerce in Hong Kong. [email protected]


The Rise of the Building Construction Sector in Hong Kong in 2013

Donald Leung,Maxim Recruitment Hong Kong

Until this year, building construction work

has been secondary to the massive amount

of civil engineering infrastructure that has

been awarded and started in Hong Kong.

However, government funded money and

private money is now also flowing into a

range of building construction projects

in Hong Kong — and of course the civil

engineering projects are moving towards stages where

massive railway projects have or are becoming enormous

railway station fit out projects — sucking in thousands of

M&E, ABWF and claims professionals!

The broader context of the building construction

market is that buildings are going up and down in a

constant cycle — no one seems to be surprised anymore

when a building that was once standing is completely

gone the following week. However 2013 and beyond will

be special years for the building sector in

Hong Kong; and here’s why.

Special Unique Building Projects

As a UK or European expat in Hong Kong,

finding work on a building project in Hong

Kong until now has been more difficult than

getting work on civil engineering construction projects.

Size and scope of works obviously contribute to this fact.

There are only a limited number of building projects that

are particularly technically challenging and therefore have

higher profit margins and require specialist input. For

example, key projects that have already made an impact

for recruitment needs (for expats and locals) include the

Midfield Terminal Building at Hong Kong Airport and the

Kai Tak Cruise Terminal Building which is now almost

complete. The size of such projects dictates the need

B u s i n e s s

for greater project controls, risk

management and management

information run to international

corporate standards, meaning

more people with exceptional

skills and experience are needed

to come in and offer new insights

and innovations. This also applies

to many contracts awarded on the

5 major MTR rail projects currently

ongoing.

Minor Hong Kong Building Construction Projects

On the flip side of the above challenging projects,

there are of course building projects that are smaller

in scale, with lower risks and complexity relating to

their completion on time and to budget. Typical of this

category would be government residential projects and

minor redevelopment projects etc. Local Hong Kong

experience and language skills are valued highly and

thus, local candidates are employed almost exclusively.

The Hong Kong building market is by and large catered

to the local contractors which handle government

projects and public buildings such as the West Kowloon

Law Courts Building and sport centres in Tseung Kwan

O and Sha Tin.

Sustainability in Hong Kong

What is becoming clear as missing in the Hong Kong

construction market, is the presence of people who

have sustainable building knowledge and experience.

Like every other modern city, companies are vying

to be seen to be (or ideally actually be) “green”.

This will inevitably require certified individuals with

understanding of green schemes and criteria such

as LEED and BEAM Pro. Hong Kong is a very health

conscious place that is current ly dedicat ing i ts

efforts to building a sustainable future. Of course,

sustainability is still a relatively new concept to the

market in Hong Kong, whereas a lot of European

countries have been favoring the model for some time.

This is definitely a business opportunity for British and

international companies and individuals to add value to

the Hong Kong building construction built environment.

Please get in touch if you have these skills!

Buildings in Hong Kong 2013

In my opinion, the Hong Kong

bu i ld ing const ruct ion sector

has not been as attractive as it

is now for nearly twenty years.

Taking a new engineering, project

management or quantity surveying

job in Hong Kong now (whether

already here or moving here as an

expat or returning HK local) offers

some really great career prospects.

Choosing the right employer and

project to work on, as ever is

critical. That is what Maxim Recruitment has been here

to help with for over ten years now! We look forward to

hearing from you.


One of the more complex forces within the Chinese zod iac cyc le , the Year o f the Snake i s t yp ica l l y characterised as a period when old realities are shaken up, paving the way for forward movement, fresh understanding and new growth. As China approaches the mid-point of the current Five-Year plan, with new faces in charge of the government and on-going uncertainty around its future economic outlook, there’s no doubt that the next twelve months will be an interesting period.

The built environment will face its own unique challenges in this window and how the industry addresses them could serve as a reliable barometer for how China performs in the Year of the Snake.

Here are the top ten issues that we think the industry will need to contend with over the coming year:

1. Reduced level of personnel and growing HR cost:According to some estimates, labour costs in China’s construction industry could rise by as much as 25% over the coming year. This will place organisations under increased pressure to offer higher wages or risk losing key talent. From a client’s perspective, such fluidity within the job market is a potential risk particularly on current projects, for unless appropriate safeguards are in place this attrition could have significant implications in terms of knowledge loss and the retention of historical data. Given the higher labour costs within the market, firms should also be increasingly cautious about accepting the lowest tender offer. If a contractor has drastically cut their

fees, there’s a danger they will struggle to retain the talent they need to deliver the work throughout the duration of the programme.

2. Anticipate changing construction costs:With little change in construction costs since 2009, China’s market is arguably overdue a significant correction. This year is likely to see prices begin to rise and may even signal the beginning of a consistent upward trend that could ultimately see construction costs in China mir ror those in some Western economies in the not too distant future. This rise will have major implications, particularly for companies looking at delivering major programmes of work over a longer timeframe. Those with long-term visibility of their plans should begin to look strategically at when to invest in certain materials as it might be better to purchase early to avoid having to pay premium prices in the future once commodity prices have risen.

3. Expanding degree of project governance:Over the past decade, China has delivered large-scale infrastructure projects quicker than anywhere else in history. Whilst this has rightly drawn praise, in some instances it has been at the expense of both safety and quality. High-profile incidents have brought lots of negative attention to the construction industry and as a result, project governance and health and safety issues are likely to come into sharper focus over the coming year. To address this issue, it is likely that the government will launch new guidelines to disseminate a best-practice approach across the industry.

What Will the Year of the Snake

Mean for China’s Built Environment?

Mark Budden, Area Leader, Greater China, EC Harris

B u s i n e s s

4. Rising difficulties in gaining project approval: The domino effect of this increased focus on health & safety measurements is likely to result in tighter regulations around which development projects will acquire approval. The recent protests in Shenzhen and Ningbo over the opening and expansion of chemical plants in the area, are just two examples of an increasingly environmentally-conscious population. Within the market, this shift will drive a greater focus on asset remediation. In sectors like manufacturing and oil & gas, companies may look for greater levels of technical and commercial expertise to help them address existing damages or to plan new assets in a more responsible manner moving forward.

5. Changes in land use will lead to a move to the West: Land use changes wil l see many manufacturing organisations begin to shift their assets to the West of the country. Those firms faced with the prospect of relocating multiple assets, may start to consider this as a larger programme of work rather than as a series of stand-alone projects. By adopting a programme-led approach, there is the opportunity to drive additional value, reduce capital spend & ensure consistency of outcome, all of which is difficult to achieve when procuring work on an individual project level.

6. Contractors remain in a favourable position with claims & conflicts:Some of the pressures that will be placed on Chinese contractors over the coming months may, in certain cases, lead to conflict. The judicial system in China tends to favour the contractors rather than the client, partly because many of these contracting companies were formed off the back of State Owned Enterprises. This is changing but clients are recognising the risk of exposure, especially when their procurement arms tend to favour lowest price bids. We expect that there will be a greater demand for independent contract advice and dispute avoidance, as well as independent audits of projects particularly from a programming and costs point of view.

7. Search for better approaches on how to plan assets by Chinese developers: Constraints around the level of debt finance and the limited number of projects available within the market will place local developers under greater pressure to deliver successful development schemes. This is fuelled in part by the China Banking Regulatory Commission’s (CBRC) announcement last year around zero tolerance on bad debt beyond 2016. The announcement was particularly focused on strongly encouraging developers and urban planners to think then build. With higher stakes now in play, developers will need to ensure that their business cases are as robust as possible, and that the assumptions which underpin their development plans, are based on hard facts and thorough research, rather than vague assumptions or legacy data.

8. Focus remains on developing infrastructure: With over one trillion RMB due to be released for infrastructure projects over the coming years, there is likely to be significant capital spend in the transportation, power & water networks. However, a sizeable percentage

is also likely to be allocated to ‘soft infrastructure’ assets including new schools, higher education institutes and hospitals. Indeed, with an ageing population and a rising number of lifestyle diseases, the demand for new healthcare assets continues to grow every month. As the population becomes more health-conscious and interested in paying for healthcare, the major challenge will come in helping developers, operators and investors to work together to deliver the right types of assets that generates a level of return that satisfies each party.

9. Growing importance in understanding the Chinese middle class: The Year of the Dragon saw many organisations place a real emphasis on trying to understand what makes China’s middle-class consumers tick. As the findings from many of these research studies come to light, this will inevitably have an impact on the assets that are built over the coming twelve months. For commercial and retail developers, the key focus will be to try and understand what this demographic places a premium on as effectively meeting this need could be the difference between success and failure in an increasingly competitive market.

10. Increasing importance in amplifying asset performance: Development in China over the past decade has been largely characterised by a ‘build it and they will come’ approach. The average lifecycle of many of these assets is expected to be less than 30 years, however within the market there is a growing awareness of the significant operational and environmental savings that can be made by extending the life of these assets and managing them in a more intelligent manner. Land availability is also becoming a bigger concern, particularly in the major cities, following the government’s move to help develop the agricultural sector by prohibiting any further sell-off of current arable land. As a result, we expect that developers will progressively look at asset management and optimising the performance of their existing assets in order to drive longer term returns.

The range of issues that are likely to play out in China over the next twelve months will make it a fascinating place to live, work and to do business in.

It will undoubtedly be a challenging market, however those organisations that understand the opportunities on offer and how to successfully capitalise on them, will be in a position to leave the Year of the Snake re-energised and primed for sustainable, long-term growth.

EC Harr is and ARCADIS are building capabilities to support our clients around all of these issues. With 18 offices and over 1,350 built asset consultants working in Mainland China, we are aiming to drive positive outcomes through our local knowledge and international approach.

Mark Budden Area Leader, Greater China t: +86 21 6039 7063 m: +86 138 1738 4780 e: [email protected]


A shocking revelation is that 70% of expatriates in Hong Kong do not have a will, or so results from The Henley Group’s annual client survey indicate. What is a surprise is that expatriates, who are more likely than the average man to have assets of value, would be so unconcerned about making a will.

“Most people know that they probably should write a will but they put it off perhaps fearing their own mortality, or that it will cost a lot of money or be overly complicated,” said Mark Rawson, Chief Executive Officer of The Henley Group Limited.

Rawson also suggested that complacency may be another factor. “Hong Kong law is generally quite judicious so people rely on Hong Kong’s intestacy laws to provide them with a ‘default’ version, rather than make the effort to write a will of their own. While the laws are practical, you could compare it to the government hospitals where the care is adequate but there’ll be a long wait list, it won’t

be particularly convenient and you won’t necessarily get exactly what you want.”

“One assumption many people make is that if you die without a will the surviving spouse gets the entire entitlement, but we have heard of cases where the husband dies without a will, and the wife expects to receive the entitlement, much of which she has contributed to herself financially. However, according to Hong Kong intestacy laws, if the husband has surviving parents, the parents can be beneficiaries of up to 50% of the entitlement,” said Rawson.

Without a will stating otherwise, if a person dies unmarried and without children, then their wealth may be shared amongst a network of possible entitled beneficiaries including grandparents, uncles and aunts — but not given in its entirety to a common-law partner, favourite nephew or charity. If children are involved, then the intestacy laws recognise illegitimate and adopted children as well as those who are legitimate, but not stepchildren, unless they are legally adopted.

It is often marriage, or the arrival of the first child that prompts a person to finally draft a will, but even so, 48%

WHOStands to

Inherit Your Wealth?

B u s i n e s s

The Henley Group’s annual client survey reveals that an alarming number of expatriates do not have a

will, and are leaving the fate of their estate to the direction of Hong Kong’s intestacy laws. The results can

be unexpected.

Mark Rawson,Chief Executive Officer, The Henley Group Ltd

B u s i n e s s

of those parents surveyed had not made a will. “It is particularly alarming when parents don’t make a will,” said Rawson. “Hong Kong law states that when there isn’t a will indicating a child’s new legal guardian, then the state takes charge of appointing guardians. People also assume that a relative can jet in and pick up the kids. This is not the case and there are formalities to go through, and until these are resolved in the courts, the child or children may be taken into care.”

As well as dictating who gets what, a will also makes life less distressing for dependents in the period after your death. Even with a will, probate or the administrative process can take three to six months, or longer depending on the complexity of the deceased’s estate. But without a will to provide instruction, the process can take a lot longer and prove a harried journey for the dependents.

A will can be as simple as “Everything to surviving spouse” — but it is critical that this is correctly structured, names an executor, identifies beneficiaries, works with assets in all countries you touch, and it is signed by two witnesses who are not beneficiaries.

The executor carries out the terms of the will, and the executor’s responsibilities will include the application for grant of probate, the application for access to any safe deposit box, and the submission of an application for funds from the estate for maintenance of dependents while the will is in probate, as well as generally administering the estate. Without an executor, someone needs to step forward to act as administrator, but there are elaborate rules governing who can take on this role, and while that is being determined, your dependents wait.

A will can also make flexible provisions regarding the administration of the estate which is not possible under the intestate law. For example, a trustee can be appointed for the benefits of the children, i.e., he/she administers the fund for their education and welfare until they reach a certain age.

Given the complexity of most expatriates’ financial life even a well constructed will may not be enough. Rawson warns: “Although a will made in the United Kingdom is accepted in Hong Kong, there are factors the Hong Kong probate office will consider when making settlements of local assets which may not be covered. Indeed having one will to cover multiple jurisdictions can add significantly to the time it takes to settle assets (and therefore costs) in each location.”

The cost of making a valid and well-drafted Hong Kong will by solicitors is cheaper than most people think and the benefits that it can bring are many, in particular to those

you care about. Death is distressing enough for those you leave behind, and as expatriates our estate is rarely straightforward. A little time spent now can ensure that your estate benefits the people you care about, and not the lawyers and accountants, long-lost relatives, or even the government.

Is your will valid? A cautionary tale

On hearing that 70% of expatriates surveyed had not written a will, a guest at a recent Henley Group Seminar confidently assured Mark Rawson that she was in the 30%, she had a will and it was professionally written. However, on further discussion it turned out that while she had used a will-writing professional to write the original will, she had updated it herself on the birth of a second child, and hadn’t quite got round to asking someone to act as witnesses to her signature. This has since been put right, but serves as a simple example of how things could have gone so wrong.

70%of expatriates surveyed had not yet written

a will

60%of them owned at least one property

30%had children under the age of 18, but no will

M a r k R a w s o n i s C h i e f Executive Officer at The Henley Group Ltd and has been in the financial services industry for 30 years. The Henley Group has been servicing the expatriate community in Asia for 22 years and covers the whole spectrum of financial planning and wealth advisory services.

To d iscuss your estate p lann ing needs p lease contact The Henley Group on 2824 1083 or email [email protected]


Are You Willing to Share?

When Stephen Barnes set up the Hong Kong Visa

Centre, he knew that the secret to business success

lay in giving away his knowledge, not charging for it. In

a twist to the way businesses often jealously guard their

expertise, Barnes decided to share his insights with

visa applicants as often as possible, free of charge.

In doing so, he employed a pract ice commonly

known as ‘content marketing’. Companies using

content marketing typically develop and share useful

information in order to engage, help, and ultimately

sell to their customers and prospects. But actual sales

messages, if any, are kept to a minimum. By focusing

entirely on their audience’s needs, and delivering

content to support those needs, companies benefit

from improved lead generation, increased brand

recognition, and better customer engagement.

The practice is growing globally. The industry’s Content

Marketing Institute (CMI) recently found, for example,

that 61% of marketers in Australia plan to increase

their content marketing budgets in 2013. Meanwhile,

Dominic Masterton-Smith, Director, Human Communications

adoption among business marketers stands at 95% in

the UK, 91% in North America, and 98% in Australia,

according to the CMI.

Content marketing isn’t a new idea. In fact, one of the

earliest known examples was a customer magazine

published by US tractor maker John Deere. The date

was 1895. What has changed, however, is the ease

of sharing content. With low barriers to entry and the

ability to control one’s own distribution—for example,

through a website or email newsletter—companies can

reach a global audience at a very low cost.

One business, Kuno Creative, saw online sales leads

increase by more than 600% when it switched from

traditional search engine optimisation (SEO) techniques

to content marketing. In a video discussing its success,

Chad Poll i tt, the company’s Director of Inbound

Marketing, says, “Businesses are in the business of

solving people's problems… So, the content you

produce needs to centre on solving people’s problems,

because that's what people want.”

B u s i n e s s

In today’s digital world, content marketing is a practice

that has particular benefits for small and medium-sized

enterprises (SMEs) seeking a wider online audience. By

providing answers to common questions, companies

can demonst ra te the i r va lue and d i f fe rent ia te

themselves from their competitors. These SMEs are

also more likely to reach prospective customers in the

first place, as they will naturally use the same phrases

those people are using to search online.

A US company installing fibreglass swimming pools

may seem an unlikely content marketing champion.

But Marcus Sheridan, an owner of River Pools, first

explored the practice when sales dropped in the

struggling economy in 2008. His approach was simple.

He decided to use a blog to answer the questions his

customers most frequently asked, including the one

competitors dared not answer: ‘How much does a

typical pool cost?’. The approach was so successful

that visitors to River Pools’ website soared, as did the

company’s sales.

There are, however, some challenges for those new

to the practice. Many SMEs are put off because they

don't know where to start, worry about not having

enough to say, or don’t have the time or resources

to commit to a regular publishing schedule. But, by

focusing on customers’ typical concerns, even the

smallest company can produce relevant and helpful

content. A business might, for example, write about an

industry trend and its likely impact on customers, or

develop case studies showing how existing customers

have overcome their business problems using the

company’s services.

Businesses concerned about meeting a regular

publishing schedule may also benefit from an editorial

calendar that maps out content in advance. If, for

example, a business owner is speaking at an industry

conference one month, it’s easy to turn that speech

into an article the next month. Alternatively, a company

might develop one or two reports each year, from

which it can then create several shorter blog posts or

podcasts.

At the Hong Kong Visa Centre, Barnes

has built a huge online resource of

blog posts, case studies, and short

videos, al l aimed squarely at those

seeking help with visa applications.

“It’s all about answering questions and

solving problems,” he says. “It’s about

portraying your knowledge and gaining

a level of trust and goodwill from your

audience.”

“We structured our content in such a

way that customers stand a really good

chance of being able to find us online,”

he says. “If it becomes immediately

apparent that we know what we're

talking about and that there is the opportunity for them

to have all their problems addressed for free, our hope

is that when they're ready for professional assistance,

they'll come our way rather than going elsewhere.”

For SMEs in today’s digital environment keen to reach

new prospects, increase customer engagement

and, ultimately, improve sales, the lesson is clear.

Increasingly, it pays to share.

For further information, please email dominic@human-

communications.com


Employers in Hong Kong will struggle to attract and retain top talent this year as skills shortages continue to escalate, according to findings in the 2013 Michael Page Salary & Employment Forecast for Hong Kong.

Some 39% of the employers we surveyed believe there will be a professional skills shortage during 2013. This finding is an increase of 12% when compared to skills shortages expectations of employers surveyed in 2012.

Here is a snapshot of some of the job types and areas expected to suffer from talent shortages this year:

Finance (commerce and industry)

• Strong, hands-on pre IPO experience • Business analysis skills at BU levels• Practical treasury skil ls in addition to regional

exposure

Finance (investment banking and asset management)

• Risk and compliance professionals with sound commercial acumen

Human Resources

• HR Specialists in areas like corporate development, learning and development, and compensation and benefits

Property and Construction

• Architecture or E&M Project Managers• Quantity Surveyors• Real estate professionals with a surveying background

Talent Management is Critical as Employers Expect Skills Shortages to Escalate

Andy Bentote, Senior Managing Director

Hong Kong & Southern China, PageGroup

B u s i n e s s

Sales

• Professionals with experience across the Asia region• Within the junior sales market, pharmaceutical or

medical sales experience

Legal

• Corporate Lawyers and Compliance Lawyers in both the financial services and FCPA/anti-bribery areas

• Structured products lawyers or specialists in areas like derivatives and ISDA.

Retail

• Footwear or handbag merchandising professionals

Supply Chain

• Trade compliance professionals at junior to mid levels

Marketing

• Experience in the services and pharmaceutical sectors

Technology

• Developers with experience in (C++, .NET, PHP) programming languages.

Across all sectors, Chinese language skills continue to be highly prized by employers. Flexibility is also an increasingly attractive feature; professionals that are willing to relocate or travel extensively to tier 2 or tier 3 cities in the PRC are in hot demand.

The ongoing shortage of quality professionals in Hong Kong will make talent attraction and retention a key challenge for employers during 2013, with nearly half of the employers surveyed (45%) planning to focus on recognition and reward.

In terms of financial rewards, the majority of employers we surveyed (69%) will be awarding salary increases based on performance. Most respondents (48%) intend to award average salary increases of between 4% and 6%. This is a slight increase on the previous year’s survey findings, when 42% of employers said they would award average salary increases in this range. In some law firms and financial institutions, it is also becoming increasingly common for shares and delayed bonuses to be paid out over six to 12 months in an effort to keep the company’s best performers.

In terms of non financial rewards, survey findings reveal that work-life balance options and employee benefits will continue to be on the table in 2013. Of those employers providing employee benefits, a significant 95% said they will offer healthcare/health insurance, while 58% will

provide team building/offsite activities to facilitate work-life balance.

Other non-financial rewards like flexible working hours, sabbatical opportunities, secondments to new cities or countries, training and development allowances, and job rotation opportunities to facilitate multi-skilling are also popular ways to attract and retain top talent.

The Hong Kong employment market continues to offer opportunities for experienced and talented professionals. Employers will need to consider the full spectrum of attraction and retention strategies — both traditional and non-traditional — for the best chance of attracting and retaining the best talent in the market.

About the Author:

Andy Bentote is the Senior Managing Director of Michael Page and Page Personnel in Hong Kong and Southern China. Operating from offices in Hong Kong, Kowloon, Guangzhou and Shenzhen, Andy has responsibility for all areas of the business including a number of specialist disciplines such as Accounting & Finance, Financial Services, Engineering & Manufacturing, Procurement & Supply Chain, Sales & Marketing, Legal, Human Resources, Technology, Property & Construction and Retail & Sourcing. He has more than 18 years’ experience working in recruitment.

Andy joined the Michael Page business in the United Kingdom in 1994 where he worked with the Finance team in London for six years. In 2001 he moved to Michael Page Legal as Operating Director and during this time he recruited for major law firms and in-house counsel. In 2006, Andy was appointed Regional Director for Michael Page Engineering & Supply Chain and played a key role in the rapid development of the business. In March 2009, Andy relocated to Shanghai as Managing Director, North & Eastern China and was responsible for overseeing the growth of the business to over 150 staff across four locations. In February 2013 Andy relocated to Hong Kong to take up his current Senior Managing Director role.


Legal Q & ALaw is always a daunting world for those outside the legal profession, yet its relevance to business situations can be very real and immediate. The British Chamber is here to help and is now running a regular Legal Q & A column in Britain in Hong Kong. Every month, legal experts from major law firms will be on hand to answer your queries. If you have any legal questions that you would like to ask our panel of experts please send them by email to [email protected]. This month the team from Howse Williams Bowers are back again to answer more business-related questions.

EmploymentQ: Paul Wong commenced employment with Urban Treasures Limited with a

three-month probationary period. The employment contract provides that during the probationary period, either party may terminate the employment by providing 1 month’s notice or payment in lieu of notice. Paul did not turn up for work after his second week of employment. Can Urban Treasures make a claim against Paul for a sum equivalent to one month’s payment in lieu of notice?

A: Although the employment contract expressly states that the parties agree to provide each other 1 month’s notice or payment in lieu of notice during the probationary period, section 6(3) of the Employment Ordinance (Cap.57) expressly states that either party may at any time during the first month of employment terminate without providing notice or payment in lieu of notice.

As a result and notwithstanding the fact that the employment contract expressly states that notice of termination must be given during the probationary period, either party is permitted to terminate the employment during the first month without any notice being given. Urban Treasures therefore does not have a legitimate claim against Paul.

CorporateQ: We are interested in acquiring a company with a profitable line of business,

however, it also consists of other loss-making businesses. Can we cherry-pick the favourable business and avoid its existing liabilities?

A: Yes — All the target company’s existing liabilities and obligations (including the loss-making businesses) can be avoided by simply purchasing the profitable business, which means you won’t be buying the shares of the company. The Transfer of Business (Protection of Creditors) Ordinance (Cap. 49) provides that the buyer can avoid the liabilities of the seller by giving proper notice of transfer. If any creditor makes a claim against you during the statutory notice period, you are also entitled to be indemnified by the seller.

An advantage of structuring your acquisition as an asset/ business purchase is that the assets of the target business may be used as security to finance the transaction, whereas the same mechanism is prohibited in respect of a transfer of shares by the Companies Ordinance (Cap. 32). However the documentation involved

For more information please contact:

Ying Ying Ho (Associate)+852 2803 3698+852 2803 [email protected]

Catherine Leung (Senior Associate)+852 2803 3630+852 2803 [email protected]

Kayleigh Mak (Associate)+852 2803 3610+852 2803 [email protected]

Denise Che (Senior Associate)+852 2803 3666+852 2803 [email protected]

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is more complicated (e.g. you may need to obtain consent from third parties such as customers and suppliers, landlord etc., and enter into new (novation) contracts with each of them separately together with the seller).

In order to protect your interests, the sale and purchase agreement should incorporate provisions such as sellers warranties and indemnities and non-competition clauses. Thorough legal and financial due diligence should also be conducted to ascertain 1) if there are any existing debts and liabilities you may wish to avoid and 2) which third party contracts you may wish to “inherit” from the seller.

LitigationQ: Joe Smallbiz is the owner of a small trading company. A customer has

defaulted on payment for 2 invoices with a combined value of HK$65,000. Joe wants to know how best to recover the outstanding money.

A: Before taking out any legal action, Joe should consider whether it is possible to settle the dispute with the customer by say, negotiating payment by installments. If pre-action recovery attempts fail and the customer is financially sound, Joe may commence a claim in the Small Claims Tribunal, which deals with civil claims not exceeding HK$50,000. Joe’s claim exceeds HK$50,000, but if the two invoices involved constitute separate courses of dealings (e.g. unrelated purchases), Joe may bring 2 separate claims before the Tribunal. If the two invoices concerned involve the same transaction, or the Tribunal takes the view that they relate to the same claim, Joe may consider bringing a claim in the District Court, or keeping his claim in the Tribunal by abandoning the part of the claim exceeding the prescribed limit.

The advantage of taking out claims before the Tribunal is that its rules and procedures are less strict than in the courts. Since no legal representation is allowed, Joe will have to prepare and present his own case and evidence to the Tribunal and discredit the customer’s opposition through cross-examination. If Joe wins the case and obtains a Judgment in his favour and the customer still refuses to pay, Joe will have to apply to the Bailiff’s Office of the Judiciary for enforcement of the judgment.

InsuranceQ: Is it legitimate for my insurance broker as my agent to be receiving

commission from insurers?

A: It has long been a customary practice in the insurance industry for insurance brokers to receive commission from insurers. Provided that the commission is not in excess of the usual level of commission paid in the insurance market and that the insurance broker has made a disclosure to the insured, being paid the commission does not constitute an illegal profit — a position confirmed in the case of Hobbins v Royal Skandia Life Assurance Ltd & Clearwater International Ltd., HCCL 15/2010.

Following this case, new regulations are being implemented in respect of the disclosure of insurance brokerage commission which will take effect from 15 April 2013. Insurance brokers are not required to provide specific details of the amount of commission received. However, they will be required to include a Form of Disclosure in their client agreement stating that “[Broker Name] (the “Company”) is remunerated for its services by the receipt of commission paid by insurers. Your agreement to proceed with this insurance transaction shall constitute your consent to the receipt of commission by the Company.”

It remains the case that the amount of the commission should not be in excess of the usual level of commission paid in the insurance market. Where higher levels of commissions are received, additional disclosures to and consent from the insured may be warranted to avoid any breach of provisions of the Prevention of Bribery Ordinance (Cap.201).

Howse Williams Bowers (HWB) is a leading independent Hong Kong law firm. Our key practice areas are commercial and maritime dispute resolution; corporate/commercial and corporate finance; clinical negligence and healthcare; insurance and professional indemnity insurance; employment; family and matrimonial law; intellectual property, property and building management.

As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of doing business in Asia.

Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide formal legal advice. Please contact [email protected] if you have any questions about this article.


The Best of AsiaNikki Pang,

Marketing Manager, Lightfoot Travel

One thing people are never short on is choice when it comes to hotels around Asia. With way too many amazing

properties to choose from, we’ve narrowed it down to a few of our favourites around the region.

Amanpulo – Palawan, PhilippinesAmanpulo is the granddaddy of Amanresorts, being the group’s most popular property worldwide. As soon as you climb aboard the 19-seat, twin-engine plane at Manila Airport and catch your first glimpse of the private island of Pamalican in the island province of Palawan, you’ll know why. We love that you can just walk out of your beach casita straight onto one of the longest and most pristine beaches we’ve found in Asia — it takes about 40 minutes to walk around the entire island. The resort’s 30-metre pool is absolutely stunning, but we always opt for a dip in the ocean. Marine highlights include snorkelling with giant sea turtles the size of dining tables, and releasing just-hatched baby turtles into the surf. The resort is comprised of 40 casitas, and transport to and from your casita is provided by self-driven golf buggies. Like all Amans, the staff address you by name and are familiar with your room number so you always feel welcome and never have to sign any bills – they really do deliver beyond the expectations of the discerning traveller.

Huvafen Fushi – MaldivesHuvafen Fushi is a stunning retreat just a short 30-minute speedboat ride from Malé International Airport. Famed for its underwater spa, watching thousands of colourful fish swim around you as relax on the sea bed is quite a staggering experience. The rooms at this stylish resort are vast, and the overwater villas have amazing bathrooms with views out to the sea. Couples may prefer the beach villas however, as they offer a bit more privacy, and being right on the beach is rather romantic. Our personal suggestion is to take a few extra days and split your time between both! Activities abound on the island with water-skiing and other motorised sports, along with an impressive choice of

sailing boats and the options of fishing, snorkeling and diving. The marine life at Huvafen is amazing, and at 6.30pm every day resident marine expert Sue feeds the stingrays (and a rogue Jack fish!). There were 15 stingrays at feeding time when we visited, and it’s a wonderful thing to witness with Sue talking you through the whole process. The underground wine cellar is also very special with a large table for private dining.

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Six Senses Con Dao – Con Dao Islands, VietnamFrom the moment you land you are made to feel special and different from the big groups of people herded around other resorts in the area. The 40 stand-alone villas all have private pools, massive bathrooms, outdoor rain showers and pillow menus. The food here is divine with rotating menus so you never get bored. The theme of this resort is understated luxury, and we love the little services that Con Dao provides such as after sun gel and shampoo. Con Dao is excellent for families with plenty of fun things for kids to explore, nature walks and treks, and a Kid’s Club.

Damai Cruises – sails around different regions in Indonesia according to the seasonDamai 1 and 2 are gorgeous, boutique liveaboards hosting only 8 guests at any one time in 4 spacious cabins. The design of the boats are simple and follows a style the owner likes to call “casual comfort.” Beds are real queen sizes and despite being on a boat, the rooms do not feel cramped at all. A team of 20 people are on board to serve you at all times and include 3 dive guides, ensuring a maximum 1:4 ratio of guides to divers. Diving runs like absolute clockwork and everything is prepared for you so all you have to do is wake up, listen to the dive briefing, get your equipment on, and fall off the boat! The dining staff are a great bunch of people and they get to know you and try and cater to your dining preferences — from your morning coffee to your preferred glass of wine post-dive. You literally do not have to lift a finger on this boat except to eat, snap photos, and shower. Everything appears on time as if by magic and you come away feeling utterly spoiled. Damai Cruises sail around the marine wonderlands of Raja Ampat and Komodo National Park according to the seasons — how very romantic!

Aman at Summer Palace – Beijing, ChinaWe’d like to get an urban hotel in here amongst all the beach resorts, and Aman at Summer Palace is a great shout for those who are looking to explore the big city, but want to get away from it all at the end of the day. Located in a series of original Qing Dynasty buildings, the property actually shares a wall with the Summer Palace, and you can explore the sprawling palace

grounds through your very own private door. The spacious and traditionally decorated rooms have high ceilings with original wooden beams, and are situated around beautiful courtyards. For those tired of sightseeing, the property has a beautiful spa, a 30-metre pool, and a huge fitness centre complete with Pilates studio. It even has a home cinema right next door to the spa, so children can entertain themselves while parents indulge in a few of the Aman’s signature treatments. One of our favourite experiences was convincing the staff to open the door to the Summer Palace after dinner (they said it wasn’t protocol to go out at night!), and venturing out into the darkness with a flashlight to look out over the lake.


Bespoke travel company Lightfoot Travel (www.lightfoottravel.com) is an Asia-based tour operator specializing in tailor-made holidays, honeymoons, short breaks, boutique accommodation and private villas in Asia and beyond. For more information please call +852 2815 0068 or email [email protected]

Standard Chartered Bank Title Sponsors of the Annual Ball 2013!

The British Chamber of Commerce is delighted to announce Standard Chartered Bank as the title sponsors of the Annual Ball for the eleventh consecutive year!

The Annual Ball is the highlight in the Chamber’s event calendar, attended by 450 individuals from the international business community in Hong Kong. A fun themed extravaganza at the Grand Hyatt, the night is filled with fantastic entertainment from top performers, a specially crafted themed six course meal and free flowing drinks. Fancy dress costume is a must for all attending guests, with prizes to be won for those who dress-to-impress on the night! The Ball is also an important fundraising event, raising funds for a chosen Charity.

The British Chamber of Commerce and Standard Chartered Bank Annual Ball 2013Friday 13th SeptemberThe Grand Hyatt Hong KongTheme: To be announced soon!

For further information, please contact [email protected]

Thank you for your continued support

The British Chamber’s Sterling Members

Sponsorship Announcement

Member DiscountsFood and Beverage and Accommodation

Accor | Members will receive 10% discount on top of the lowest rates that Accor’s Asian hotels are offering on the day. This applies to over 1600 Sofitel, Pullman, MGallery, Novotel, Mercure, Thalassa & Orbis hotels worldwide. You will also receive 5% discount on top of the best unrestricted rates for hotels including ibis (in specific countries), All Seasons & Hôtel Barrière. For more information please contact Regina Yip on 2868 1171 or email [email protected]

Alfie’s | Members of the British Chamber of Commerce can benefit from a 10% discount at this chic restaurant in Hong Kong. To make a reservation please call 2530 4422 or email [email protected]

Berry Bros. & Rudd | Members can benefit from a 10% discount on all retail prices as well as receiving invitations to free tastings and other wine events during promotional period. For more information please call 2907 2112

Courtyard by Marriott Hong Kong | Members will receive a 20% discount on food only in MoMo Café. To make a reservation please call 3717 8888

Dot Cod | All members of the British Chamber of Commerce of Hong Kong will receive a 10% discount on the bill. For more information please call 2810 6988 or email [email protected]

Grand Hyatt Hong Kong | 15% discount on food and beverage at The Grill and 10% discount on treatments upon spending HK$1,000 at Plateau Spa. To make a reservation please contact The Grill on 2584 7722 or the Plateau Spa on 2584 7688

Le Méridien Cyberport | Members can book a Smart Room at the special rate of HKD1,600 including a daily eye-opening buffet breakfast (subject to availability). You will also receive 20% discount at 5 of the hip restaurants and bars that the hotel has to offer. Furthermore, when you book the 21-day long room package at HKD23,100 you will receive a ‘Round Trip Limousine Service’. For more details please call 2980 7785

Hong Kong Skycity Marriott Hotel | Members will receive a 10% discount on the total bill at Man Ho Chinese Restaurant, SkyCity Bistro, Velocity Bar & Grill, and The Lounge (Promotion does not apply to alcoholic beverages). To make a reservation please call 3969 1888

Renaissance Harbour View Hotel | Members will receive a 10% discount on the total bill at award-winning Dynasty Chinese Restaurant, all day dining at Cafe Renaissance, Scala Italian Restaurant and the Lobby Lounge. To make a reservation please call 2802 8888

The Mira Hong Kong | Members will be given special room rates, a complimentary upgrade and fantastic discounted rates on the Spa suite package (subject to availability). For more information please contact Connie Kwan on 2315 5666 or email [email protected]

W Hong Kong | Members will receive 15% off the lunch buffet in Kitchen and dinner in Sing Yin Monday to Friday, and 10% off in all venues at all other times. For more information or to make a reservation please call 3717 2222

There are many great benefits of being a member of The British Chamber of Commerce. One of those is the Member Discounts programme which is an exclusive package of discounts that range from discounted car rental, reduced hotel accommodation, airfares and even relocation costs.

Every six months we invite members to prepare a tailor made offer to all the members of the British Chamber. You can find these benefits listed below and for more details please visit our website www.britcham.com

Lifestyle & TravelAllied Pickfords Hong Kong | Allied Pickfords will extend a free local move for any Home Search completed by SIRVA Real Estate. For more information please call 2823 2089 or email [email protected]

Colourliving | As a member of the British Chamber of Commerce, you can enjoy a 10% discount on all normal price merchandise when shopping at Colourliving in Wanchai. Please call 2510 2666 or visit www.colourliving.com

Avis | Members can receive up to 20% discount off standard rates on car rental bookings. To make a booking please call 2882 2927 or visit www.avis.com.hk

British Airways | As a member of the British Chamber of Commerce you can enjoy an exclusive offer of 7% discount from British Airways. To make a booking please visit www.britcham.com/memberdiscount/british-airways

Flight Centre | Members will receive HKD150 off the first booking made as well as a complimentary Airport Express ticket per booking. For all holiday and flight enquiries please call Paul Jeffels on 2830 2793 or email [email protected]

Lightfoot Travel | British Chamber members will receive 5% off all holidays booked with Lightfoot Travel. Please call +852 2815 0068 or visit www.lightfoottravel.com for further details

Virgin Atlantic Airways | Special offers to London are available exclusively for members of the British Chamber of Commerce. Please call 2532 6060 for more details or to make a reservation

sense of touch | Britcham members will receive 20% off all treatments on their first visit upon a total spend of $1,000, 10% off facials and massages in all subsequent visit as well as a $1,000 treatment coupon when purchasing a $10,000 cash package. For more information please call 2201 4547

VisitBritain | British Chamber members can get 5% on all purchases from VisitBritain’s online shop by entering the code TR7DE67! at the checkout. Please visit www.visitbritaindirect.com/world for further details.

Business ServicesCompass Offices | Compass Offices, Hong Kong’s largest Serviced Office provider, offers members a 10% year round discount on meeting rooms, a free one hour Telepresence or Video Conferencing session and a 3 month complimentary Virtual Office package. For more information please call 3796 7188 or email [email protected]

Regus | Britcham members will receive a complimentary six-month Businessworld Gold card that gets you access to 1,200 business lounges in prime central city business locations in Asia and around the world. For more information or to accept this offer please visit www.regus.hk/localpartnership and enter the activation code APHKBCC in the Promotional Code box.

The Hive | The Hive is offering one additional month’s membership at no extra charge for any member who signs up for 6 months. For further details, please visit www.thehive.com.hk

Terms and Conditions apply. All member discounts are subject to availability. If you are interested in providing a tailored offer to our members or for more information please contact Emily Ferrary on 2824 1972 or email [email protected]


Captains of Industry LuncheonPaul Manduca, Chairman, Prudential Plc“Common Challenges, Common Solutions: Britain and Asia”Tuesday 15th January 2013We were honoured to have Paul Manduca, Chairman of Prudential Plc, speak at a Captains of Industry luncheon, held at the Island Shangri-La Hotel. As chairman of the UK’s biggest insurer by market value, Paul shared his insight on the common challenges facing Britain and Asia today.

Captains of Industry LuncheonCarlson Tong, Chairman, Securities and Futures Commission“The Challenges Ahead”Wednesday 30th January 2013Chamber members gathered on Wednesday 30th January to hear Carlson Tong speak on how the Securities and Futures Commission works, its mission and vision, and discuss the key challenges facing the organisation. As former chairman of KPMG China and KPMG ASPAC and current chair of the English Schools Foundation, Carlson also shared with the audience the secret to his success in his professional work.

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OVERSEASCrown AgentsMike ByfieldRegional Director AsiaTel +65 6297 [email protected] Beach Road, 11-01 Gateway East, 189721, SingaporeGovernment

University of SussexBrian McNamara International OfficerTel +44 [email protected] House, University of Sussex, Brighton, BN1 9RH, Hong KongEducation

CORPORATEBSI Pacific LimitedDavid HorlockManaging Director, Asia PacificTel 3149 [email protected]/F, Cambridge House, Taikoo Place, 979 King’s Road, Island East, Hong KongTraining

GenslerCallum MacBeanPrincipal, Managing DirectorTel 3976 [email protected]/F, One Wellington Street, Central, Hong KongArchitecture/Interior & Urban Design

Press Room GroupTom WatkinsDirector of Sales & MarketingTel 2821 [email protected] 1307-8, 248 Queen’s Road East, Wan Chai, Hong KongHospitality

BMT Asia Pacific LtdRichard ColwillManaging DirectorTel 2815 [email protected]/F ING Tower, 308 Des Voeux Road, Central, Hong KongConsultant Engineers

ADDITIONALGlaxoSmithKlineSally StoreyVP & General ManagerTel 3189 [email protected]/F, Tower 6, The Gateway, 9 Canton Road, TST, Kowloon, Hong KongMedical / Healthcare

GlaxoSmithKlineTiffany LamGovernment Affairs ManagerTel [email protected]/F, Tower 6, The Gateway, 9 Canton Road, TST, Kowloon, Hong KongMedical / Healthcare

STARTUP ADDITIONALSmyth & CoDavina TurnbullAssociateTel 2216 [email protected]/F, Three Exchange Square, Central, Hong KongLegal

Smyth & CoJason CarmichaelPartnerTel 2216 [email protected]/F, Three Exchange Square, Central, Hong KongLegal

Smyth & CoAntony Sassi PartnerTel 2216 [email protected]/F, Three Exchange Square, Central, Hong KongLegal

STARTUPxTEChina Consulting LtdTim SummersManaging DirectorTel 3582 [email protected] 1307-8, 248 Queen’s Road East, Wan Chai, Hong KongConsultancy

Ashton Ford Consulting LimitedHelen Ford DirectorTel 6019 [email protected], Block 74, Bamboo Grove, 74-86 Kennedy Road, Wan Chai, Hong KongConsultancy


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Clifford Chance strengthens Finance Practice with senior maritime expertLeading international law firm Clifford Chance has announced that Alastair C. MacAulay will join its Hong Kong office as a partner to lead on maritime and offshore finance matters. “I’m delighted to welcome Alastair, who will be an excellent addition to our market leading asset finance team in Asia Pacific,” said Peter Charlton, Regional Managing Partner, Asia Pacific. “We are always looking for ways to strengthen our service to our clients. Alastair is one of the most highly regarded lawyers in his field. We will be able to provide a leading maritime finance capability in Asia Pacific and strengthen our global capability in this area.”Alastair focuses on asset and project finance, particularly in the transportation and energy sectors. He has acted on behalf of banks and financial institutions on a wide range of loan, guarantee, leasing and other credit transactions across multiple jurisdictions. He has particular expertise in LNG transportation and offshore maritime services as well as restructurings in the maritime sector. Alastair has been named a Star Individual, a Leading Shipping Lawyer and a Leading Asset Finance Lawyer by Chambers Global. Since 2004, he has been recognised as a Leading Asset Finance Lawyer by Asia Pacific Legal 500.

New tax partner at international accountancy firm MazarsMazars Greater China is strengthening its tax team with the arrival of Anthony Tam, who will be in charge of developing the tax practice in Mainland China. Anthony has more than 20 years of professional experience in international taxation as well as Hong Kong and China tax, specialising M&A and transfer pricing.Prior to joining Mazars, Anthony was a Tax Partner at the Canadian practice of a Big 4 firm before he was transferred to the Hong Kong practice of that firm in the late ’90s, eventually becoming the Deputy Tax Managing Partner of that firm’s Southern China tax practice (Hong Kong, Guangzhou, Shenzhen). He has an extensive experience in cross-border M&A projects in the Asian Pacific region including Mainland China, Hong Kong, Singapore, Thailand, Taiwan, Korea, Philippines and India.Anthony has a proven track record in transfer pricing in China, he was the advisor to two Bilateral Advance Pricing Agreements (“BAPA”): one of which is a complicated agreement involving export and domestic sales and payment of royalty. Both BAPAs were with Japan.As a tax specialist, Anthony has previously lectured in tax at the Canadian Institute of Chartered Accountants and the University of Toronto, and now gives China taxation lectures at the Tax Academy of Singapore, a tax school run by the Singapore Tax Authority, and is one of the two course directors of the Advanced Diploma in Taxation offered by the Hong Kong Institute of Certified Public Accountants, (“HKICPA”), which covers Hong Kong, China as well as international taxation. He is currently the Deputy Chair of the Tax Faculty of the HKICPA.

New partner Joins Howse Williams BowersHWB is expanding its corporate practice with the addition of new partner Peter Bradley. Peter Bradley joins HWB from Stephenson Harwood’s London office where he was a corporate finance Partner. Peter specialises in IPOs, M&A transactions and joint ventures. Peter previously practised as a partner in Hong Kong for a number of years and therefore has over 20 years’ extensive experience advising Asian clients both in the London and Asian markets on all matters relating to corporate, fundraising and M&A activities. His corporate finance experience includes IPOs, takeovers, acquisitions of companies and businesses, and fund-raising. His commercial experience covers distribution and franchising, agency, computer development contracts, airport franchise agreements, employment contracts, joint ventures, technology licensing, hotel management and technical services and the offering of securities by local companies overseas.

The 30% Club Launches in Hong Kong with 41 Leading Chairmen as Founding MembersIn March the Women’s Foundation announced the launch of the 30% Club Hong Kong — a group of chairmen and business leaders who are committed to increasing the representation of women on Hong Kong corporate boards. The 30% Club was then officially launched at an invitation-only event at the Asia Society, where the Chief Executive of Hong Kong, C.Y. Leung, gave a key note address on women on boards, and more generally, the contribution of women in business to the Hong Kong economy. Over 300 LegCo members, chairmen of Hong Kong-listed companies, CEOs, directors, professional service firms and business leaders were present at the launch.The club’s establishment follows quickly on the heels of Hong Kong Exchanges and Clearing’s decision last December to require all listed companies to report on their board diversity policy from September 2013, following a market consultation in the Autumn of 2012. The 30% Club is not a call for a quota; rather, the 30% Club supports sustainable business-led voluntary change to improve the current gender balance on Hong Kong boards. Members are asked to lend their name to the 30% Club and publicly support having more women on boards, support initiatives to build the pipeline of women for executive and non-executive roles, and assist in recruiting and spreading the word to other chairmen and key influencers.The club’s mission and its challenges are clear. At the moment women make up 10.7% of directors of all listed issuers in Hong Kong, a percentage that has not improved over the last five years. This compares to 15% in the U.K. and 16.1% in the U.S., according to Catalyst data. 40% of Hong Kong issuers have no female directors on their boards, while 37% of issuers have only one female director.

Osborne Delivers UK Spring Budget The UK’s 2013 Spring Budget was delivered in late March. The budget’s most notable features deal with changes to tax and allowances. Firstly, the personal allowance will increase to £10,000 from April 2014, a year earlier than originally expected. Secondly, from 2014/15 the lifetime allowance (the maximum amount of pension saving someone can build up over their life benefiting from tax relief) will reduce from £1.5 million to £1.25 million. At the same time the annual allowance (the amount of tax relieved pension saving that can be made in one year) will be reduced from £50,000 to £40,000. The Inheritance Tax nil rate band sees no difference, having been frozen at £325,000 until April 2018. A widely expected anti-avoidance rule (GAAR) has been confirmed which will tackle abusive tax avoidance schemes and which will be introduced from April 2013. There was also confirmation of a minor amendment to the Statutory Residence Test which was announced in 2012 and takes effect on April 6th this year. Another key feature is that the Single Tier State Pension brought forward to 2016.

CBRE Brings Home Six RICS 2013 Hong Kong Property Awards CBRE has been awarded six 2013 Hong Kong Property Awards from the Royal Institution of Chartered Surveyors (RICS). CBRE was the stand-out performer taking 6 from 12 categories at the RICS Hong Kong Annual Dinner on 14 March, which is attended by all the major real estate services firms and one of the most prominent property industry events in the Hong Kong calendar. The RICS Hong Kong Awards recognises the contribution and outstanding performance of real estate agencies, teams and individuals in the industry in Hong Kong. The 2013 Awards followed the successful launch in 2012, and aim to promote the talents and team spirit of surveyors, property developers, cost consultants, project managers and planners. CBRE won the Office Agency Team of the Year, Retail Agency Team of the Year, Industrial Agency Team of the Year, Project Management Team of the Year, Best Deal of the Year, Contribution to the Community Team of the Year.

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28 February 2013, PizzaExpress

Chris Lloyd (Leodan), Shirley Tsui (Dow Jones), Jessie Zhou (mandarinteacher.hk)

Felix Oehl (aeroporto), Cédric Thiry (SEED)

Lee-Anne Keats, Chris Thomas (Leodan), Maria Gomez (Terra Firma)

Stephanie Dixon and Jo Chapman (Flight Centre)

Scherzade Westwood (Oldham, Li & Nie), Patrick Williams (British Consulate-General)

Jules Lambe (Gaffer), Panee Ng (Popcorn Media Network Ltd), Edwin Sun (UTS)

William Chan (Barclay Simpson), Herry Cho (ING)

Maureen Mills and Annemay Harnett (Executive Homes) Chris Bryan (PwC), Andrea Demy (AGS Four Winds)

Thomas Knights (Darwin Rhodes), Chris Bryan (PwC)

Mark Czypionka (HKU), Christine Chester (Telmar) Patrick Eng (Connect), Hector Drake (FTI Consulting)

Andrea Démy (AGS Four Winds), Joann Chow (aeroporto)


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Britain in Hong Kong April 2013