With over 230,000 financial services professionals, 159 banks (including 70 out of the world’s 100 largest), and over 9,000 registered lawyers working at some 822 law firms, our Hong Kong Trust Members are spoilt for financial choice and legal advice. Standard & Poor’s rates Hong Kong at AAA. Moody’s awards it Aa1 and Fitch AA+.
Its government debt stands at 32% of GDP as opposed to the United Kingdom’s 114%, Spain’s 105%, Portugal’s 135%, Malta’s 73%, and an OECD average of 113%.
As a city with a long history of facilitating trade between China and the West, Hong Kong has played a key role in helping China integrate with the global free market economy.
Hong Kong law is based on Common law. Its courts rigorously apply the Rule of Law. Its Trust Law is among the most modern in the world. Hong Kong is not a tax haven. It is a well regulated jurisdiction which is engaged in promoting sound financial practices through its membership of global bodies. As a member of the Financial Action Task Force, it holds jurisdictional equivalence for Anti-Money Laundering and Counter Terrorist Financing with New York and London.
It contributes to the development of global pension standards through its chair of the International Organization of Pension Supervisors’ Technical Committee. Hong Kong’s Securities and Futures Commission is a member of the Presidents Committee of the International Organization of Securities Commissions.
The Heritage Foundation lists Hong Kong to be the freest economy in the world. It is certainly one of the most attractive: as at the time of writing, Bloomberg estimates Hong Kong’s stock market valuation of USD4tr to be bigger than that of the Tokyo, suggesting Hong Kong now lies third behind only New York and London.
Hong Kong’s abolition of both Inheritance Tax and laws against perpetual Trusts give rise to some interesting estate planning opportunities. 27 of the 32 Double Taxation Agreements Hong Kong has signed with the rest of the world assign taxing rights on Hong Kong-sourced pensions to Hong Kong. And Hong Kong applies no Capital Gains Tax on pension growth or Income Tax on pension distributions.
Its pension regime also gives anyone the right to establish a pension here, no matter where they live or work, and it lets them do this with no restriction on investments. Its open architecture pension structure makes Hong Kong a very attractive place to establish a global retirement plan.
Hong Kong Regulatory Authority
Hong Kong’s Mandatory Provident Fund Schemes Authority (MPFA) regulates Occupational Retirement Plans . The MPFA’s functions include, but are not limited to, the following:
• Responsibility for ensuring compliance with the Occupational Retirement Schemes Ordinance (ORSO).
• Registering Provident Fund Schemes as Registered Schemes.
• Approving qualified persons to be approved Trustee of registered Schemes.
• Regulating the affairs and activities of approved Trustees.
• To ensure, as far as is reasonably practicable, that Trustees administer the registered Schemes for which they are responsible in a prudent manner.
• Making rules or guidelines for the payment of mandatory contributions and for the administration of registered Schemes with respect to those contributions.
• Considering and proposing reforms of the law relating to Occupational Retirement Schemes or Provident Fund Schemes.
• Promoting and encouraging the development of the Retirement Scheme industry in Hong Kong, including the adoption of a high standard of conduct and sound prudent business practices by the Trustee and other service providers. The MPFA also acts as Registrar of Occupational Retirement Schemes as provided under section 5(1) of the Occupational Retirement Schemes Ordinance (Chapter 426, Laws of Hong Kong).
The ORSO came into force on 15 October 1993, and is the governing legislation for the regulation of voluntary Occupational Retirement Schemes operating in or from Hong Kong. The ORSO aims to regulate the Retirement Schemes industry through a registration system to ensure that all voluntarily established ORSO Schemes are adequately funded and properly administered, and to provide greater certainty that Retirement Scheme benefits promised to employees will be paid when they fall due.
The Ordinance applies to all ORSO Schemes operated in and from Hong Kong. It also covers Offshore Schemes (i.e. Schemes whose domicile is outside Hong Kong, where the Scheme or Trust is governed by a foreign system of law) which provide retirement benefits to Members employed in Hong Kong. All ORSO Schemes must be registered or granted an exemption certificate by the Registrar in accordance with ORSO. The rules of individual ORSO Schemes such as coverage, enrollment arrangements, contribution rate and vesting scale are specified in the respective governing rules of the Schemes.