Articles by Practice Area
- Hong Kong has commenced exchanging financial account information with other jurisdictions for tax purpose
- China is Reforming Its Individual Income Tax Rules – Are You Ready?
- OLN Nominated for Four Awards in the ALB Hong Kong Law Awards 2018
- How to be Eligible for the Treaty Benefits for China-sourced Passive Income under the New Rules?
- China Waives Work Permits for Hong Kong, Taiwan and Macau Residents
Items filtered by date: November 2017
We are proud to announce Oldham, Li and Nie were listed in ALB's magazine and were ranked 10th place for 2017's list of Hong Kong Law Firms.
The General Data Protection Regulation (GDPR), a single, pan-European law for data protection comes into force on 25 May 2018, operates to regulate the processing of personal data in the context of the activities of an establishment of a controller or a processor in EU, regardless of whether the processing takes place in EU or not.
However, when one harmonized set of regulations meets Blockchain, a decentralized and self-maintaining technology, how much can an individual be reassured that they can still maintain control over their personal data as promised under the GDPR?
Click here to read the article.
Hong Kong firm Oldham, Li & Nie (OLN) celebrates its 30th anniversary this month. John Kang talks to founding partner Gordon Oldham about his firm’s biggest growth, achievements and challenges in the past three decades.
ALB: What have been some of the most significant achievements for Oldham, Li & Nie?
Oldham: From my point of view, our most important achievement is reaching the point where we are now able to attract high calibre partners and associates to help grow the firm and widen our business base. The light bulb moment came when we realised that to grow, we had to upgrade the skills of our people. They say A-Grade people hire up, B-Grade people hire C-Grade people and C-Grade people don’t hire at all! We put this into practice and have attracted local and international talent who felt being a small cog in a big wheel, undertaking the 16-hour days, at large law firms wasn’t for them. Creating opportunities and an environment for capable people who want to shine in their own right has been very important to our business strategy.
ALB: In which practice areas are you seeing the biggest growth, and what has been driving it?
Oldham: We are mostly a business-centric firm and, of course, the key to such is a deep knowledge of accounting and finance. Being Hong Kong based, a lot of our work involves overseas and cross-border business transactions. Because of this, we created a tax department where our partners and associates are dual-qualified in both law and accounting. Indeed, tax and business advisory as well as our digital business group are driven by our focus on business related matters. Although, curiously enough we are also seeing continued growth in our matrimonial department given the financial implications of divorcing!
Needless to say, the untiring ability of tax authorities around the world to make tax more and more complicated has increased the need for familiarity with international tax regimes. Furthermore, the increase in business transactions undertaken digitally has dictated that we seize opportunities ahead of the curve. The advent of Bitcoin, ICOs and other digital exotica means we have to be in a constant learning mode and anticipate what is coming next.
ALB: What were some of the biggest challenges for OLN?
Oldham: The biggest challenge for most businesses is the transition from an entrepreneur-led enterprise to a fully-fledged business. OLN has brought in human resources managers who introduce skill sets – people managing – that lawyers aren’t necessarily always gifted with! In addition, having someone acting as the CEO, dedicated to the development of the firm as a business, has been hugely significant for us. It is surprising the number of firms that believe they can grow without the specific skill sets that one finds in a business development manager, human resources manager and CEO.
ALB: How has the Hong Kong legal market evolved in the past three decades, and how did OLN adapt?
Oldham: In common with business in general, the internet has democratized the Hong Kong legal market and taken away a lot of the issues that was previously associated with it.
We adopted a long time ago, not necessarily refined but certainly applicable mantra “Practical Legal Solutions - On Time - No Excuses”. The emphasis has always been on providing practical solutions that understand and address the clients’ needs. This practical approach arose from actually listening and adapting to our clients’ requirements!
ALB: What’s next for OLN? What are you most optimistic and not optimistic about?
Oldham: What I am optimistic and excited about is our ability to thrive and grow. We will continue to pursue the OLN business strategy of establishing business groups that cater for companies involved in both local and international business and providing these clients with tailored, practical and above all results oriented business solutions.
What I’m not optimistic about is that dispute resolution in Hong Kong seems to be getting slower and slower. Our Judiciary are amongst the finest in the world yet the support that they seem to be getting from the underlying government authorities seems to be sadly lacking. One of Hong Kong’s greatest claims is its adherence to the rule of law and the way that justice is dispensed within a timely and relevant manner. However it’s now embarrassing to say to a client that notwithstanding the fact that they have all of the merits of the case, it may be two or three years before it comes to a trial. It’s not just a question of increasing the number of judges, it’s giving judges more administrative support. Justice delayed is justice denied.
The Chief Executive, Mrs. Carrie Lam announced in her first Policy Address a wide range of measures with an aim to enhance Hong Kong’s competitiveness and reinforce Hong Kong’s position as an international financial and economic centre. This alert focuses on the tax related measures.
A two-tier profits tax system
For the purpose of mitigating the tax burden of Hong Kong enterprises (particular small and medium-sized enterprises (“SMEs”), a two-tier profits tax system is introduced. Under the proposal, the profits tax rate of the first HK$2 million of profits of enterprises will be lowered to 8.25% (i.e. half of the standard profits tax rate), and profits above will remain to be taxed at the standard profits tax rate of 16.5%.
To avoid abuse and ensure that the tax benefits will target SMEs which represent 98% of businesses in Hong Kong, it is apparent that there will be anti-avoidance provisions such that only one enterprise of a business group will be eligible for the lower tax rate. The definition of “business group” is nevertheless to be clarified at a later stage.
Super deduction for research and development ("R&D) expenditure
A super deduction for R&D expenditure is introduced to encourage more private expenditure on R&D and innovation and technology development. It was proposed that the first HK$2 million eligible R&D expenditure enjoy a 300% tax deduction with the remaining at 200%.
Expansion of double taxation agreement ("DTA") network
The Chief Executive expressed in the Policy Address the Government’s objective to expand Hong Kong’s DTA partners from currently 38 to 50 (especially those along the Belt and Road) over the next few years.
Based on the current available information, it goes without saying that SMEs, start-up enterprises and innovation and technology enterprises will be the most beneficial parties from the Policy Address in tax perspective. Having said that, the extent of tax benefits to which they can enjoy heavily depends on the drafting of the relevant legislation such as qualifying criteria, application process, anti-avoidance provisions, etc.
For a detailed discussion or any enquiry, please contact one of our members of the Tax Advisory team.