David Kerr, EMEA commercial director at TMF Group, explains why establishing an entity in Hong Kong can provide an attractive entry point to the Chinese market
Hong Kong: A Gateway to China for Luxury Companies
Over the last decade, collaborations between luxury brands and contemporary artists have gone beyond mere artistic partnerships towards a new kind of luxury branding.
PARIS – Art and fashion have always developed side by side, for fashion, like art, often gives visual expression to the cultural zeitgeist. During the 1920s, Salvador Dalí created dresses for Coco Chanel and Elsa Schiapparelli. In the 1930s, Ferragamo’s shoes commissioned designs for advertisements from Futurist painter Lucio Venna, while Gianni Versace commissioned works from artists such as Alighiero Boetti and Roy Lichtenstein for the launch of his collections. Yves Saint Laurent’s vast art collection, recently auctioned at Christie’s in Paris, testified to his great love of art and revealed the influence of a variety of artists on his own designs.
In the 1980s, relationships between luxury brands and artists were advanced when Alain Dominique Perrin created the Fondation Cartier. In the Fondation Cartier pour l’Art Contemporain, a book marking the foundation’s 20th anniversary, Perrin says he makes “a connection between all the different sorts of arts, and luxury goods are a kind of art. Luxury goods are handicrafts of art, applied art.”
The Fondation Cartier pour l’Art Contemparain building in Paris
David Kerr, EMEA commercial director at TMF Group, explains why establishing an entity in Hong Kong can provide an attractive entry point to the Chinese market
David Kerr, EMEA commercial director at TMF Group, explains why establishing an entity in Hong Kong can provide an attractive entry point to the Chinese market
The Registrar of Companies in Hong Kong normally takes four working days to issue a Certificate of Incorporation (COI) upon receipt of a completed set of hard copies of incorporation documents. For e-registration, the Registrar would issue a COI within 24 hours upon receipt of the specified incorporation documents and fees.
A total of 77,991 new local companies were registered in Hong Kong during the first half of 2011. Last year was a record high, with 139,530 local companies newly registered.
The jurisdiction offers a well-developed, open financial and trade infrastructure, as well as potential tax exemption on trade income due to its territorial tax system, and there is no withholding tax on dividend or interest. Hong Kong’s common law legal system provides a sound and effective regulatory regime, promoting good corporate governance and protecting investor rights.
“ Approximate incorporation time for foreign investment: 1-4 working days ”
Hong Kong’s unique relationship with China allows trade to be conducted in Chinese Renminbi (RMB). However, there remain some challenges for investors – for example, opening a company bank account is slightly more time-consuming due to the high reputational compliance standard Hong Kong has.
Suzanne Callister, head of corporate Asia-Pacific, explains: “At present, we are seeing a lot of US and European businesses globalizing their footprint and entering Asia via Hong Kong."
“We are seeing particular interest from businesses within the luxury goods, fashion and retail sectors looking to establish in Asia. Hong Kong is often used as the first step. We attribute this to its good infrastructure, excellent banking system and strong legal system for potential dispute resolution.”
“ Hong Kong VAT rate: no VAT regime ”
Under ‘one country, two systems’, Hong Kong is a special administrative region of China, enjoying the best withholding tax treaty rates with China. These include dividend (5%), interest (7%) and royalty (7%).
Further, the Closer Economic Partnership Arrangement (CEPA) is a free trade agreement signed between Hong Kong and Mainland China offering favourable conditions on qualifying trade and investments to Hong Kong-based companies interested in exporting goods or expanding their business into Mainland China.
If the business of a Hong Kong-based company satisfies certain CEPA criteria, it will qualify for duty-free export status to China.
To further investigate the Chinese luxury market on Luxury Society, we invite your to explore the related materials as follows:
– Bringing Fine Wines to the Chinese Market: Sarment
– The Most Sought-After Luxury Watch Brands in China
– PPR’s Push Into Mainland China