Re-structuring in Hong Kong

Owing to the bleak economic conditions in Europe over the last three years, investment and development projects were put on hold by European investors. However, times are changing, with European companies looking again towards Asia. Headquarters are now willing to rationalise and restructure their assets in the region.

Groups of companies are increasingly restructuring their network in the region through holdings that they locate in Hong Kong without hesitation. The idea is to consolidate the different companies which have been randomly set up or purchased, optimise financial flows among the group of companies in the region, and take advantage of the developing network of double taxation agreements. Whereas traditionally the choice for the location of such a holding was between Hong Kong, Shanghai, and Singapore, today Hong Kong seems to be the winner.

Indeed, Hong Kong enjoys a great number of benefits— more than 40 double taxation agreements currently in force, coupled with numerous commercial treaties and agreements with China (CEPA, Trade Processing Agreements, etc.), and a unique role as the global hub of choice for RMB transaction. Besides, Hong Kong remains the largest financial centre in Asia with an easily readable tax system, a dynamic commercial legislation, and a grade A logistics hub, including the leading airport for commercial freight in the world.

This trend is verified by the fact that FDI (foreign direct investment) in mainland China through Hong Kong is back to the level from 10 years ago. After the 2008 financial crisis, FDI from Hong Kong dropped to a low 30%. Currently, it is home to as much as 70% of total world FDI in mainland China.

Mainland China’s economic model is undergoing a profound change. Today, it’s more oriented towards consumption, new technologies, and services. The traditional model of an economy strictly based on production is rapidly disappearing. This transformation is attracting investors who, themselves, need to be organized and efficient in order to cope with the challenges ahead. Hence, the need for a reorganisation of groups, which too often have grown without a rational policy as opportunities arose. It is now a necessity to be efficient and rationalise structures, flows, and decision making processes.

TMA is a key player
Corporate lawyers are keys in this process because they advise on tax, contracts, and company restructuring. TMA is a key player in this restructuring process owing to its more than 20 years of experience and its efficient professional network throughout the region.
TMA implements efficient solutions based on experience and its thorough knowledge of the legal mechanisms aiming at rationalising and consolidating, taking into account tax and legal issues.

THOMAS, MAYER & ASSOCIES (TMA) is a French law firm established in Hong Kong in 1995. TMA specialises in the economic migration of companies from Europe to Asia. TMA provides its clients with the possibility to carry out their investment projects owing to technical solutions based on its in-depth knowledge of the economic and legal environments of these regions, together with its more than 20 years of experience in the commercial and legal practices of the relevant countries.