01 Jul Double taxation agreement with Hong Kong signed but not ratified yet
The double taxation agreement between Malta and Hong Kong has been signed but still has to be ratified and come into effect.
Usually, some months elapse between the signing and the ratification and usually too the coming into effect takes place at the beginning of a financial year. Simon Galpin, director-general of InvestHK, paid a one-day visit to Malta in July.
During this short visit, Mr Galpin gave an interview to the Malta Business Weekly in which he spoke about Hong Kong and InvestHK which was established in July 2000 (www.investhk.gov.hk) and is the Hong Kong Government’s Department responsible for attracting foreign direct investment to Hong Kong. The department helps overseas companies that want to set up an office in Hong Kong. Over the past 11 years, it has attracted and assisted over 2,400 foreign and Mainland Chinese companies to set up or expand in Hong Kong. Many overseas companies, including Maltese, choose Hong Kong to enter the Mainland Chinese market and even the Asia-Pacific region. And, at the same time, Mainland Chinese companies settle down in Hong Kong to enter the Western markets.
The fact that the double taxation agreement has been negotiated and signed between the two countries, Mr Galpin said, is a sign of the very good relations between Malta and Hong Kong. Even before it gets ratified, such an agreement is a sign that Malta has now reached the level of countries that already enjoy a double taxation agreement with Hong Kong.
Being on this list is an important marker for Malta especially in the financial services sector. There is a lot of interest, especially from Malta Enterprise, on the ratification process as this agreement is seen as opening doors that were previously closed to Maltese businessmen.
The Hong Kong business sector does not have any relationship with North Africa, which on the whole is an underserved area as far as Hong Kong is involved. So Malta’s links with this area are perceived to be very important by the Hong Kong government sectors.
Though the Hong Kong economy is slowing down because of the international situation, it expects a 1-3% growth for 2012. Unemployment is low at 3.4%. Inflation, on the other hand, is still high at 5.9% coming down from 6.4% in the fourth quarter of 2011. Hong Kong is extremely important because it is the best gateway to doing business with China. Companies, especially those who have never before traded with China find it easier to do so through Hong Kong. It has the financial intermediaries, the infrastructure, and the cultural mediation to enable and facilitate such trade exchanges.