Vorteile von Hongkong für Private Equity

Henning Schwarzkopf von der CHEURAM Consulting Group berichtet über die anhaltende und Bedeutung des Private Marktes in und für Hongkong.

In a speech at the Asia Private Equity Forum 2012 in Hong Kong, the Financial Secretary, John C. Tsang, confirmed that private equity is an important component of Hong Kong’s asset management business, as Asia has become a magnet for venture capital investment, largely on the back of developments in mainland China.

Total capital under management in private equity in Asia, he said, has been rising steadily in recent years to reach some USD360bn in 2011, or a 22% annual increase. Last year, Hong Kong ranked second for capital under management in the region, accounting for 19% of the total, and, together, Hong Kong and mainland China manage over half of total private equity in Asia.

Many of the top Asian venture capital firms have a presence in Hong Kong. “Hong Kong is home to around 375 private equity firms,” he added. “Over 250 of these companies have their regional headquarters in our city.”

He stressed that Hong Kong is an ideal launching pad for private equity funds seeking opportunities in mainland China. As China’s global financial centre, Hong Kong enjoys the best of both worlds; being deeply connected to China’s financial architecture, while, at the same time, Hong Kong’s international characteristics enable it to manage financial activities all around the world.

“The great advantage for private equity funds,” he continued, “is that they can access the Mainland markets by locating potential projects and investments in Hong Kong. Hong Kong has unparalleled experience and understanding of offshore RMB business, as well as a growing pool of RMB liquidity.”

Chan explained that investors can also reap rewards from the healthy appetite for IPOs. “The Hong Kong stock market, with its liquidity, attractive valuations and access to Asian investors, is a popular route for private equity-backed exits,” he noted.

Hong Kong has retained its world number one status for IPO funds raised in 2011, with more than 100 newly listed companies raising some USD36bn in Hong Kong.

Another feature he illustrated was the growing number of foreign firms listing in Hong Kong. Over the past couple of years, companies from Russia, France, Italy, Brazil, the US and Switzerland, as well as from across Asia, have listed in Hong Kong, and he confirmed that the government will continue to facilitate overseas companies listing in the city, without compromising investor protection.

He also pointed out the tax advantages for private equity in Hong Kong, including the lack of a capital gains tax on the sale of shares in private companies, while dividend income is also not subject to withholding tax and offshore funds are exempted from tax on profits derived from specified transactions in Hong Kong.

He confirmed that the abolition of estate duty in 2006 has been an incentive for local and overseas investors to hold assets in Hong Kong, while the government has also extended the stamp duty concession and enhancement measures for the Qualifying Debt Instrument Scheme, where profits tax concessions are provided to interest income and trading gains derived from certain types of debt instruments that meet the relevant criteria.

Finally, Chan said that the expansion of Hong Kong’s network of comprehensive agreements for the avoidance of double taxation with major economies helps to facilitate flows of trade, investment and talent between Hong Kong and the rest of the world. Since amending the Inland Revenue Ordinance in 2010, Hong Kong has signed double tax agreements with 17 trade and investment partners, and he disclosed that “more are in the pipeline”.