China to welcome more foreign investments
Since early this year, the Chinese government has released various circulars to promote and attract foreign investments. The key policies refer to further relaxation of the access restriction on foreign capital, formulation of fiscal and taxation incentives, improvement of the investment environment for state level economic development zones, facilitation of talent entrance and exit, as well as optimizing business environment. The major features are as follows:
Super-connector role of Hong Kong – New double tax agreement with Saudi Arabia
Hong Kong has recently signed a comprehensive avoidance of double taxation agreement (CDTA) with Saudi Arabia. This brings the number of CDTAs Hong Kong has concluded with other jurisdictions to 38. It is expected that Hong Kong will sign more and more CDTAs with other jurisdictions and in particular, with the Belt and Road countries (e.g. Saudi Arabia). The CDTA with Saudi Arabia contains favorable provisions which are expected to facilitate closer economic ties between Hong Kong and Saudi Arabia. The CDTA will only come into force in the tax year following the calendar year in which the relevant ratification procedures are completed. If the ratification procedures can be completed in 2017, the CDTA shall become effective in Hong Kong for any year of assessment beginning on or after 1 April 2018; and shall become effective in Saudi Arabia for any tax period beginning on or after 1 January 2018.