GBA Digest series of perspectives Issue 2
The Cross-boundary Wealth Management Connect (WMC) Pilot Scheme was successfully launched in September 2021, and since then many banks in the Greater Bay Area (GBA) – 21 in the Chinese Mainland, 19 in Hong Kong, and eight in Macao – have commenced cross boundary wealth management services for GBA residents.
The integration of financial markets within the GBA made further progress in the last quarter of 2021. On 21 October 2021, the People’s Bank of China (PBOC) and Hong Kong Monetary Authority (HKMA) announced a new Memorandum of Understanding on Fintech Innovation Supervisory Cooperation in the Guangdong-Hong Kong-Macao Greater Bay Area. Under this MOU, the PBOC’s Fintech Innovation Regulatory Facility and the HKMA’s Fintech Supervisory Sandbox are linked to form a "one-stop platform" to expedite the launch of fintech products and reduce development costs. We echo the sentiments of Eddie Yue, Chief Executive of the HKMA, who anticipates that this arrangement will strengthen fintech supervisory exchange in an environment of rapidly advancing technology.
The establishment of Qianhai Shenzhen-Hong Kong International Financial City, which was announced in late October 2021, is another key initiative. It is part of the Plan for Comprehensive Deepening Reform and Opening Up of the Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone announced in early September. We have heard the optimistic views from many Hong Kong-based local and foreign financial institutions and fintech companies who would consider establishing new sales functions or operations centers in the new International Financial City to support their business expansion in the GBA and beyond. In addition, there will be a range of business incentives such as funding support, office facilities, talent resources, and tax incentives, and we are pleased to share more details of these with you in this issue of GBA Digest.
In around four years, we have seen tremendous growth in the GBA, with the results obvious to all. As many companies in the Chinese Mainland, Hong Kong, and Macao, and foreign multinationals, are planning to expand their businesses by investing in the GBA, we have invited our tax experts to analyse the key factors giving rise to tax implications, at both the corporate and individual level, for companies investing in the Greater Bay Area.
We are now approaching the festive season, which could see the long-awaited reopening of the border between Hong Kong, Macao, and the Chinese Mainland after almost two years of travel restrictions due to the COVID-19 pandemic. The visit of the delegation of Mainland health experts and officials to Hong Kong at the end of November brought hope that the border will open at a certain time, we expect cross-boundary business to return to its pre-COVID level and soon exceed that.
There are now increasing concerns about data security and user privacy protection, especially when this involves cross-boundary data transfer, and the Central Government recently rolled out a set of new regulations and guidelines to strengthen China's data security and protection. Companies with cross-boundary business must update their privacy policies and terms of service according to these new regulations and anticipate any potential compliance risks. In this issue, our specialists guide companies and practitioners in explaining the key areas of focus and sharing their insights and solutions.
Last but not least, we wish you every success in closing 2021 and hope this newsletter gives you lots of great ideas for planning the New Year ahead.
2nd GBA Digest Key topics:
Exploring new opportunities: Qianhai Shenzhen – Hong Kong International Financial City
Tax strategies: Investing in the Guangdong – Hong Kong – Macao Greater Bay Area
China's new cybersecurity review regulations bring cross-border data security into focus