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Manulifes local unit to redomicile from Bermuda in November

4 days ago

Manulife International the biggest pension provider in the city plans to redomicile to Hong Kong from Bermuda in November indicating its confidence in the city as an international financial centre according to a notice it sent to customers on Friday This makes Manulife International the Hong Kong and Macau unit of Torontoheadquartered Manulife Financial the second insurer to incorporate in Hong Kong after a new game changer law easing the redomiciliation process came into effect on May 23 Rival AXA announced a similar move soon after the change The legislation allows companies to establish themselves in the city while retaining their legal identity and business continuity Previously a redomiciling company had to wind up its existing entity and shift all assets and transactions to Hong Kong Manulife said in a customer notice that its decision reflected confidence in Hong Kong as a premier international financial hub Redomiciling to Hong Kong allows us to better align with the citys robust financial and regulatory environment strengthening our ability to meet local market needs said Patrick Graham CEO of Manulife Hong Kong and Macau The decision came shortly after Secretary for Financial Services and the Treasury Christopher Hui Chingyu conducted a roadshow to several Canadian cities last week to promote Hong Kong including the new regulatory regime The simplified process would attract more local insurers and other companies incorporated in Bermuda or other tax havens to redomicile to Hong Kong said Karina Wong Greater China divisional president of CPA Australia an accounting industry body Many insurance companies or other corporations set up in Bermuda or other tax havens as they do not charge any profit tax and have minimum disclosure requirements Wong said However under a changing global tax environment Bermuda will soon charge income tax for large multinationals with annual returns of 750 million US858 million or more If these companies do not redomicile to Hong Kong they may need to pay tax to both Bermuda and Hong Kong she said Having more insurance companies and other firms redomicile to Hong Kong would benefit the city as these companies would need to hire staff rent offices and use professional accounting tax advisory legal and secretarial services After these companies redomicile to Hong Kong they can also expand their business further in wealth management and family offices she added Twelve large insurers in Hong Kong including AIA AXA Manulife and FWD are incorporated in Bermuda Besides a lower corporate tax rate many insurers chose to set up in Bermuda because Hong Kong until 2006 had an estate duty ranging from HK100 US1280 to as much as 50 per cent of the value of the assets passed on to beneficiaries such as property stocks funds and insurance policies Insurance policies sold in Hong Kong by companies domiciled elsewhere were not subject to the estate duty Even after the city abolished the duty in 2006 the redomiciliation process was complicated until the new law came about

Enoch Yiu

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