2020 was a remarkable year that reminded us how crucial it is for businesses to be prepared and expect the unexpected. The good news is that we also saw how quickly companies were able to adapt and adjust their business models. In particular, the digitalization timeline has been greatly accelerated, creating an operating environment that is here to stay.
At Tricor, we maintained our commitment to delivering high-quality, in-depth educational sessions – for free. For those who may have missed any of our updates, we have created a "Top 10" list. Each item includes a brief description of the relevant session, a link to any training material, as well as links to related thought-leadership articles.
Please enjoy our 2020 retrospective.
#1: From Plan to Action – Liquidation of a Company
There may be times when you need to wind down a company. We explore Hong Kong companies' liquidation options, ranging from remaining dormant to complete deregistration, laying out a complete action plan. This includes the necessary procedures, sample timelines, pre-liquidation considerations, and helpful case studies.
Distressed companies should also consider corporate restructuring. We take an overview of the restructuring landscape here.
#2: Common Pitfalls in Employer Tax Planning
We provide an overview of Hong Kong's tax structure and the primary tax obligations faced by employers. This includes information about the relevant statutes that businesses must comply with. Also, we take a closer look at the applicable penalties that every employer should strive to avoid, as well as the various benefits that could also be categorized as income – a common area where many employers encounter difficulties.
For efficient tax planning, firms must also be aware of their tax residency status in Hong Kong, which centres around the question of "economic substance" – a topic we investigate in further detail.
#3: Reducing Capital to Improve Your Cash Flow
Although most companies strive to increase their share capital, there may be times when this needs to be reduced. We analyze the various reasons and methods for doing so, including the "uniform solvency test" that companies must undertake if they wish to trim their capital without involving the courts. For company directors, we also highlight the key considerations they should call to mind before proceeding with a capital-reduction exercise.
As a supplement to the training session, you can read this article, which outlines what is needed to undertake a court-free capital- reduction process.
#4: Economic Substance Requirements in the British Virgin Islands
The British Virgin Islands is a prime destination for international corporates seeking to optimize their tax structures.
Our team breaks down what it takes to meet the jurisdiction's economic substance requirements. The study takes a general overview of the specific prerequisites, sorted by legal entity type. We also explore compliance timelines, non-compliance penalties, as well as compliance and reporting planning.
As a companion piece, you can also read our article on establishing economic substance in another tax-advantaged territory – the Cayman Islands. We review the key regulatory changes for both these territories in a separate piece here.
#5: Your Essential Checklist for Moving to or Investing in Canada
Canada's status as a top immigration and investment destination for Hong Kong is well established. Yet, the process is not as straightforward as it seems, with various roadblocks to navigate – especially when it comes to asset protection and estate planning.
We consider the use of private trust vehicles to invest in Canada, as well as the core principles of the country's tax regimes prospective investors or immigrants must know about. Our team also takes a look at pre-immigration planning and the different investment options you can undertake, from commercial real estate to private equity.
This connected piece provides more information on the benefits of the trust structure for estate and succession planning.
#6: Family Inheritance Seminar: Trust Taxation, Overseas Immigration
For high-net-worth individuals, trusts are one of the most common and useful vehicles for protecting their assets and securely passing these on to the next generation. Here, we navigate the structure and benefits of trusts and explore how different scenarios – such as marriage, emigration, taxation, and inheritance – can affect their use. We also take a global perspective, looking at important considerations when acting in different jurisdictions.
This session is presented in Mandarin. For English-language details on trusts, we cover their use in estate and succession planning for private families in this article here. Private trusts are also entering 2021 on steady footing, with the pandemic actually increasing their popularity. In this article, we explore the reasons for this rise.
#7: Empowering General Meetings - Amendment to Articles of Association
With remote meetings now firmly entrenched as part of the "new normal", even shareholders' general meetings must adapt. There are two aspects to this – procedural and logistical. From a procedural standpoint, a company's Articles of Association must empower the new normal for general meetings. Amendments may thus be necessary, and we go over the steps for doing so in detail.
As for the logistics aspect, "hybrid AGMs" must be adequately supported by technological capabilities such as online voting and instant document sharing. This article discusses how to effectively use technology to overcome the challenges and conduct a successful hybrid AGM.
While technologically enabled hybrid AGMs have emerged as an effective adaptation to the pandemic, it is just one part of the new digital corporate governance model. We look at how companies are digitally transforming their corporate governance structures, complete with sample case studies. Also included is a review of some specific technology platforms that can assist with this transition.
A crucial part of enabling any digital corporate governance transformation is obtaining management buy-in. We present a compelling argument for why corporate leaders should embrace digital corporate governance sooner rather than later.
#9: Virtual Board Meeting: The New Normal for Boards
Another aspect of the broader digital corporate governance structure that has arisen in response to the pandemic is the digital boardroom. Just like hybrid AGMs, virtual board meetings have become part of the new normal. Given the importance of well-run and documented board meetings to a company's overall governance, a digital transition must be planned and executed correctly.
We review the vital elements of a virtual board meeting, essential considerations for running one, and how they fit into the larger corporate governance structure. We further explore how they contribute to more robust corporate governance in this article.
#10: Interpretation of Employment (Amendment) Ordinance 2007
Although the provisions under the Employment (Amendment) Ordinance 2007 have been in effect for over 13 years, it still represents a common source of confusion in employers' tax planning. Here we review how an employee's wages are defined under the law and the correct way to calculate their statutory entitlements. Relevant case studies are included.
On the topic of employee benefits, an increasingly common structure that is being driven by greater IPO activity is the employee benefit trust. We investigate this structure, including the reasons why it is proving so attractive to companies.
2021 – Another Year of Change and Growth
2021 is shaping up to be another year of rapid change and necessary adaptation. On our part, we will continue to highlight and interpret market and industry trends for the benefit of our clients and the wider business community.