HK changing tax laws to allow sale of sukuk

HONG Kong is changing its tax laws to allow the sale of Islamic bonds, or sukuk, its financial secretary John Tsang (picture) said.

"We're also enhancing market infrastructure and product development and educating market participants and investors in raising the profile of Hong Kong as an Islamic finance platform," he said at a business luncheon in Kuala Lumpur yesterday.

Hong Kong wants to use its position as the main financial gateway to China by bridging investment opportunities between Muslim economies like Malaysia and the mainland.

Malaysia is helping Hong Kong to develop an Islamic finance market following an agreement between the financial regulators of both countries last year.

Hong Kong's economy is heading for 4-5 per cent growth this year and its government has identified six industries as key engines of future economic development: educational services, medical services, testing and certification, innovation and technology, environmental industries, and cultural and creative industries.

To a question on a common currency for mainland China and Hong Kong, Tsang said there was no intention to move in this direction as Hong Kong's link to the US dollar has been operating well for the past 27 years.

"We're doing a lot to make the renminbi as the regional currency. We shall continue to strengthen our role as the testing ground for the regionalisation and internationalisation of renminbi," he said.

Link: http://www.btimes.com.my/Current_News/BTIMES/articles/rup01803/Article/

Hong Kong to seize Islamic finance opportunity

The huge market potential of the Islamic finance sector as shown by double-digit growth for Shariah compliant assets over the past decade had driven Islamic financers to look beyond historical boundaries to explore new territories, both within and outside the Muslim world, the Secretary for Financial Services and the Treasury, Professor K C Chan, said in Tokyo today (November 11). Speaking at the Islamic Finance Symposium 2009 hosted by Nikkei Inc, Professor Chan said that Hong Kong, being an international financial centre, was movingahead to put in place a conducive platform for the development of Islamic finance. "We believe Hong Kong is well placed to become a centre for Islamic finance in Asia.

Our sound financial services infrastructure and well-established legal system make Hong Kong an attractive location for such investments," he said. Professor Chan said many conventional and reputable financial institutions had entered the market and offering products such as sukuk as well as offering asset management service driven by the accumulation of wealth of both individuals and institutions, in particular in the Gulf and emerging Asia. A unique advantage for Hong Kong, Professor Chan said, was its unrivalled role in bridging the Mainland, the world's fastest growing economic giant, to the international market.

He said by bridging the investment needs from the Middle East and the capital needs in the Mainland, Hong Kong could be the trusted platform in linking the East and West - the new Silk Road. Professor Chan briefed his audience that the Hong Kong Government was preparing legislative amendments to the tax regime with a view to levelling the playing field for sukuk vis-a-vis conventional bonds. Before concluding his visit in Tokyo, Professor Chan visited the Tokyo Stock Exchange where he was briefed by President and CEO Mr Atsushi Saito on the latest development of Japan's equities market.

Professor Chan will return to Hong Kong tonight.

Source: HKSAR Government