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India, Hong Kong plan double tax avoidance pact
December, 15th 2007
India and Hong Kong have agreed to work towards a double taxation avoidance agreement (DTAA). Plans are also afoot to start negotiations next week on the Air Services agreement so as to increase the number of direct flights between Hong Kong and Delhi as well as Hong Kong and Mumbai.

Both the sides have agreed to reopen negotiations towards an investment promotion and protection agreement. These decisions were taken at a meeting that Hong Kongs Financial Secretary, Mr John C Tsang, had with the Union Finance Minister, Mr P Chidambaram, here today, a Hong Kong government official told Business Line.

Trade observers point out that increase in direct flights would give further boost to economic ties between the two countries.

I hope to see increased number of direct flights between Hong Kong and Delhi as well as Hong Kong and Mumbai, Mr Christopher Jackson, Director, Corporate Development, Hong Kong Trade Development Council said.

Meanwhile, Mr Tsang on Friday asked Indian companies to make use of the closer economic partnership arrangement (CEPA), a free trade agreement between Hong Kong and China, to access the Mainland market. He also wanted Indian companies to look at Hong Kong stock market as a source of capital and diversification for their fund raising activities.

Under the concept of one country two systems, Hong Kong remains a separate member of the World Trade Organisation (WTO). CEPA was launched in mid-2003 and offers Hong Kong companies enhanced access to the Mainland above Chinas WTO commitments in both manufacturing and services.

Mr Tsang highlighted that Hong Kong had a nationality neutral policy and that foreign services firms incorporated in Hong Kong can leverage on CEPA to do business in the Mainland. Under CEPA, currently 27 service sectors enjoy enhanced access. Another 11 services sector would be added to the list from January 1 next year.

For new arrivals wishing to benefit from CEPA, there are plenty of opportunities to partner with companies already in Hong Kong. It is also worth noting that CEPA applies nationally in every province of China, he said.

 
 
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