An increasing number of companies are seeking to gain more control and efficiency in their treasury operations and mitigate financial risks by setting up regional treasury centers in Asia.

China firms' going global gives Hong Kong major hub role

In recent years, China's focus has shifted from buying what the country needs to what it wants; it has gone from basic resources to assets such as brands and technology that cater to the demands of an affluent consumer society.

This is all part of the evolution of China's overseas direct investment (ODI). Investment in the Belt and Road region is showing a similar trend. At the same time, the profile of those doing the buying has changed; Chinese private-sector companies are now overtaking state-owned enterprises (SOEs) as the major outbound investors.

A major driver of China's going-out strategy is to internationalize its currency, the renminbi. Hong Kong, as one of the largest recipients of China's investments and the first largest offshore clearing center, has a big role to play in this. Increased regional capital expenditure spend is expected to have a significant element of renminbi investment, resulting in its increased use as a trade, transaction and cash-management currency.

In addition, Hong Kong is expected to remain the preferred location for regional treasury centers of both Chinese and international institutions directly participating in the Belt and Road strategy in South-east Asia, resulting in increased capital and project finance through the Mainland China.

Global CPA tax services are helping international group (Chinese group) to structure and manage its Treasury and cash pooling center in a tax efficient way

• Restructuring of assets, liabilities, income and profit for qualified scheme of Treasury Center

• Preparing tax declaration in view of Treasury Center

• Annual review of the current scheme of Treasury center to ensure compliance

• Tax profile (e.g., company, withholding)

• Double tax treaty network

• Foreign tax credit

• Thin capitalization rules

Global CPA are willing to understand the current business model of your group, your operational, organizational and financial challenges, limits and opportunities, as well as your commercial and financial strategy. Then, our multidisciplinary team, including tax and regulatory experts will help you to address the opportunities they have identified.