23 Oct 2017
Hong Kong Connection Opens Doors
Adding Hong Kong to its presence in the world’s premier international financial centres has opened doors to regional markets for Equiom, a global provider of trust and corporate services to corporations and high-net-worth individuals.
Sheila Dean, Global CEO, Equiom Group, said the Isle of Man-headquartered company entered the Asian market through its acquisition of AFP in Hong Kong in 2015, and further strengthened its position in the city by acquiring Equation in 2016 and Solid in 2017.
“While AFP gave us a platform in personal and corporate tax advisory and structuring services, Equation and Solid provided a greater capability to serve inbound foreign capital coming into the region, using Hong Kong as a base, with a broad range of business-outsourcing services,” she said.
With its established trade links, simple taxation system and rule of law, Hong Kong is globally perceived as a centre for doing business throughout Asia and particularly with Greater China, Ms Dean continued. She noted that the city’s extensive business community and support services mean that entrepreneurs from around the world choose Hong Kong as their platform for growth in the region.
“Going forward, we see Hong Kong as a hub for all the commercially less-accessible jurisdictions in the north of Asia,” Ms Dean said. “With an extensive and growing range of double-tax treaties and excellent transport links, it often makes sense to use Hong Kong as a holding company for businesses operating in multiple Asian countries.” Equiom aims to support its Hong Kong or global clients as they enter jurisdictions where the complexities of legal, tax and language can be challenging, she said.
“With an extensive and growing range of double-tax treaties and excellent transport links, it often makes sense to use Hong Kong as a holding company for businesses operating in multiple Asian countries.”
After Hong Kong, Equiom further expanded to Singapore (via acquisition) in 2016, and Japan in 2017. The group also has offices in Dubai, Abu Dhabi and Qatar in the Middle East; Jersey, Guernsey, the Isle of Man and the United Kingdom; as well as the British Virgin Islands and United States.
The role of Hong Kong, a nexus for Asia and the rest of the world, is as a key onshore, or near-shore, structuring jurisdiction for capital flows from the West seeking to invest in the region, Ms Dean said. It is also increasingly important for private and corporate investors from the Chinese mainland and other major outbound investment locations.
“From an inbound perspective, we help our clients navigate the local regulatory, legal and fiscal requirements of Hong Kong and surrounding jurisdictions and ensure the ongoing compliance of our clients’ structures and operations,” Ms Dean said. “We also provide cost-effective outsourced solutions, covering tax, human resources, finance and corporate secretarial, to allow our clients to focus on their core business.”
For outbound investment, the Hong Kong office provides quality service and liaison with other global offices in the client’s own language and time zone.
Since market entry, Equiom’s staff numbers in Hong Kong have grown to 50 (out of 120 across Asia, and more than 600 worldwide), including English, Mandarin and French-speaking personnel.
“We offer more complex services, such as fund structuring and aviation and yachting services alongside our core tax, accounting, payroll and company secretarial services to both private and corporate clients,” Ms Dean said.
This strategic business growth gives Equiom a solid position in the world’s fastest-growing private wealth region, worth an estimated US$166.5 trillion in 2016. According to a report from the Boston Consulting Group, the private wealth level in the Asia-Pacific will surpass that of Western Europe in 2017, and North America’s by 2019.
“In addition, 45 per cent of Asia’s billionaires are in China and the country has Asia’s largest spending population, so there is a definite ultra high net worth demographic and the demand is there. The Hurun Report estimates that China has 594 billionaires compared with 535 in the US,” said Ms Dean.
“Given these figures, it is evident that there is a tremendous amount of potential in the region. Having a strong presence in Asia-Pacific gives us access to a vast market and the opportunity to provide the full spectrum of our service offering.”
Ms Dean noted that the significantly more risk-averse banking environment is posing challenges to some companies. “We are looking to enable our clients through constructive discussions with banking partners and looking to provide access to alternative offshore options where there is an impasse in Hong Kong. We will continue to be a solutions-driven group – this is the same ethos that has served Hong Kong so well in the past,” she said.
“The cost of compliance is unavoidable, but we can assist our clients to minimise the impact of these demands on their everyday business.”
High on the group’s list of priorities is to expand to the mainland and build further specialist expertise in the regions where it is already present. At the same time, Ms Dean said, Equiom is considering opportunities in India, Indonesia, Malaysia and Vietnam, among others.
To explore potential business partnerships, Equiom attended last month’s “Think Asia, Think Hong Kong” promotional event, organised by the Hong Kong Trade Development Council (HKTDC) in London.
“At Equiom, we have a very good flow between our offices in the UK and Hong Kong and seek to gain both inbound and outbound business through this close cooperation,” said Ms Dean. “The event helped to make the most of this ongoing communication between our offices and to introduce our offering to new contacts involved in the region.”