The Principality of Liechtenstein and Hong Kong strengthen economic ties

03.02.2012 The officials of the state of Liechtenstein and the Hong Kong special administrative region have recently discussed the future of fruitful economic cooperation between the jurisdictions. The meeting of representatives held in the capital of the principality - the city of Vaduz.

It was mentioned that the first step towards strengthening the economic ties between the two jurisdictions was an agreement on double taxation avoidance signed in 2010 (from 2011 it acts on the territory of Liechtenstein, from April 2012 it’ll be effective in Hong Kong). Under the agreement, the rate of dividends and interest on deposits for Hong Kong residents that receive income from Liechtenstein, is zero. The tax rate on royalty is nominal 3%, but at the moment royalties received by companies in Hong Kong from Liechtenstein, in fact, are not taxable, as Liechtenstein currently has no tax on royalties.

Expert’s opinion

“Taking into consideration the willingness of Liechtenstein and Hong Kong to strengthen economic cooperation, the next steps to develop effective incentives to attract investments to the appropriate territories are expected to be done by these jurisdictions.

Let’s recall that Hong Kong has been recognized the jurisdiction with the freest economics.

We believe that this fact played a major role in strengthening cooperation of the region with the countries of Europe, in particular, with Liechtenstein. Tax incentives in this situation are decisive”.

On the basis: www.tax-news.com

Andrianova Irina ( the leading lawyer of legal support and banking consulting department of Honest&Bright)