Hong Kong Tax Alert: 24 January 2013
Islamic finance is one of the fastest growing segments in the international financial system. In recent years a number of Asia-Pacific jurisdictions such as Malaysia, Singapore and Japan have captured a significant portion of regional Islamic finance activity and have amended their tax law to facilitate this.
In order to maintain competitiveness as an international financial center and to increase investment flows between mainland China and the Middle East, the Government has now proposed tax and stamp duty legislation to facilitate the development of a market in Islamic bonds (known as “Sukuk” [pl.] or “Sakk” [sg.]) in Hong Kong.
Following a two month period of consultation on the proposed changes, legislation in the form of a bill (“the Bill”), gazetted on 28 December 2012, was introduced to the Legislative Council on 9 January 2013.
The purpose of this alert is to provide an overview of the Bill and comment on areas that may be of concern to those issuing or investing in sukuk.