Hong Kong Boosts Economy With ASEAN Free Trade Agreement
The trade agreements between Hong Kong and Brunei Darussalam, a member of the Association of Southeast Asian Nations (ASEAN) has taken effect on 20 October 2020. This is part of the broader Free Trade Agreement between Hong Kong and ASEAN. With this in place, trade and investment deals between both countries will expand in the days ahead.
The Hong Kong Government signed the Free Trade Agreement under the economic pact with the Association of Southeast Asian Nations (ASEAN). ASEAN members include Brunei, Indonesia, Thailand, Singapore, Malaysia, Philippines, Vietnam, Cambodia, Myanmar, and Laos. The agreement, which consisted of tariff reduction covered a variety of Hong Kong commodities such as jewellery, apparel, clothing accessories, toys, watches and clocks. As the tariff reduction will reduce the costs on imports and exports for both countries, this will result in making it more lucrative for businesses.
Brunei presents a magnitude of business opportunities in sectors like Telecommunications, Construction, Engineering, Education, Tourism and Travel, and Transport. The economic agreement will enable Hong Kong service providers to secure market access, allowing them to cultivate and develop within these sectors in Brunei.
According to the Free Trade Agreement, Brunei is obligated to provide commitments such as fair treatment of investment, protection and security of the investment, and guaranteed free transfer of investment and returns for Hong Kong enterprises.
Free Trade Agreements Between Hong Kong and ASEAN Members
Hong Kong and ASEAN inked their free trade and investment pact in November 2017 in a bid to fortify the economic cooperation between the countries. This meant that Hong Kong’s commitment to the agreement with other members, except for Cambodia, has taken into effect. This agreement covers tariffs, rules of origin, non-tariff measures, customs procedures, trade facilitation, trade remedies, technical barriers to trade, and sanitary measures. Moreover, the deal also tackles investment, economic and technical cooperation, dispute settlement mechanism, and other mutual interests between participating members.
Hong Kong has a unique advantage among Asia-Pacific countries due to its location and market access to Mainland China. Therefore, Hong Kong has a strategic advantage in serving as the bridge between China and Southeast Asia. In the last decade, the bilateral commodity trade between Hong Kong and the ASEAN region surged by 72 per cent, making them the second-largest trading partner.
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As part of the mandate, the Hong Kong Government has been checking on the taxes paid by the business community. To ensure business continuity in Hong Kong, it is imperative that your company is able to comply with the taxation policies and regulations established by the authorities. It is essential to gain knowledge of the tax regime of the country which you are operating in.
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