6 August 2014Actuarial & underwriting

Hong Kong ups the ante on captive insurance promotion

The Hong Kong government has introduced its newest policy in promoting its captive insurance industry at a seminar held in Beijing.

Speaking at the seminar, permanent secretary for Financial Services and the Treasury, Au King-chi, said: "Financial co-operation between Hong Kong and the mainland has all along been implemented in accordance with the 'mutually beneficial' principle."

She pointed out that Hong Kong possesses a highly efficient multi-currency capital formation platform, and has become a premier international financing centre for the mainland. As mainland enterprises start to "go global", the HKSAR Government hopes to encourage more of them to leverage the city's advantages to strengthen financial co-operation and development.

"On one hand, mainland enterprises can access world-class risk management services for their offshore business by forming captive insurers in Hong Kong. On the other hand, Hong Kong's insurance market will be broadened, achieving a mutually beneficial result," Au said.

"As many mainland enterprises are already conducting their financial activities in Hong Kong, there will be synergy if they also set up their captive insurers here. Being proximate to the mainland and sharing the same culture and language, Hong Kong is better placed than other financial centres in the region to be a domicile for captive insurers formed by mainland enterprises," she added.

The HKSAR Government hopes to attract more enterprises to set up their captive insurers in Hong Kong through this tax concession as well as through what it claims are fundamental strengths as an international financial centre, including a simple tax regime, the rule of law, ready supply of talent, free flow of information and capital, and a highly open operating environment.

The seminar, "Captive insurance business in Hong Kong for Chinese enterprises" was organised by China Taiping Insurance (HK) Co Ltd. About 40 representatives from mainland central enterprises and large corporations took part.

During her stay in Beijing, Au also called on the state-owned Assets Supervision and Administration Commission of the State Council and the China Overseas Development Association to encourage more mainland enterprises to make the best use of Hong Kong's financial platform in helping them "go global", and to further promote Hong Kong's status as a major RMB offshore centre.