Overview

Despite the recent surge in the number of companies from outside of Asia seeking a listing on the Hong Kong Stock Exchange, it remains the case that the vast majority of Hong Kong listed groups are Mainland Chinese or Hong Kong businesses. A characteristic of this market is that there is almost always one person or organization, or a close group of business associates or family members, that holds a controlling interest in Hong Kong listed companies. That characteristic – combined with the prevailing governance culture and the fact that the typical shareholder profile includes a significant domestic retail component – has resulted in a fairly heavily regulated regime governing dealings and arrangements between related persons.

The latest issue of Weil, Gotshal & Manges' Asia Alert also features an article on the recent enforcement action of China's Tax Circular 698 in the Jiangsu case and guidance regarding the application of Circular 698 toward indirect offshore transfers of ownership interests in Chinese assets.