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HSBC is concerning the new headquarters location because of two huge reasons: the bank ring-fencing rules and the rising tax levy launched by UK government (CityA.M., 2015). The ring-fencing rules means to separate deposit-holding retail banking from investing bank, which rise the capital needed when no capital flow freely between these two kinds of bank (CityA.M., 2015). The 11 criteria are used by HSBC to estimate which city to stay (Reuters, 2015). “Economic importance and future growth” between these three countries are obvious that Hong Kong is enjoying the benefits of rapid development of Asian countries ($14.9 trillion between 2014 and 2025). From the map, we can see Hong Kong and London has the advantages on “scale of…show more content…
“High Transparency International score”, Canada ranked highest as 10th when UK in 14th and Hong in 17th (figure5) (Transparency International, 2015). The ranking of Hong Kong is believed to be worsen as the weakening “one country, two systems” when China is actually in 100th on her ranking (figure6) (Transparency International, 2015). Figure 6 Figure 6 Figure5 Hong Kong, Toronto and London are Global Finance Centre and get fame in their economic status. They would be able to attract different talents to involve in the financial contribution. Therefore, the result would be fair between these three places when it comes to “ability to attract and retain top talent”. Government policies towards bank sectors include the tax rates, law, policy and regulation imposed, which seriously affect whether the condition and environment is healthy and suitable to run a international bank there. UK posed high tax rate and ring-fencing rules, which it the main reason for HSBC to leave. A move to Hong Kong could save HSBC about $900 million or more a year. However, same amount of capital should be maintained, which impose no help to the effect of ring-fencing rules. Canada has a higher basic corporate tax rate than the UK but does not impose a profit surcharge, which mean the total tax expense is relatively lower

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