Regulatory Environment Of Hong Kong

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1.Political- regulatory environment Political-regulatory environment According to World Bank Group(2016), Hong Kong is the fifth ease place of doing business with DTF score of 83.67, which means the regulation environment in Hong Kong helps the starting of a joint venture in general. This represents in the sector of paperwork for starting a business, burden of tax compliance, ease of enforcing a contract and the matters relating to trade. Political-regulatory risks Hong Kong is a free port and does not levy any customs tariff (i.e. border tax) on imports and exports. However, Hong Kong levies an excise duty on liquor (with an alcoholic strength of more than 30% by volume measured at a temperature of 20℃) of 100% of its value(Customs…show more content…
Figure1 Besides taxes, importing Whiskey to Hong Kong is subject to other regulations, such as license or permits, certificate of origin and health certificate etc (Yuen C. 2010). Whiskey traders in Hong Kong are required to apply for licenses or permits for the import, export, manufacture, storage or movement, which implies that traders need to apply for permit before they enter into the market(Yuen C. 2010). Moreover, importing Whiskey to Hong Kong and selling in Hong Kong are required to provide a Certificate of Origin, certifying the type, nature, quality and age of the liquor (Hong Kong Customs and excise department 2016). The regulations in Hong Kong is very strict for whiskey traders in terms of heavy taxes and additional requirements of importing whiskey. Despite these regulations, sales of whiskey can still earn profit as they are selling at a premium price compared with beer and wine. Whiskies are luxury products with high price and targeting at wealthy customers who are not very sensitive to price. The higher price will offset the cost and generate profits in total. Political opportunities Hong Kong is special administrative region of China. Since 2013 China and Hong Kong has signed the Closer Economic Partnership Arrangement(Agriculture & Food in China 2015). CEPA allows a zero percent tariff between Hong Kong and mainland China. So goods can be first imported by Hong Kong and then re-exported into the mainland.
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