Britain in Hong Kong October 2012 by The British Chamber of Commerce

Britain

IN HONG KONG October 2012

Vol 27

w w w.britcham.com

No 8

Funding for SMEs

Not For Sale

London Gateway

28071_BCO_Oct-1.indd 1

Effective Networking

Origins of Poppy Day

12年10月22日上午9:41

28071_BCO_Oct-1.indd 2

12年10月22日上午9:42

Contents Origins of Poppy Day

Funding for SMEs

YES SIAM !

4 Chairman’s Message

24 Networking to Gain Sales

6 Funding for SMEs

27 YCIS

10 Construction Planning Engineers

28 Origins of Poppy Day

12 Today’s Expense, Tomorrow’s Bottom Line

30 Lifestyle

14 Global Supply Chains

16 London Gateway 18 Basic Investment 20 Megacosts of Megaprojects

22 Offshore Companies Owning UK Properties

33 Legal Column

34 Upcoming and Past Events 36 Member Discounts 38 Member Get Member 2012 41 News and New Appointments 42 New Members 43 Shaken Not Stirred

Britain in Hong Kong Editor Sam Powney Design Winnie Li Lilian Yu Steve Mok Ken Ng Advertising Contact Charles Zimmerman Project Management Vincent Foe

Jointly Published by Speedflex Medianet Ltd and The British Chamber of Commerce in Hong Kong 1/F, Hua Qin International Building 340 Queen’s Road Central, Hong Kong Tel: 2542 2780 Fax: 2542 3733 Email: info@speedflex.com.hk Editorial: sam.powney@speedflex.com.hk Advertising: charles@speedflex.com.hk

British Chamber of Commerce Secretariat Executive Director CJA Hammerbeck CB, CBE General Manager Cynthia Wang Marketing and Communications Manager Emily Ferrary Special Events Manager Becky Roberts Events Executive Mandy Cheng Business Development Manager Phillippa Cook

Membership Executive Lucy Jenkins Accountant Michelle Cheung Executive Assistant Jessie Yip Secretary Yammie Yuen Ofﬁce Assistant Sam Chan

Room 1201, Emperor Group Centre, 288 Hennessy Road, Wanchai Tel: 2824 2211 Fax: 2824 1333 Website: www.britcham.com

© All published material is copyright protected. Permission in writing from the Publishers must be obtained for the reproduction of the contents, whole or in part. The opinions expressed in this publication are not necessarily the opinions of the Publishers. The Publishers assume no responsibility for investment or legal advice contained herein.

28071_BCO_Oct-1.indd 3

12年10月22日上午9:42

Chairman’s

Message I noted in an earlier letter that one of the aims of the Chamber this year would be to focus on a limited number of key themes, rather than dissipating our energies scattergun style. After just a few months, one of those themes is already beginning to emerge. And that big theme is the need for a big theme! Whether, as a Chamber, we are talking to Government, politicians, member companies, or overseas visitors, everyone is wrestling with the need to provide a vision, an objective, an aspiration, around which a shared destination can be built. At a company level, this enables a CEO to build a focussed team and to set clear benchmarks for success and reward. In politics, it can enable a candidate, and later a President or Prime Minister, to create a simple understanding or his or her aims around which a party can rally and which can generate engagement from voters. In an administration, whether in

Hong Kong or elsewhere, it can reassure society that there IS a plan, and focus citizens on the shared objectives, rather than scoring points off each other along the way. For the Chamber, the big theme must be that business is part of the solution, not the problem; and that any business operating in Hong Kong, whether local or international, is as much invested, both financially and metaphorically, in the success of Hong Kong as is every member of the population. In every conversation at Chamber events that I attend, I am struck by the focus that businesses have on the health of the society around them and how to support that, alongside their drive for the success of their own businesses. The media is tempted always to portray business otherwise; as parasitic on society rather than as a lynchpin of it. One of our tasks as a Chamber is to explain the positive nature of our role, as we engage with society and with public institutions. When the General Committee meets with Government officials and local politicians we ensure that we emphasise our desire to support Hong Kong’s aspirations to improve the quality of life, as well as of commerce, in our city. Although the challenges to progress are ever more obvious, whether these are financial, environmental, political or otherwise, shared objectives, clearly understood and supported, make progress a whole lot easier. Please help us build that feeling of shared objectives as we play our part in Hong Kong’s future.

Nick Sallnow-Smith

Chairs of Specialist Committees Business Angel Programme Neil Orvay Asia Spa & Wellness Limited

Environment Committee Anne Kerr Mott MacDonald Hong Kong Limited

Logistics Committee Mark Millar M Power Associates

Small & Medium Enterprises Committee Kate Kelly K2PR

Business Policy Unit Tim Peirson-Smith Executive Counsel

Financial Services Interest Group Richard Winter Quam Limited

Marketing & Communications Committee Adam O’Conor Ogilvy & Mather Group

Strategic Supply Chain Forum Dominic Jephcott Vendigital Limited

China Committee David Watt DTZ

HR Advisory Group Brian Renwick Boyden Search Global Executive

Real Estate Committee Jeremy Sheldon Jones Lang LaSalle

Women in Business Committee Sheila Dickinson The Fry Group

Construction Industry Group Derek Smyth Gammon Construction

ICT IT Committee Craig Armstrong Standard Chartered

Scottish Business Group John Bruce Hill & Associates

YNetwork Committee Alison Asome

Education Committee Stephen Eno Baker & McKenzie

28071_BCO_Oct-1.indd 4

12年10月22日上午9:42

Britain in Hong Kong

28071_BCO_Oct-1.indd 5

12年10月22日上午9:42

C ove r S t o r y

SME Funding – How Hard Can it Be? Richard Grainger, Managing Director, Global Merchant Funding Group

Introduction “A business owner walks into a bank and asks for a loan.” It’s perhaps not the most promising opening line for a joke, but for countless Small to Medium Sized Enterprises (SMEs) in Hong Kong, access to funding is no laughing matter. SMEs are often described as the “lifeblood” of our economy, and it’s easy to see why: Hong Kong’s 300,000 SMEs1 account for 98% of all businesses, 48% of the total workforce, and 60% of private sector revenue.2

to increase SME lending are simply a cloak to disguise attempts to bolster the beleaguered banks by giving them access to cheaper funding. Hong Kong banks hardly struggle for low-cost funding, as all of us earning close to 0% interest on our deposits are acutely aware. The banks say they are ready, willing and able to lend, but the demand from SMEs simply isn’t there. I am sure that most Hong Kong business owners and managers would disagree. Our economy has performed well in recent years, and there is an ongoing need for capital to help our businesses to ﬂourish. In short, the demand for funding is clearly real, but so is the lack of supply. Why is it so difficult for SMEs to borrow from banks?

Despite their vital role, SMEs struggle more than any type of borrower to obtain the funding they need to grow their businesses, and banks have become culturally attuned to not helping SMEs. Why exactly is this? How does Hong Kong compare to other markets? What other funding sources are available to SMEs? And how can the situation be improved? The struggle for funding is not new, nor is it exclusive to Hong Kong. In the UK, news that nearly half of all SME loan applications are rejected has created uproar in the media there. Cynics argue that UK government efforts

So why exactly won’t the banks lend to SMEs? There are several reasons: 1. Banks see SMEs as high risk due to their smaller size, fewer years in business, or imperfect credit history. Perhaps the business operates in a sector to which banks simply refuse to lend. Just ask any restaurant owner whether they have borrowed from a bank and you will likely be met with a stern face, the sucking of air through teeth, and a few choice expletives.

1. In Hong Kong, an SME is defined as any business with fewer than 50 employees, or a manufacturing business with fewer than 100 employees. 2. Source: Trade & Industry Department, Government of the HKSAR.

28071_BCO_Oct-1.indd 6

12年10月22日上午9:42

Britain in Hong Kong

2. SME lending is an expensive business: loan processing costs do not change much with the size of the loan. Banks therefore prefer to give a single large loan, rather than several smaller ones. 3. SMEs generally provide no collateral as security against loans. Banks must therefore allocate more capital against SME loans, compared to say home loans, which are secured by a mortgage charge on the underlying property. Since the global banking crisis, capital requirements have become even stricter, and capital even scarcer. In short, banks have little incentive to lend to SMEs. They are happy to sit back, take in all the funding they need through low-cost deposits, and focus their lending on secured mortgages or larger, less risky borrowers.

The SME Funding Paradox Hong Kong’s 300,000 SMEs account for: •

98% of all businesses

•

48% of total employment

•

60% of private sector revenue

•

0.025% of total lending

So where does this leave Hong Kong SMEs? To its credit, Hong Kong’s government has introduced measures to boost SME lending. For example, under the “SME Financing Guarantee Scheme”, the Hong Kong Mortgage Corporation guarantees up to 80% of SME loans made by participating banks. On the face of it, the scheme has been successful. According to HKMC, HK$14.6 billion of loans have so far been made under the 80% guarantee scheme. The ofﬁcial ﬁgures tell us that 88% of SME loan applications were approved under the scheme. However, they also state that only 3,107 businesses received a loan; 3,107 or just 1% of Hong Kong’s 300,000 SMEs. What the official numbers do not tell us is how many businesses were rejected before an actual application was made and recorded in the data. My guess is that the few SMEs that successfully received loans are heavily outnumbered by those that failed to reach the application stage.

Moreover, total lending by banks and other Authorised Institutions in 2011 was HK$57.7 trillion.3 Yes, that’s trillion with a “tr”. So the HK$14.6 billion lent to SMEs under the 80% guarantee scheme amounts to just 0.025% of total lending in Hong Kong. That’s one-fortieth of one percent of all lending feeding the lifeblood of our economy. However we cut the numbers, it is clear that government efforts to boost bank lending to SMEs are having, at best, only a marginal impact. What other sources of funding are available to SMEs? Sadly, not many. Personal loans, overdrafts and credit cards, as well as more traditional sources such as family or pawn shops, make a very limited contribution to SME funding. Business angels or angel investors provide another source of funding, and the British Chamber itself, with the support of Baker Tilly Hong Kong, runs an excellent programme that brings together entrepreneurs with angels looking to invest in early stage businesses. Certainly, there are plenty of investors out there, and there is no shortage of new and young businesses. The challenge is to bring more of them together, more often. For more information about the Baker Tilly Hong Kong Angel Programme please visit angel.britcham.com or contact Emily Ferrary at emily@britcham.com. For wholesalers, exporters or other trading companies, factoring remains a tried and tested funding tool. For a business that needs to wait for up to 90 days or more for an invoice to be paid, factoring is a simple way to unlock the value of that asset, generating funds through a discounted sale of the invoice.

Other sources of SME funding include: •

Angel investment

•

Factoring / invoice discounting

•

Merchant Cash Advance (MCA)

•

Microfinance loans

•

Peer-to-Peer (P2P) loans

3. Source: Hong Kong Monetary Authority Monthly Statistical Bulletin.

28071_BCO_Oct-1.indd 7

12年10月22日上午9:42

C ove r S t o r y

The banks all offer factoring products, but it is still very difficult for smaller companies to qualify. This seems surprising, given that the underlying invoice does provide some security for the bank. However, underwriting factoring transactions is a very labour-intensive process, and for invoices below HK$5 million, the banks are generally not interested. As with SME loans, they prefer to write larger tickets, fewer of them, and with bigger and more established companies. Other non-bank funding products include Merchant Cash Advance (MCA), available in Hong Kong since 2009 to businesses that accept credit card payments from their customers - typically retail shops, restaurants and bars, but available to any card-accepting merchant. Similar to factoring, MCA also helps a business to unlock the value within an asset, but instead of selling an invoice or a trade receivable, the merchant sells future credit card receivables at a discount. The MCA product recently received a strong legal validation from the Hong Kong courts as a much-needed and innovative funding tool for SMEs, and MCA looks set to become a mainstream funding product in Hong Kong, just as it has been for up to 20 years in countries like the UK, US, Canada, Australia and Singapore. We also see many other funding products around the world, including microfinance loans, Peer to Peer (P2P) loans, payday loans and advances, and many other alternative credit products. Many of these do not yet exist in Hong Kong, but there will always be financial innovation, and we can be confident that in a sophisticated market like Hong Kong, the legal and regulatory framework will always be receptive to new products.

Suggested government measures to help SMEs include: •

Tax breaks for angel investors

•

Government co-investment in SMEs with third parties

•

Direct funding for early stage businesses

•

Government loans for equipment and machinery

•

Insurance schemes for trade finance and working capital loans

•

More pressure on banks to increase SME lending

•

Encourage foreign direct investment in SMEs

What else can be done to help Hong Kong SMEs? If the government is serious about helping SMEs, then it needs to be more pro-active. Suggested measures include tax breaks for angels investing in young companies; government co-investment in SMEs with third party investors; direct funding to help early stage businesses; government-sponsored equipment and machinery loans; insurance schemes for trade finance and working capital loans; and of course, further pressure on the banks to increase SME lending. Doesn’t it seem strange that overseas investors can obtain permanent residency in Hong Kong by investing in property, but not by investing in SMEs? The government and InvestHK might want to look into this - it would certainly take some pressure off an already frothy property market. Importantly, these measures are much more widely used in other countries in Asia and around the world, than they are in Hong Kong. So until our government takes more concrete action to help SMEs, some 300,000 businesses will continue to struggle to obtain funding, and Hong Kong’s economic development will inevitably suffer.

Richard Grainger is a co-founder and Managing Director of Global Merchant Funding Group. Founded in Hong Kong in 2008, GMF offers a range of funding products and services to SMEs in Hong Kong and across Asia, and has provided funding to thousands of businesses when none was available from banks. Richard Grainger richard.grainger@gmf.com.hk Tel: +(852) 2592 6699

28071_BCO_Oct-1.indd 8

12年10月22日上午9:42

British Business Directory

2013

The Directory of Members of the British Chamber of Commerce in Hong Kong , Macau and the Pearl River Delta, China Publication in Focus The British Business Directory 2013 offers a comprehensive forum for exposure and opening communication channels. It further enables listed businesses and advertisers, entry into the prestigious British Chamber of Commerce group of corporate members and affiliated organizations. By listing and advertising, companies gain extra recognition and brand awareness, in addition to enjoying the seal of approval associated with the British Chamber of Commerce membership and affiliation. The contact information contained in the guide produces a tangible, reliable and accessible product that decision makers and industry heads can pick up and use at any time. Thanks to the quality, presentation and design the directory also conveys an image of 25 years of economic and cultural growth of British businesses in Hong Kong, Macau and the Pearl River Delta. The directory boasts a plethora of supporting information of tremendous value for both members and other businesses, and is held in high regard in corporate communities and international business circles. As the sole established, authoritative guide to British Businesses throughout Hong Kong, Macau and the Pearl River Delta, it is a superb means for getting in touch with members and highly conducive of generating business opportunities, enhancing its applicability even further.

Advertising Professional design and lay-out services complement the inherent value of advertising in the British Chamber Business Directory for 2013, with advertisers enjoying not only highly increased exposure but also presentation using the highest standards available in the publishing industry. There are numerous types of advertisements available, all at competitive rates. The directory also contains feature pages focusing on specific businesses for added value and highlighted positioning. Over the past several years, our advertisers in the directory have realized significant returns on their advertising investment, reporting noticeable feedback and positive business growth as a consequence. As an extra added value, we have not raised the rates of the ads over the past several years.

Advertising Rates (4C OR Black & White) Position Double page (front section) Run of page (front section) Run of Page (Full Directory Page) Color Corporate Logo Enhancement

Price (US$)

(HK$)

(RMB¥)

9,000 4,500 3,000 1,650

70,000 35,000 23,600 12,500

66,900 33,500 21,900 11,900

10,000 9,000 7,700 6,690 7,800 3,600 6,680 6,420 6,680 6,420

78,000 70,000 60,000 52,000 60,000 28,000 52,000 50,000 52,000 50,000

74,400 66,900 57,200 49,700 57,300 23,000 49,600 47,700 49,600 47,700

Premium Positions Bookmark Outside Back Cover Inside Front Cover Inside Back Cover Facing Content Page Facing Member Listing 1st section Guangdong page (outside) 1st section Guangdong page (inside) 2nd section Hong Kong page (outside) 2nd section Hong Kong page (inside)

* Color Corporate Logo Enhancements are offered for free with purchase of a full page ad

28071_BCO_Oct-1.indd 9

12年10月22日上午9:42

Business

Why Are Construction Planning Engineers so important and well paid? Richard Poulter, Director, Maxim Recruitment

the ubiquitous metal

h o a rd i n g s , t r a ff i c d i v e r s i o n s and “men at work” signs sprout unabated across Hong Kong, good construction Planning Engineers are increasingly in demand. What is construction planning & how can a career in planning engineering be embarked upon?

Construction Planning V Scheduling Now, there’s often confusion, particularly among nonplanners between the terms “planning” and “scheduling”. Planning is the process of identifying all activities necessary to complete the project whilst scheduling is the process of determining the sequential order of activities, assigning planned duration and determining the start and finish dates of each activity. Planning is a prerequisite to scheduling because there is no way to determine the sequence of activities until they are defined. They are performed interactively and it is generally accepted that those who cannot plan cannot create a good project schedule. The construction schedule will be a plan which organizes the tasks that must be accomplished in a logical sequence to successfully complete the objective in an efﬁcient manner with available resources and conform to the framework prescribed by a contract, speciﬁcations, drawings, and other documents.

28071_BCO_Oct-1.indd 10

Why is the Construction Planning Function so important and well paid? Construction planning plays a critical role within the Hong Kong built environment due to the current construction boom leading to a massive skills shortage of qualified and experienced people – including planners. Schedules developed with the most advanced and up to date scheduling software can be indispensable in the performance of the planning function and the successful outcome of the project. Such critical input inevitably carries premium salaries throughout the planning career ladder.

12年10月22日上午9:42

Britain in Hong Kong

Primavera Planning Software The Hong Kong construction industry uses “Primavera P6” extensively. This is described as complex project management software for construction companies which allows users to set goals, measure progress, control costs and evaluate performances by individual contractors and suppliers. Creating a good construction plan is an exceptionally challenging problem. Having experience is a good guide to avoiding major mistakes in the successful planning and scheduling of a construction project, however each project typically has its unique set of problems and opportunities to overcome or exploit.

The Three Stages of the Construction Plan Broadly speaking, there are 3 stages to the construction plan: 1. The Estimate Stage: This is where a cost and duration “estimate” is developed for the construction of a facility as part of the proposal from a contractor to an owner. Assumptions of resource commitment to build the facility are made by the planner. The planner must look for the best time-cost combination to allow the contractor to be successful in his commitment. Too high an estimate and the contractor will not be awarded the job, too low an estimate and the contractor will win the job and lose money in its execution. The planner must deal with the “uncertainty” here.

planning”. 4D construction planning is a process which enables clear visualisation of a construction programme as an animated sequence. 4D models are created by linking 3D CAD data with one or more programmes. This visualisation is then automatically updated any time the programme is updated. The beneﬁts of this include:

2. The Monitoring Stage: This is where management must keep a close eye on duration of construction activities as well as ongoing costs. Because the work is on schedule it doesn’t mean the cost is on estimate. Constant evaluation is necessary until the construction process is complete and evaluation can begin.

•

3. The Evaluation Stage: This is where the results are compared with the estimate and its validity is evaluated, and where the planner determines whether the “assumptions” made at estimate were correct. If new constraints emerge then corresponding adjustments should be introduced in future plans. The increasing availability of 3D models has facilitated their use in a process known as “4D

28071_BCO_Oct-1.indd 11

• • • •

Better communication with stakeholders Improved visibility and clarity of planning More dynamic and integrated programme meetings More efﬁcient and immediate review of different programme options Increased ﬂexibility in detail of output

How to Join the Planning Community Planners are perceived as a “close knit” community of specialist engineers with an often eclectic mix of qualiﬁcations. Getting into planning can be an excellent career move. Engineers that enjoy problem solving and have an aspiration to manage others should seriously consider it. Although foundation degrees in “Project Controls” are becoming available there are few formally recognized qualifications for the professional planner. This can be seen as an opportunity for an engineer or other construction professionals to seek out a greater focus on the duties and responsibilities of a planner as part of their existing role & progressively move across to becoming a dedicated planning engineer over time if things work out for all concerned.

12年10月22日上午9:43

Business

VAT

recovery may not be the most exciting thing

in the world but when executives realise how much money is needlessly spent filling the coffers of UK & EURO governments; VAT can suddenly seem like a topic worth discussing. In order to encourage trade, the European Union VAT Legislators granted business entities the right to reclaim the VAT incurred on serviced related expenditure across mainland Europe and the UK since the formation of the EU.

Turning today’s e tomorrow’s b

The VAT incurred on expenses such as accommodation, restaurants, transportation, car rental, trade shows, conferences, training courses, seminars and professional fees ranging from marketing and advertising to legal costs are all reclaimable. Business trips, incentives tours, trade show fairs, business jaunts or conferencing circuits can be large portions of your business expenditure and can be minimized by the claiming back of indirect taxes. Over the last year the UK has hosted the 2012 London Olympic and Paralympic Games, the Royal Ascot Horse Racing Carnival, the Diamond Jubilee of Queen Elizabeth, the Wimbledon Grand Slam tennis tournament as well as some of the world’s largest trade fairs and conferences attracting over US$53.9 billion of foreign investment for the last financial year. However, every year millions of pounds are lost in unclaimed foreign VAT with Hong Kong businesses amongst the thousands of companies’ worldwide not reclaiming funds that are essentially theirs. Imagine someone taking 20 per cent of the cash in your wallet every time you went into a hotel or restaurant; this is the closest example as to how your business is losing out by not implementing VAT recovery processes. The tax refund system is aimed at leveling the playing field for small and medium sized businesses to be able to compete with the larger organisations within the EU but for companies outside the EU it purely provides the ability to reclaim the tax – benefiting all companies. As VAT reclaim is seen as recouping costs and not a direct cost saving through cutting expenditure businesses can overlook the ways to minimize costs and return expenses. The main reason businesses currently aren’t implementing the tax reclaim solution is due to not knowing that the refund system exists. This is a tax that most governments haven’t had substantial claims to refund since its establishment and continually benefit from the millions of pounds of unclaimed tax revenue, hence, no reason to promote extensively.

28071_BCO_Oct-1.indd 12

12年10月22日上午9:43

Britain in Hong Kong

s expenses into s bottom line Alex Oxford Foreign Tax Consultant, VATit (Hong Kong) Limited

VAT recovery is not aimed at specific industries but at the greater business community to entice investment and drive the economy which we are currently also seeing increased VAT rates due to government tax rise similar to the UK’s hike in 2010 from 17.5% to 20% on all services. Currently, Hong Kong businesses with strong economic links to either businesses in the UK and mainland Europe or investment in those areas are not fully utilizing methods of cutting costs and returning expenses to their bottom line. Hong Kong remains the UK’s 3rd largest Asian trading partner and 13 th largest export market worldwide stemming from the Colonial links and continued strengthening economic ties. These links also encourage an increase in the amount of foreign investment and travel between the two nations as two of the most influential economic hubs in the world. As these numbers continue to rise, the amount of VAT incurred across the UK and mainland Europe by Hong Kong businesses that isn’t being reclaimed is growing and most businesses don’t realize they have the legal right to these funds. British and European companies located in Hong Kong are some of the main beneficiaries of VAT recovery as the travel back to the ‘homeland’ can add up significantly. Questions that need to be asked of your business are A) Does your business travel to Europe and the UK, Taiwan, Japan, South Korea or Australia? B) Do you have expenditure on previously mentioned service related products including accommodation and entertainment? If the answer is YES to any of these questions, you can begin to look at how VAT reclaim can benefit your business. Other VAT refund schemes in place for Hong Kong based businesses with a global reach are Tour Operator VAT refunds, Import VAT reclaim, Telecoms & Aviation refund, Mineral Oil Tax refund, US Mobile Roaming Charges reclaim plus the ability to reclaim GST from Australia, VAT from Taiwan and South Korea and the JCT from Japan. The reality is that VAT recovery is a cost saving measure that has not yet been implemented by all Hong Kong businesses, businesses that are becoming increasingly reliant on the partnership between these two nations. Essentially, the taxes incurred are the businesses to be recovered; it is just a matter of putting the processes in place to ensure companies are reclaiming the VAT in full.

28071_BCO_Oct-1.indd 13

12年10月22日上午9:43

Business

Empowering Global Supply Chain Ecosystems There are increasingly blurred boundaries within-and-across the complex international organisations that companies deploy in order to efficiently plan, source, make and deliver their products – such that we are now firmly in the domain of global Supply Chain Ecosystems. On the basis that these modern-day supply chain ecosystems inevitably involve several organisations working together for a common purpose, then by nature of comprising multiple participants, modern-day supply chains must inherently involve outsourcing in one form or another.

Supply Chain Ecosystems As a result of recent and rapid developments in worldwide commerce, we have seen supply chains evolve into complex international networks, which can no longer be adequately described using the linear concept of a ‘chain’. The depth and breadth of complexity, connectivity and inter-dependencies i n v o l v e d i n t o d a y ’s i n t e r n a t i o n a l commerce has resulted in the emergence of ‘Supply Chain Ecosystems’ – globally

28071_BCO_Oct-1.indd 14

Mark Millar

inter-weaved, multi-layered networks of partners, suppliers, regulators, service providers and customers.

in-sourced or outsourced – to the distributor and retailer, and ultimately to the consumer.

Within these ecosystems, each conﬁguration is unique to the particular enterprise that owns that supply chain. The ecosystem’s chosen participants are all coupled together for the common purpose of providing an end-to-end channel of distribution – all the way from the suppliers of materials and components, extending through manufacturing processes – whether

Each commercial enterprise forms their own distinctive supply chain ecosystem, adopting a different composition of similar participants, or in several cases, particularly within industry sectors, many of the same participants. And so it goes on, such that numerous multi-layered cross-enterprise connections generate a complex web of

12年10月22日上午9:43

Britain in Hong Kong

interdependencies, frequently spanning the globe, in order to optimise the three critical attributes that drive differentiation within the supply chain ecosystem – speed, agility and resilience.

work with multiple partners in order to successfully operate and execute their supply chain ecosystems, thus leading to an increasing trend to supply chain outsourcing.

As modern supply chains increasingly resemble complex ecosystems rather than linear chains, the suppliers, manufacturers and service providers that work together to service one client’s supply chain, may in fact be ﬁercely competing against each other to win business to provide services for a different client’s supply chain.

Supply Chain Outsourcing

Indeed, whilst each company has their own supply chain ecosystem over which they have control, that same company will most likely be a participant in several other supply chain ecosystems, for example for its customers and suppliers.

Defined as ‘the act of one company contracting with another company to provide services that might otherwise be performed by in-house employees’, outsourcing is generally undertaken in order to benefit from using an external provider – typically through gaining economic advantages and leveraging specialist expertise. In our globalised world, outsourcing is often confused with offshoring. However outsourcing is still outsourcing irrespective of where the outsourced

competencies whilst seeking external partners to undertake activities that are non-core and that can be undertaken b y t h i rd p a r t y s e r v i c e p ro v i d e r s . Outsourcing partners typically have specialist expertise and the economies of scale that enable them to deliver the required results better and cheaper than could be achieved by the client using their own in-house resources. These trends have led to industry subsectors of firms providing outsourcing services, including call centres, ﬁnance, payroll, telecommunications, computing and of course transportation and logistics. In addition to leveraging the scale economies that result from servicing multiple clients, these focused service providers also nurture and develop specialist subject matter expertise, domain knowledge, streamlined processes and technology platforms that are above and beyond levels that any single organisation could develop in-house. Therein the value proposition for outsourcing – contracting out your business processes to a specialist service provider that can perform those services more efﬁciently and more cost effectively than you could do yourself, enabling your organisation to focus its precious resources on your core competencies. We can expect further collaborative outsourcing developments that will empower efficient and effective performance in global supply chain ecosystems.

For global businesses, the supply chain is increasingly becoming a key source of competitive advantage and differentiation. Brands need supply chains that enable and empower them to get their product to market more efficiently and faster than the competition. Businesses are now competing on the basis of their supply chain management capabilities almost as much as their product or their brand. In this context, organisations must develop the capabilities to effectively

28071_BCO_Oct-1.indd 15

services are actually performed – whether onshore or offshore. Offshoring refers to moving business activities out of the existing host organisation to another location in a different country – in many cases to an outsourced partner (Outsourced Offshore), but in some cases to a subsidiary division of the same company (Offshore). Adopting the Tom Peters mantra “Do what you do best and outsource the rest”, organisations have taken the approach of focusing on their core

Industr y thought leader Mark Millar has been engaged by clients as Speaker, MC, Moderator or Conference Chairman at more than 240 functions in 20 countries and is recognized by the Global Institute of Logistics as “One of the most Progressive People in World Logistics”; Mark serves as Chairman of the Logistics Committee at the British Chamber of Commerce in Hong Kong. mark@markmillar.com

12年10月22日上午9:43

Business

London Gateway is envisioned to turn London’s newest port into a 21st century logistics facility, a major hub and port of entry for goods coming into the UK, and for goods destined for onward transition to Ireland and Continental Europe. Opening in Q4 2013, this brand new, world class 3.5 million TEU deep-sea container port is currently under

London Gateway – changing the UK Logistics Landscape

construction on a 1,500 acre disused brown field site, located just 25 miles from central London on the former Shell Haven oil reﬁnery at Stanford-le-Hope. With a 2.7 km frontage on the north bank of the River Thames, a total of six berths with 24 quay cranes will serve a 175 hectare terminal area. London Gateway will combine a world-class deep-sea container port together with Europe’s largest dedicated logistics park to create a state-of-the-art Port and Logistics Hub that is located within easy reach of all three London international airports at Heathrow, Gatwick and Stansted. Hinterland connectivity is enabled through comprehensive multi-modal transportation capabilities that seamlessly connect the deep-sea container port facility with short-sea feeder services, on-dock rail terminal with at least four rail freight services per day and a newly constructed dual-carriageway providing direct connections into the UK motorway network – all providing access to markets in London and the south east, and further afield throughout the UK, Ireland and Continental Europe. In order to maximise efficiencies in, and minimise the costs of, the end-to-end supply chain from “origin to destination”, London Gateway will deploy the ‘smart solution’ platform called PortCentrics. This is a unique logistics platform in the UK that enables and empowers more effective supply-chain management and increases efﬁciencies by eliminating the unnecessary handling and movement of goods, reducing the primary and secondary trunk movements, minimising inventories in transit, thus improving time to market, lowering distribution costs, saving road miles and improving carbon emissions. W ithin the container port, London Gateway will adopt the latest technology solutions featuring highly automated systems and intelligent tracking, which will provide customers with fast identification and retrieval of containers, as well as optimising stack management to hold and control containers to more efficiently meet customer demand.

28071_BCO_Oct-1.indd 16

12年10月22日上午9:43

Britain in Hong Kong

With Europe’s largest logistics park situated next to the port, many of the goods offloaded at London Gateway will move immediately into facilities within the logistics park, instead of being transported to another part of the UK for storage, reworking and distribution, thus saving many road miles whilst reducing costs and emissions. DP World has estimated that the improved efficiencies in the logistics supply chain will save thousands of truck movements per day off the national highways. The project should result in environmental beneﬁts of reduced lorry movements of over 60 million miles per year – equivalent to 148,000 tonnes of CO2 savings per annum.

Logistics Park The vast majority of deep-sea imports currently enter the UK through container ports in the South East, yet only 10% of warehousing and distribution facilities are located in the South East. The London Gateway project has planning consent for 940,000 m2 of logistics and distribution facilities within the Logistics Park – adjacent to the new deep-water container port. Individual units will be offered of up to, and in excess of, one million square feet, designed and built to speciﬁcation, providing worldclass facilities for the distribution, manufacturing and high-tech sectors.

DP World London Gateway has appointed Jones Lang LaSalle as sole property agents for what is the largest logistics park development in Europe. Jones Lang LaSalle will provide specialist advice in the property sector to support the delivery of the London Gateway logistics park. Tim Johnson, Director in the UK National Industrial & Logistics Team at Jones Lang LaSalle said: “London Gateway has the potential to transform logistics operations in the UK by offering a port-centric logistics solution at the heart of the UK’s largest consumer market.” “The logistics park is a unique proposition offering the potential to provide some of the largest and tallest buildings in Europe. There are 15 million consumers located within 80km of the site and this underpins our view that London Gateway is simply the best location for UK supply chain solutions.” London Gateway will therefore offer a faster, more reliable and greener way to transport goods to their destination, compared with existing supply chain models. Analysts have estimated that over 60 million road freight miles every year will be saved, because many goods will no longer need to be transported from deep-sea ports to inland distribution centres. Instead, goods will ﬂow quickly and easily from London Gateway port into the adjacent logistics park for subsequent onward distribution directly to shops and homes.

With its unique location on the Thames, London Gateway therefore offers signiﬁcant supply chain savings for global businesses through reduced transport costs created by having warehousing at the port of entry and closer to the key UK consumer markets.

The London Gateway executive team will be presenting the latest updates at various briefings during their forthcoming Asia Road Show - for further details contact Mark Millar in Hong Kong, mark@markmillar.com

London Gateway Construction July 2012

London Gateway Proposed Layout

28071_BCO_Oct-1.indd 17

12年10月22日上午9:43

Business

Sit on Your CASH CASH, Wait for the CRASH Do you have any idea what to do with your money? Chris Riley, Founder and Managing Director, Sercura

Sir Arthur Conan Doyle and I went to

the same school. Not at the same time, but we both sat in the same classroom and on the same bench in church. My school was a jolly fine school. They taught us the great art of Rugby (our history teacher coached the England team to victory in 2003), they taught us how to reason in debate and they taught us how to handle physical pain like a gentleman. We also learnt about starvation and how to survive hypothermia in the unheated classrooms and dormitories. Overall it was a balanced education, that seemed to produce results. One of my contemporaries runs the BBC, another is a Member of Parliament, a third recently received a Tony Award for a play he directed and someone a few years younger, here in Hong Kong, is the Chief Executive’s right hand man. However what our school did not teach us, was the ﬁne art of making and handling money. There were no classes on how to get more of what you have or how to avoid losing what you have earned. This was an elementary failing in our education, Dr. Watson! Here are a few ﬁnancial maxims that I try to instill in my children over the dinner table.

Rule #1 Buy Low and Sell High: My Chinese colleagues always seem to be selling when the market is dropping. They look at me as if I’m mad when I tell them to buy more as the prices tumble. If you have a good stock where the company’s fundamentals are solid then you should love a falling market. Take HSBC: this morning they are at 60. A few years ago they were close to a 100. The bank is well-run and is very conservative. If I bought 1 million HKD worth of shares now and held on

28071_BCO_Oct-1.indd 18

to them, it is likely they will be up to a 100 again within 2-3 years. Once they are at a 100, I may sell, having made about 600,000 HKD profit. But you have to be patient. Capitalism works on the principle of boom and bust. The markets fluctuate. They have to go up and down in cycles, otherwise smart investors would not be able to make big money. Since I’ve arrived in Hong Kong I have been through five Global or Asian Economic Crises (1987, 1997, 2001, 2008, 2012) and we’ll have a few more to be sure. The same applies for property. We are now at an unprecedented high for local properties. They may correct by 10-15% when CY Leung implements some cooling measures or they may crash 50% if we have a ‘Black Swan’ effect – an unpredictable event that spooks the markets such as 9/11 or SARS. The day after 9/11 a friend acquired a very large stock position in Cathay Pacific which paid off nicely a year later.

Rule #2 Pay Yourself First: The best savings advice nobody gave me until I figured it out eventually, was to take half of my salary on the first day of the month and buy shares or mutual funds with it. If you don’t see the money in your account, you will not be tempted to spend it on fancy dinners, ﬁne wine, cool cars or swanky electronics. Don’t wait until the end of the month. Set up a direct debit on the ﬁrst day of the month and adjust your lifestyle to live within your means. Rule #3

Understand the Magic of Compound interest: Those of us who are not maths prodigies cannot comprehend how powerful compound interest can be. If you put the same amount of money into a monthly investment account you will receive interest on

12年10月22日上午9:43

Britain in Hong Kong

the interest. Regular monthly savings are the secret to getting rich by the time you are ready to retire. Assume you save 10,000 HKD per month/ 120,000 HKD per year at 10% interest that would be 132,000 HKD by the end of the year. The following year you add 120,000 HKD to the 130,200 HKD plus 10% interest on the total. Now take a spreadsheet and extrapolate that over 20 years. The end result is impressive. It really starts snowballing after a few years. If you think 10% interest is high, here is a fact: Over the past 90 years, the US stock market has generated returns exceeding 9 percent annually. London and Hong Kong have performed similarly over the long-run. Buy into the Hong Kong Tracker Fund 2800 which follows the Hang Seng Index and you will match the market’s returns which over the last twenty years has been consistently up, despite the occasional big drop.

Rule #4

Understand the Magic of Dollar Cost Averaging: Once you have seen how compound interest works you can also relate to this rule. Let’s assume you buy China, Light & Power shares (in the last two years they have gone from about 50 up to 75 and are around 60 currently). Every month you buy 5000 HKD worth of shares. When their value is down you get more for your money, when their value is up you get less shares. But over a period of several years you will get more for your money than by trying to be clever and watching the market daily. Set up a standing instruction and check your portfolio once a year.

Rule #5 Only invest in what you understand: This is the classic Warren Buffett line and he’s been successful with it. I can relate to property because it is tangible and moves up and down slowly. I have an idea how banks, airlines and power companies work because I am a customer. But I have no idea how complex structured investment products work. Nor does the financial adviser trying to sell them to me, so best stay away from these unless you’ve missed the boat to Macau and need a gambling fix. Rule #6 Buy shares that give you a dividend payment: HSBC, Hang Seng Bank, China Light & Power, Sun Hung Kai and Cathay Pacific are among the top dividend payers in town. Remember that when you buy shares you are a part-owner of the business and are entitled to a share of the company’s profit. 5% annual dividend is about the same return as you would expect on a property rented out in Hong Kong. Rule #7

Don’t keep all your eggs in one basket: Diversify your investments in order to balance potential risk. Keep some money in shares, some in mutual funds, some in bond funds. One rule of thumb is to keep a percentage of your portfolio equal to your age in bond funds. Currently shares are doing poorly but property in Hong Kong is doing great. Don’t buy two flats in the same building. Spread them out in case there is a fire or a rash of bird flu in your building, which will reduce your returns in the short term.

28071_BCO_Oct-1.indd 19

Rule #8 Don’t be scared by the bogeyman of Inflation: Financial advisers love to tell you that if you don’t invest your money it will simply evaporate because of inflation. There is an element of truth in this but only over the long-term. If you had 1 million HKD in your bank account and inflation is 3% a year, notionally you will have lost 30,000 HKD buying power over a year. Let us put this in perspective: If you drink two grand Lattés at Starbucks per day it will cost you about 30,000 HKD per year. Stop going to Starbucks and you’ve made up for the inflation. 1 million HKD in your bank account is still 1 million HKD. But if you hand it over to an unscrupulous financial adviser there might only be half a million HKD left in your bank account. Rule #9 Hold some properties that are not owned by the bank: I am always amused when people tell me they own several properties but on questioning it turns out that in fact they have a 70% mortgage on every property. The fact is they do not own the properties. The bank does and can always take them back. If you have the luxury of cash it is best to have at least two properties that you own outright: one for you to live in, one to rent out and provide a rental income that is generous enough to cover your monthly expenses. This is a disaster hedge in case you lose your job or want to retire early. A beachfront property in Phuket and a Mid-Levels flat rented out would do nicely. For any further properties, leverage them and wait for the capital appreciation, keeping the rental return to pay the mortgage since currently we are borrowing money so cheaply. Rule #10

Nobody cares more about your money than you do: Although I am a fan of HSBC shares I am not impressed by their investment expertise. My personal relationship manager looks as if she is about fourteen and can barely speak English. If that is the best they can do I can't take them too seriously and so I keep my savings at a small private bank in Zurich. My relationship manager is a middle-aged Swiss fellow with a certain gravitas who is able to explain in words of two syllables what the markets are doing, so that even I can comprehend. Nevertheless I don't let him manage my money. Unless you have huge sums and don't mind losing a bit here or there, it is best you manage your own money. Take advice from bankers by all means but make your own informed decisions. I called around all my banker friends In the last few weeks and asked them what they were doing with their personal investments. Most of them are sitting on their cash and waiting for the markets to crash, so they can jump in and get bargains at low prices.

Christopher Riley is the owner of Sercura, a global quality and compliance company that provides product inspection and factory audit services to retailers and their suppliers manufacturing around the Asian region. www.sercura.com

12年10月22日上午9:43

Business

The megacost of megaprojects

David Dodwell, Chief Executive, Strategic Access Limited

It was the Olympics that got me thinking about the astonishing escalation in the cost of big projects. The London Olympics 104 years ago, in 1908, cost a grand sum of £20,000. By the next London Olympics, in the austere postwar environment of 1948, they cost £750,000. The Danny Boyle Olympics in London this summer cost £11 billion. However you play with inflation over 104 years, that is an astonishing escalation in the price tag. Needless to say, this phenomenon is far from a “UK thing”. As a well known English language columnist in Hong Kong whined this week, the third runway at Chek Lap Kok airport is budgeted at HK$86 billion, and is expected to cost HK$136 billion in the dollars of 2020 when planes are due to begin landing on it. This would be very close to the total cost of all of the projects linked with building the original Chek Lap Kok airport – which when it opened in 1998 included not just the two-runway airport and associated airport buildings but the 35 km Airport Express MTR line, and the HK$6.5 billion Western Cross Harbour Tunnel. When I began to think further, the problem proliferated. London’s Victoria MTR line, built in the 1960s, cost about Pounds 4.38m per km. Ten years later, the Jubilee line in London cost Pounds 22.5m per km —

28071_BCO_Oct-1.indd 20

and the Jubilee extension in the 1990s cost £225m per km. Up in Scotland, the famous Forth Bridge linking Edinburgh to Fife cost £3.2m in 1890, but a second road crossing in the 1960s cost £19.5m — and a third, now being budgeted, is expected to cost £1.6 billion. Look at Hong Kong’s MTR and you see similar hyperinﬂation: the Kwun Tong line completed in 1979 cost about HK$384 million per km, but the purple Tseung Kwan O line, finished in 2009, cost HK$2.5 billion per km, and the Shatin Central line, due to begin operation in 2018 was costed in 2011 at HK$3.8 bn per km. The cross harbor tunnels provide further fascinating examples: the original Hung Hom tunnel, opened in 1972, cost about HK$172m per km, but the Eastern Crossing, opened in 1989, cost HK$1.5 billion per km and the Western Crossing which opened in 1997 cost HK$3.2 billion per km — and would undoubtedly have been more expensive had it not been built as part of the bundle of Chek Lap Kok airport projects. Aw a y f ro m t r a n s p o r t , t h e H o n g K o n g O l y m p i c Equestrian Centre, completed in 2008, cost HK$1.2

12年10月22日上午9:43

Britain in Hong Kong

Hong Kong or UK counterparts. Putting carefully on one side the rising concerns over collapsed bridges

projects

or “tofu buildings” on the Mainland, and the shadow of corruption (the construction industry is after all worldwide recognized as the sector most heavily burdened by corruption): Guangzhou’s Baiyun airport, opened in 2004, cost about HK$24 billion — one third the cost of the Hong Kong International Airport. The official audit cost for the 2008 Beijing Olympics came in at HK$24 billion: the London Olympics cost five times as much. Beijing’s subway line No 10, completed for the Olympics, cost about HK$800m per km — a quarter of the cost of Hong Kong’s Tseung Kwan O line. Even if you don’t put much faith in China’s numbers, it is clear that regulatory costs and delays contribute strongly to the hyperinflation of megaprojects. This has created a feast of opportunities for consultants and financiers – largely at the cost of taxpayers. But as megaprojects have become more mega, so the number of global contractors deemed capable of managing them has dwindled. As competition has dwindled, perhaps unsurprisingly, prices have risen. A happy elite billion, while the Kai Tak Sports Complex that is being discussed for the 2018 Asian Games is currently pricetagged at HK$19 billion.

band of contractors have clearly done very well out of this process. Is there anything that can be done? Clearly, the trend

Pretty much wherever you turn over the stones on the costs of megaprojects, the same phenomenon appears. So why is it that costs have spiraled so extravagantly? Obviously, much has to do with the political empowerment of our communities. Apparently, when the first Forth Bridge was built, hundreds died in the construction, but as safety concerns have tightened, so costs have risen. Many of these costs are linked to acquisition of land, and this seems to have become progressively more difﬁcult over the decades. The process of acquiring land not only costs money in a direct sense, but the time required to negotiate land purchases has lengthened projects and extended costs. Regulatory compliance costs have also spiraled: anyone who spectated on the Environmental Impact Assessment for the LNG Terminal proposed for the Sokos Islands, for example, could not but be in awe of the rooms full of documents submitted by China Light and Power and their teams of legal drafters.

is toward more regulatory scrutiny rather than less. But it would surely help if the (largely public sector) clients commissioning megaprojects were more expert than they currently appear to be in setting specifications and scrutinizing tenders. Experts say that it helps if clients resist the temptation to change specifications mid contract — and if they carefully distinguish wants from needs, and do not insist on the very latest technologies or highly idiosyncratic specifications unless they clearly fall into the “need” category. Look, for example, at the UK’s aircraft carrier Ark Royal. This ship was originally built in the 1930s for £3m. It was sunk in 1941, and the replacement launched in 1981 cost £250m. I read that a new Ark Royal in the UK would today be budgeted at £3.5 billion — in large part because of the military establishment’s efforts to ensure it carries the very latest defence technologies. We can only be grateful in Hong Kong for the small mercy that we have no army, navy or air force to equip, and can leave this hyperinflationary headache to

It is perhaps not surprising therefore that megaprojects on the Mainland remain significantly cheaper than

28071_BCO_Oct-1.indd 21

Beijing. But then, even with Ten megaprojects on our hands, we have budgetary headaches enough.

12年10月22日上午9:43

Business

Offshore Companies Owning Uk Residential Property Need To Take Urgent Action

Earlier this year the UK Government announced farreaching proposals to change the way that non UK companies which owned UK residential property would be taxed. Previously these companies, like non UK resident individuals, had not been liable to pay Capital Gains Tax (CGT). Under the new proposals this would change and those companies would now be subject to CGT, broadly calculated on the difference between the acquisition value and the disposal value. There are many companies who acquired UK property many years ago so their base value for CGT purposes will be very low. On resale of the property those companies are going to face a very heavy tax bill. Additionally, companies which own a property worth more than £2 million will now be subject to an annual tax which is being referred to as “Mansion Tax”. The amount will vary according to value but will be a minimum of £15,000 and a maximum of £140,000. These charges are going to greatly impact on the investment value of such properties. Both charges can be avoided by transferring the property from the company to individual owners but, particularly for older buyers or those in poor health, that will not be attractive as it will mean that the property is subject to UK Inheritance Tax (IHT) at 40% of the total value if anything happens to the owner. Obviously it won’t concern the owner themselves as the charge will only be triggered when they are past caring but many will be concerned to try and preserve wealth for the benefit of their family and heirs. For that reason, individual ownership will only seem interesting if the ultimate owners are young and/or intending to sell the property sooner rather than later. Those owners are likely to be in the minority. Insurance is likely to be an alternative way of covering the IHT but is likely to be expensive especially for older owners. HMRC did announce some exemptions from the new charges. More detail of those exemptions have now emerged so the planning opportunities have now become clearer.

Howard Bilton, Chairman, The Sovereign Group

28071_BCO_Oct-1.indd 22

The first exemption announced was that professional trustees holding residential property would not be subject to the new 15% rate of Stamp Duty Land Tax (SDLT) that was introduced in April this year. They will also be exempt from the Mansion Tax but there is no general exemption from the new CGT charge which previously did not apply to non UK residents. Exemption from CGT can be obtained if the trustees and a beneﬁciary occupying the property both claimed Principal Private Residency relief.

12年10月22日上午9:44

Britain in Hong Kong

from the new 15% SDLT charge and from the Mansion Tax. A QNUPS is not subject to the ten year anniversary charge. The terms and conditions necessary for the trust to qualify as a QNUPS do mean that access to the capital is somewhat restricted. The property can be sold and the money can be re-invested in another property or anything else allowed for under the pension rules but the pension holder would only be able to take the money out of the QNUPS according to the rules of the scheme. Those rules normally allow the pensioner to take a lump sum out on retirement and then the rest in drawdown. That restriction may not suit everybody so the trust structure will be preferable for non doms. This would normally apply where the property is occupied by any beneﬁciary or any number of different beneﬁciaries of the trust. CGT might also be avoided by “selling” the property by changing the beneficiaries of the trust or if the trustee was a private trust company by changing the ownership of the trustee or by both. In fact there appear to be so many potential ways to avoid CGT and so many difficulties in collection that the latest rumour is that HMRC may decide not to introduce this new extension. At this stage it would be unwise to assume that CGT will not apply. Discretionary trusts are subject to a ten yearly charge which could be as much as 6% of the capital value of the property. This is an attempt by HMRC to claw back some of the 40% IHT which is lost if UK property is held within trust. The way the ten year anniversary charge is calculated is complicated so 6% is certainly the maximum but it will generally work out to be between 3% and 6% depending on value and other circumstances. Luckily this charge is only payable on the equity in the property. If loans are used to purchase the property, the tax is payable only on the difference between the capital value and the loan amounts. For this reason it seems as though a two trust structure may give the best of all worlds. One trust, set up by a non-UK domiciled person, can receive the capital amount needed to purchase the property. That amount is then loaned to another trust which actually buys the property. The loan amount is then deducted from the value of the property for the purposes of calculating the 10 year tax. The loan could be sufficiently large to reduce the tax to a nominal or zero amount.

Happily, a gift by a non UK company to either a trust or a QNUPS can be made free of SDLT as long as there is no mortgage in place on the property. If there is a mortgage then SDLT is payable on the mortgage amount so the transfer could prove expensive to do now but will result in large savings in the future. Trusts owning residential property are subject to higher rates of tax on rental income. They pay up to 50%. To reduce the tax on income the income rights can be vested in an offshore company wholly owned by the trust when the property is acquired. The tax rate is then reduced to 20%. Anybody who owns UK property worth £2 million or which may become worth £2 million in the future should take action now. There is a window of opportunity to rebase the capital cost as long as this is done before April next year. Howard Bilton is a UK and Gibraltar barrister, Professor of Law at Thomas Jefferson School of Law, San Diego and Chairman of The Sovereign Group.

The above does not work for those who are still domiciled in the UK because the transfer into trust would trigger the lifetime IHT charge of 20%. For UK domiciled persons it is better to use a Qualifying Non UK Registered Pension Scheme (QNUPS). A QNUPS is a pension trust that enjoys special UK IHT treatment. The pension trustees (typically corporate trustees) are exempt

28071_BCO_Oct-1.indd 23

12年10月22日上午9:44

Business

TOP TIPS for EFFECTIVE

BUSINESS NETWORKING

Fraser Murray, Managing Director, Rock the Boat Consulting

”NETWORKING IS LIKE PLANTING BAMBOO…..It takes a long time to grow but when it does it’s very strong!” – Fraser Murray

Delivering our recent oversubscribed Networking seminar for a cross section of the HK business community, Fraser Murray asked the audience at the start of the event why they felt the need to be even better at networking, particularly as Hong Kong is already known for being a hotbed of networking. The answer……whilst many people are great at networking socially.... turning good social networks into business growth is for many of the audience, much more challenging! In this article Fraser, Talent expert and MD of Rock The Boat, shares his top tips for effective business networking.

28071_BCO_Oct-1.indd 24

Many people find it challenging meeting new people at a business event, conference or training event. Whether you’re job hunting or looking to develop new business contacts, the initial approach can be quite a daunting experience, but it doesn’t need to be! With a few simple tips and some preparation, you can make networking enjoyable and with the right connections, there are a few things you can do to increase your chances of doing business with your new network contact in the future. Just one or two changes in your approach could land you that new business deal, or new job!

12年10月22日上午9:44

Britain in Hong Kong

Why might you want to network more effectively?

•

In the current economic climate, selling your product or service is a tough challenge; therefore networking has become an even more valuable skill to possess than ever before. Does that mean that you need to become an extrovert social butterﬂy, ﬂuttering around the room, meeting as many people as possible? No, not at all! Not all extroverts are successful at translating network contacts into new business. Both extroverts and introverts can learn to be even more effective at networking. Networking is one of the most successful and cost effective ways to generate new business leads. Becoming brilliant at networking isn’t just useful, for many businesses it’s critical and can be the difference between success and failure. As well as new business and contacts, you could be picking up useful information about what’s going on in your sector.

1. Prepare in advance

•

Get yourself in the right frame of mind for any networking opportunity Prepare well. Nobody is that interested in what you wear as long as you are not hugely under or over-dressed. Relax and remember to try and find out more about the other person and you’ll be fine. Hold your head up, tummy in, chest out and project your voice slowly and with confidence. If you’re nervous, think back to a time, anytime, when you were at your most confident. Remember how it felt, feel the confidence, imagine the scene and now take that confidence with you into the next situation.

28071_BCO_Oct-1.indd 25

Be clear on your personal story and 30 second introduction Try to keep it short and punchy as there’s a limit to how much people will remember on first meeting. You want to give them enough information to get a hook that they may wish to explore further but not too much to send them to sleep!

What’s yours? You need to get a person’s interest right away or you’ve lost your chance. The greeting should be no more than thirty seconds long, informative and about you. You need to sell yourself before you can sell a product or service.

Trust is one of the most critical requirements in selling effectively and without it, few people will buy from you and certainly even fewer will recommend you to others! People buy from people they know, they rate highly and they like. I ran a session recently for a group of MBA students who tried to convince me that people didn’t have to “like you” to buy from you. On reﬂection, they are possibly right, but in my experience, “being liked as well as highly rated” certainly helps!

Set your objectives Find out who will be attending the event. Decide who you would like to target and what you would like to take away from the event, how many quality contacts and in relation to what? Having a specific goal will ensure that you remain focused and will have success.

Here is mine: “I lead a team of experts at Rock the Boat, a Talent Development organisation providing training in Leadership Skills, 1:1 Performance and Career Coaching, and who specialise in Women’s Development”.

•

Make a professional first impression with your appearance and your attitude The Blink Theory says you make your mind up in the first 17 seconds. People decide many things about you within 17 seconds of meeting you. Decide what impression you want to make and then how to make it through the colours and styles you wear, your posture, handshakes, eye contact and facial expressions. Dress to impress. Whether we like it or not, attractive people receive attention. Anyone can be attractive with the right outfit. Dress for a networking meeting as you would if you were going to visit your most important client. You need to approach the event with a positive attitude and positive energy, as people will be more likely to enjoy your company and to recommend you to others if you are up-beat and have a can- do attitude. Try to smile regularly as and when appropriate.

2. At the networking event •

Working the room Working a room can sometimes seem very daunting for some people but it’s easier than you think if you use some basic techniques. Shaking hands and exchanging business cards are pretty common at networking events, so make sure that if you have a buffet at the event, that you have a drink or food but not both! Always keep one hand free!

•

Interrupting/joining a group of people Focus on a group of people and stride confidently up to them, so they can sense you’re coming. Don’t interrupt immediately but be prepared to be invited

12年10月22日上午9:44

Business

into the group. Standing close to two people usually results in them opening up to let you join. As you approach, focus your eye-contact on one friendly face, usually on the far side. Don’t be scared to walk round the group to enter where people are smaller. More people will see you this way and they are more likely to welcome you in. Show interest in the topic they are discussing.

Spend time with those you DON’T know Diversity often sparks new ideas, so try to ﬁnd new types of people to help generate more creativity for you. Although it is ok to spend some time with key contacts before working the room, remember that people with whom you are already friendly know what you offer. Networking meetings should enable you to expand your network.

Be prepared when invited to introduce yourself brieﬂy and be prepared to shake hands with everyone. Say your name slowly (don’t rush). It is OK to take a peek at name badges! Make sure you wear yours high up rather than on your belt or near your cleavage, unless that’s where you want people to look!

Open questions to establish rapport – men…….. this must be more than sport; business and current events. Find common ground quickly. Ask simple questions to get things started. Appropriate humour often works. Try to create a conversation, rather than an interrogation. Avoid any temptation for a one-way gush of “this is me, what I do, and I only want to know if we can do business otherwise I am out of here”….

Ask questions. Where do you work? What do you do? What do you do in your spare time? Are you doing anything interesting this weekend? Do you have any kids? How old are they? •

•

28071_BCO_Oct-1.indd 26

Ask questions The best way of ﬁnding out about the other person is to ask them questions. Hopefully they will then ask you some questions too. Focus on your value proposition or ideas that can help them grow their business, improve their performance or reduce their costs. A strong and positive relationship takes time to develop. If they feel you can add value to them or to their contacts, they may want to meet up again in the future. Share business cards only with those you have made a useful connection Culturally I’ve noticed some differences in the way business cards are used in Asia compared to many other parts of the world. In Asia, it’s a bit like the handshake greeting, in so much as everyone offers their business card almost immediately. Whilst I accept this cultural practice and reciprocate, I do often wonder whether this is an effective use of business cards, as this way most will end up in a drawer at home never to be looked at again. The reality is that most of us will only connect with one or two out of every five people we meet. I believe you should only offer your business card at the end of the meeting if the rapport and interest was strong enough for you both to want to stay in touch. There’s no shame in not having a strong connection, that would be quite normal where I come from, but then in an Asian culture I accept that may be uncomfortable. Instead I prefer to focus my energy where there is a two way meeting of the minds or at least where you feel you can help one another, then exchange contact details! One strong connection is worth a hundred weak ones.

Listen, listen, listen...more than you talk Are you listening carefully to what the other person is saying, or just waiting to speak? You don’t want to spend all of your time explaining what you do. First, find out what the other person does. Not only do people love to talk about themselves, but it will give you time to understand their needs and how you may be of service to them. Ask yourself, “How can I help this person?” Share ideas and resources to help them achieve their objectives. Genuinely care about the other person. Always maintain good eye contact; be alert to your body language and theirs and start to develop relationships with people in the group. Think “What do they want to know? How can I help them?” Is there anything that my network contacts could do for them? How often you should keep in touch so you are remembered? Research tells us that you start to lose rapport somewhere between the 1 and 3 month stage. People start to forget about you and your needs, so try to make contact with them every quarter. Remember that face to face contact is far more effective than telephone contact or email, so make the effort to meet those important contacts in your network every 3 months (minimum). If you want to know more tips on how to network effectively, including how to increase business sales through brilliant networking, how to remember people’s names, and how to exit someone's company gracefully..... look out for future British Chamber workshops!

12年10月22日上午9:44

Britain in Hong Kong

An education feature brought to you by YCIS

YCIS

Believes quality is key to developing the international school sector

This must start at an early age, taking into account the overall well-being of each student. YCIS understands the need to encourage students to become active and motivated learners, developing skills not only in literacy and numeracy but also in asking questions and observing according to their ndividu abilities. individual

Connecting East and West Con

YCIS students’ global mindset is nurtured through international exchanges and cross-cultural community service

Debate continues on the provision of student places in Hong Kong international schools. Long waiting lists at the most prestigious of these are a fact of life, as are the genuine concerns of the business community that a shortage of school places is a serious disincentive to the recruitment of top overseas professionals.

international educational institutions is growing rapidly. It’s an exciting time for education providers, who must ensure they meet the needs of both the local community and those of students who come from other places. An important question is: “What should an international education provide to students?”

Quality vs Quantity

Your Global Education

One point that is sometimes overlooked in this debate is that, according to government figures, there were 4,000 international school vacancies last year. Based on this ﬁgure, Yew Chung International School (YCIS) believes it’s the quality, not the quantity that is the issue. Parents want a good school, not just any school professing to offer international education.

YCIS ﬁrmly believes that the globalised world of the 21st century requires students to be international-minded citizens. This is particularly relevant to Hong Kong. As a major financial centre, the city needs to constantly connect with the rest of the world and foster innovation and diverse ways of thinking.

It’s apparent that further development is important to meet the demand for quality places and also to support H o n g K o n g ’s f u t u r e e c o n o m i c growth. The government has made clear its intentions to foster the city’s development as a regional education hub. Co-operation with mainland and

28071_BCO_Oct-1.indd 27

International education must go beyond establishing a strong platform for future careers. Local educators must lead the way in Hong Kong – and throughout Asia – in embracing new standards. They need to offer students an “extra something” that enables them to develop truly global perspectives and prepares them to become tomorrow’s leaders.

In Hong Kong’s context as a key in interface between East and West, dual-language education – mastering both Chinese and English – is key. By doing so, students develop intercultural skills and understanding. This is further nurtured through inter national exchanges, where students interact with their peers in other cultures, perform cross-cultural community service, and develop their understanding of the world around them, shifting their thinking from local to global. T h i s i s a m a j o r c h a n g e f ro m t h e historical development of international schools in Hong Kong, which began with a British education being offered to a mainly British school population. Even today, some international schools still offer a national curriculum leading to foreign qualiﬁcations for entry into a national education system overseas. In fact, they are really national schools in an international context.

Future World Citizens YCIS strongly believes that education s h o u l d b e v i e w e d h o l i s t i c a l l y, focusing on students’ intellectual, physical, cultural, spiritual and social development as future world citizens. The challenge now for Hong Kong is to build on its existing advantages in order to offer a world-leading international educational experience. Three core beliefs underpin the YCIS philosophy and practice. Education must: change with time, produce long-term benefits for individuals, help create a better future for all.

12年10月22日上午9:44

Began How it all

Community

The ﬁrst ever Poppy Day

THE REMEMBRANCE SUNDAY SERVICE IS AT 11AM ON SUNDAY 11th NOVEMEBER 2012.

was held on 11th November 1921. Traditionally Poppy Day is held on the second Saturday of November, the closest to 11th November, to mark the end of WWI on the Eleventh Hour of the Eleventh Day of the Eleventh Month in 1918. The use of the poppy was adopted because, in the areas of Northern France known as Flanders and P i c a rd y w h i c h s a w t h e heaviest fighting during WWI, it was the only other living thing which survived. Flowering each year it brought life, hope, colour and reassurance to those still fighting. Major Howson, a young Infantry Officer, decorated for bravery recognized that making artificial Poppies might offer opportunities for those disabled in the war who, on return home, seemed unemployable.

The Royal British Legion The British Legion, now the Royal British Legion, was founded by Earl Haig, formerly Commander-in-Chief in France, in 1921, to give practical help to the ex-Servicemen and women and their dependents. The surviving men and women who returned home after the war, many injured and scared by their experiences, did so to a world that would never be the same. People at home had learned to manage without them. For many the transition to civilian life was not easy. Some found difﬁculty in adjusting to their new way of life and others could not ﬁnd work due to their age or health.

Hong Kong and China Branch The Royal British Legion (Hong Kong and China Branch) has been active in Hong Kong since 1922. It was established for the purpose of providing financial assistance to Hong Kong ex-servicemen and women and their dependants who fall on hard times. Some of the ex-servicemen were prisoners of war in Hong Kong while others escaped to China to join the British Army Aid Group or to Burma and India to continue ﬁghting.

28071_BCO_Oct-1.indd 28

12年10月22日上午9:44

anThe Poppy

Britain in Hong Kong

Brigadier Christopher Hammerbeck, Executive Director, British Chamber of Commerce in Hong Kong

The Charitable Work of the Royal British Legion in Hong Kong The work carried out by the Legion increases year by year as exservicemen become older and are less able to take care of themselves and they become dependent on the Legion for financial assistance. In Hong Kong there are currently only 35 war veterans still alive. They are in their late 80s – 90s and many need our help. We help to run a clubhouse in Causeway Bay where these gentlemen can escape their sometimes very small and sparse accommodation and meet to play mahjong, have a cup of tea and meet their friends. It is not, however, just the war veterans we help. We also help the Local Enlisted Personnel (LEPs) who were made redundant when the British Garrison closed in 1997 following the handover. We estimate there are 14,000 who are eligible to apply to us for help. In addition to these we stand ready to assist former Gurkhas and British Ex Servicemen who have fallen on hard times.

THE CEREMONY, WHICH IS TAKING PLACE ON SUNDAY 11TH NOVEMBER 2012. COMMEMORATES THOSE WHO GAVE THEIR LIVES FIGHTING FOR THEIR COUNTRY IN ALL WARS, BUT ESPECIALLY WE REMEMBER THE MEN AND WOMEN WHO TOOK PART IN THE BATTLE FOR HONG KONG IN 1941.

The Legion is a charity organization. It relies upon public support to continue its work because the Legion receives no ﬁnancial support from the Government or from the Community Chest. The Legion also supplies wreaths, made by disabled exservicemen, for the annual Remembrance Sunday ceremony that falls on the second Sunday in November, the day after Poppy Day. It is a matter of principle that the Hong Kong and China Branch of the Royal British legion helps only Hong Kong people – 100% of them are resident in Hong Kong. Currently we pay 15 monthly grants to people in need – these grants range from war veterans to young widows with children who are still in school. So we need your support not only ﬁnancial by buying a poppy but by coming along to the service on the 11 th of November 2012.

28071_BCO_Oct-1.indd 29

12年10月22日上午9:44

Lifestyle

YES SIAM ! A recent work trip took me all around Thailand and of course, my mother jumped at the opportunity to take advantage of a week of luxury spas and pool villas. Arriving in Bangkok after a three hour flight was a bit of a shock to the system – it was hot and dusty. We spent two nights in a very cute boutique property, Ariyasom Villa, located just off Sukhumvit Road in the heart of central Bangkok. Hua Hin was next and Six Senses were kind enough to host us in a pool villa for two nights. Our final stop was four nights in Koh Samui. Bangkok Airways does direct flights from Hong Kong, making this island easily accessible for long weekend getaways and the choice of properties in Koh Samui seems endless. Beaches, nightlife, shopping, water sports, elephant trekking, temples and waterfalls are just a few options to keep you busy during your stay there. We spent two nights at W Retreat and two nights at Infinity Residences and Resort.

The Eugenia, Bangkok Tucked away and a little hidden, this Relais & Chateaux boutique hotel is one of Bangkok’s little known gems. Designed and decorated in an old world-style – a late 19-century colonial-style house, and tastefully furnished by the owner, it offers its guests a quiet oasis in the middle of a busy city. Each of the 12 suites includes four-poster beds, settees, dressers, vintage desks and hand-beaten copper bathtubs. The lobby, the reception area, the cafe, the library and the lounge are all set on the ground ﬂoor. The swimming pool and Thai pavilion are set in the back courtyard, surrounded by luscious green trees. There is a 24 hour valet on standby and a tuk tuk service in the driveway on hand to give you lifts to the nearby shopping malls or landmarks. But, The Eugenia’s pride and joy is their vintage car that is parked out front and of course, for hire, if you would like to arrive (or depart) in style.

Peninsula, Bangkok The Peninsula in Bangkok doesn’t disappoint. If you are going to be paying those prices, you are expecting top luxury and grandeur, which you will ﬁnd here.

28071_BCO_Oct-1.indd 30

12年10月22日上午9:44

Britain in Hong Kong

The 370 rooms and suites are spread across 37 floors and cater perfectly to any type of traveller. The effort they put in to making sure kiddies needs are also met is very impressive, from baby sitting services, kid sized bathrobes and slippers, to blankets with printed cartoons (pink or blue) to baby activity kits. All rooms are spacious and have a royal feel to them – some with balcony, some with terrace and all overlooking the river. You can chose from four restaurants from the Chinese Mei Jiang, the authentic home cooked Thai style, Thiptara, the River Café and Terrace and the River Bar, which of course are set by the Cha Phraya River and offer serene views and a more relaxed atmosphere. Activities range from lounging by the pool, painting and cooking classes in their very own herb garden, garland decorating, river cruises and of course shopping sprees. Don’t forget you can arrive in style, as they do also have a heli pad on the roof – now, if that’s not luxury, then I’m not sure what is.

Six Senses – Evasom, Hua Hin Three hours south of Bangkok is Hua Hin, where we would spend the next two nights in our private pool villa of Six Senses. Six Senses has a luxuriously rustic feel to it. Everything is very earthy, green and organic. From the food and herb garden, to the villas to even the Earth Spa which is a collection of mud huts – it doesn’t get more natural than that. The 240 rooms have a fresh feel to them with little pops of colour, which is copied throughout the resort. The beds are large, comfortable and come with mosquito nets, however, fear not, there are perfectly functional air conditions in every room! The pool villas are gorgeous and very light, with spacious stone showers and bathtubs (both indoor and out) and come with a 24 hour butler – ask for Tammy! There are two spas – The Six Senses Spa and The Earth Spa. The latter is not air-conditioned and comprises of mud huts that rest between beautiful lily ponds. The huts are naturally cooled and everything used in this Spa is completely natural – think coffee beans, aloe, papaya, cucumber…. The Six Senses Spa, of course, has airconditioning and a plethora of amazing treatments to choose from (my mother is an expert on them all…).

28071_BCO_Oct-1.indd 31

The Beach Restaurant has a great choice of Italian cuisine and a huge array of sorbets to choose from (try the Jasmine & Yoghurt and Coconut. Delish!) Of course, there is also the Thai restaurant which at night is entertained by Thai musicians and The Living Room, their main restaurant that serves an incredible breakfast spread.

Six Senses, Koh Samui Perched on a cliff overlooking the ocean, this resort has to be one of my favourites of the whole trip. It’s very earthy, relaxed and rustic, yet luxurious and modern. You are greeted at the top of the resort, then taken by buggy down the cliff where the rest of the property lies. All 66 villas are naturally designed and come complete with outdoor showers, dining tables, daybeds, sun loungers and spacious living rooms, with dark wood furnishings. A private butler is on hand for each villa that will assist you with anything. Dining on the Hill and Dining on the Rocks are the two main restaurants and very popular throughout the island. Both with stunning views and food to match. There is also an excellent wine cellar, infinity swimming pool (possibly the best one I’ve ever seen in my life), Thai cookery school, gym, library and a spectacular spa with outdoor treatment rooms. “Bus stops” dot the resort for you to call for a pick up at any time.

12年10月22日上午9:44

Lifestyle

Zazen, Koh Samui My favourite boutique property on the island, Zazen, has a Moroccan/Balinese feel to it with a peaceful vibe and friendly staff. Located just next to Fisherman’s Village in Bophut, and directly on the beach, Zazen is close to all the action. Comprising only 26 bungalows with enormous beds and open-air bathrooms, the rooms are either beach front or surrounded by gardens.

Four Seasons, Koh Samui The Four Seasons is one of the best. It was built on a coconut plantation, however, not a single tree was destroyed in its constructions, they simply built around them – some trees are part of the décor in your villa! The resort’s 40 one-bedroom villas and 14 one- to fivebedroom residences come with a private pools and stunning panoramic views of Laem Yai Bay and nearby Koh Pha Ngan. A great option for families, they have a wonderful kids club catering to children of any ages with daily activities such a coconut painting and crab racing on the beach.

The restaurant is famous throughout Samui for its delicious east-meets-west cuisine and relaxed atmosphere. The resort’s Le Salon de Ti is a bay-view tea lounge with Louis XVI-style furniture and crystal chandeliers. They are also the proud owners of their very own wine cellar and host weekly Thai dance shows. The beach bar connects the main pool and the private beach and is the perfect place to enjoy a sunset cocktail or two. The La Spa Zen is not to be missed, it is a traditional Thai spa with beautiful rooms and a long list of exotic treatments on offer.

The Forest spa – a spa in the jungle - comprises 5 treatment villas with private outside bathtubs ideal for couples. Dining at The Four Seasons is an experience of its own as the views are absolutely breath taking. Lan Tania serves Italian and Thai cuisine and Pla Pla which is set on the beach serves fresh ﬁsh daily, prepared according to your request.

Banyan Tree, Koh Samui Banyan Tree is a collection of 88 villas, all equipped with private pools, which are said to be one of the largest on the island. Overlooking the scenic Lamai Bay, the resort is nestled in a series of cascading terraces on a private hill cove in the south-eastern coast of Koh Samui.

B e s p o k e t r a v e l c o m p a n y L i g h t f o o t Tr a v e l (www.lightfoottravel.com) is an Asia-based tour operator specializing in tailor-made holidays, honeymoons, short breaks, boutique accommodation and private villas in Asia and beyond. For more information please call +852 2815 0068 or email info@lightfoottravel.com

Restaurants feature a variety of cuisines to suit all taste buds. International delights at The Edge, Thai dinners at Saffron, a fun BBQ at Sands, or cocktails by the pool. Of course, there is the option of in-Villa dining, because, let’s face it, sometimes (especially at Banyan Tree) there is no need to leave the room. Designed in a typically contemporary Thai style with modern amenities, enjoy the sweeping views over the Gulf of Thailand from your outdoor Jacuzzi, dining and sunlounging areas, or bask in the indoor bathtub and mosaictiled shower. Banyan Tree boasts some of the ﬁnest spa facilities with the island’s ﬁrst hydrotherapy wellness centre: a jungle-themed aquatic experience, including an artificial-rain walkway, crushed-ice fountain and scented steam chambers.

28071_BCO_Oct-1.indd 32

12年10月22日上午9:45

Britain in Hong Kong

Legal

Legal Q & A Law is always a daunting world for those outside the legal profession, yet its relevance to business situations can be very real and immediate. Britain in Hong Kong is here to help and is pleased to announce the new regular Legal Q & A column. Every month, legal experts from major law firms will be on hand to answer your queries. If you have any legal questions that you would like to ask our panel of experts please send them by email to emily@britcham.com This month the team from Howse Williams Bowers lays down the law (so to speak) on the first round of business-related questions.

Q. What is my liability as a shareholder in a Hong Kong company? A. If you have invested in a Hong Kong incorporated company as a shareholder, you may be eager to know the extent of your liability. Hong Kong adopts the same regime as England for limited companies, namely that you will only be liable up to the amount of your paid-up nominal share capital. The nominal value is ﬁxed by the company and is usually HK$1 per share. “Paid-up” means you have paid for the full nominal value of the shares. Shares of private limited companies are usually paid for in full when issued to shareholders. Therefore, if the company is in debt and is wound up, and you own fully paid-up share capital, you should not have to contribute any more money to satisfy the debt. However, if your shares are only partially paid, you will have to “top up” so that they are fully paid. Stefania Lucchetti, Partner, Corporate Practice, HWB.

Q. Daisy Chan commenced employment with Moon Cake Limited (“MCL”) on 8 October 2012 with a 3 month-probation period. After 5 weeks of employment, Daisy gave notice of pregnancy. MCL would like to terminate Daisy’s employment because of poor performance. Can MCL do that? A. The Employment Ordinance provides pregnant employees with protection against termination. After a pregnant employee has served notice of pregnancy upon an employer, the employer shall not terminate the employment unless the employer has grounds to summarily dismiss her. However, such protection is not available to employees on probation for a period not exceeding 12 weeks. MCL is allowed to terminate Daisy’s employment, so long as the reason is not connected to Daisy’s pregnancy (in this case, it is poor performance). The Company must effect termination before 8 January 2012, otherwise MCL will not be permitted to terminate Daisy’s employment until after she returns to work, after completion of her maternity leave. Catherine Leung, Senior Associate, Employment Practice, HWB.

Q: Our company has been approached by marketing agencies to sell our client and employee data, especially email addresses and phone numbers. Could this backfire on us under the Personal Data (Privacy) Ordinance (Cap 486)? A. Yes – it will probably backfire and we advise against this approach. The guiding principle under the Ordinance is that personal data (including email account details and phone numbers) should be carefully controlled. The data should not be used for any other purpose than the purpose for which it was to be used at the time of the original collection of the data. The exception to this is when a person consents to the use of their data for another purpose, although that is unlikely to happen in this kind of situation and, if it does, your company should secure written consent before the release of data to a third party. If a person suspects that your company has misused or sold their data for a purpose other than the original purpose of collection, they could make a complaint to the Privacy Commission and potentially, recover compensation. In addition, and perhaps just as significantly, unlawful use of personal data is likely to cause significant harm to your business reputation. Lisa Nabou, Senior Associate, Dispute Resolution Practice, HWB. For more information please contact: Stefania Lucchetti Partner +852 2803 3640 +852 2803 3618 stefania.lucchetti@hwbhk.com

Catherine Leung Senior Associate +852 2803 3630 +852 2803 3608 catherine.leung@hwbhk.com

Lisa Nabou Senior Associate +852 2803 3604 +852 2803 3608 lisa.nabou@hwbhk.com

Howse Williams Bowers (HWB) is a new independent Hong Kong law firm. Our key practice areas are commercial and maritime dispute resolution; corporate/commercial and corporate finance; clinical negligence and healthcare; insurance and professional indemnity insurance; employment; family and matrimonial law and intellectual property. As an independent law firm we are able to minimise legal and commercial conflicts of interest and act for clients in every industry sector. The partners have spent the majority of their careers in Hong Kong and have a detailed understanding of doing business in Asia. Disclaimer: The information contained in this article is intended to be a general guide only and is not intended to provide formal legal advice. Please contact enquiries@hwbhk.com if you have any questions about this article.

28071_BCO_Oct-1.indd 33

12年10月22日上午9:45

Past Events Y Network Head of the Table dinner hosted by Nick Sallnow-Smith On Thursday 6th September, Nick Sallnow-Smith, Chairman of the British Chamber of Commerce in Hong Kong and Chairman of Link REIT, hosted a dinner for 12 members of the YNetwork at the Kee Club. Nick began the evening by guiding us through his dynamic career trajectory in which he has been, at one stage or another, a teacher, civil servant, treasurer, property executive, and chairman. Despite these varied professions, Nick maintained that one thread of consistency throughout his career has been his lack of qualifications! In fact, he argued convincingly that it was this very lack of qualification that has been the source of his success. That is, by entering new industries or professions without extensive experience but with an enthusiasm to critically engage, he has been able to question the lazy consensus, challenge institutional inertia and create a momentum for change. Nick’s emphasis on the importance of a fresh perspective and the impetus to question the status quo struck a particular chord with me and the other members of the Y Network as we move forward in our careers. Nick went on to describe his numerous career successes as treasurer of Johnson Matthey, treasurer of Jardine Matheson and Chief Executive of Hongkong Land to name but a few. By comparing his experiences in each of these companies, Nick applied a refreshing approach to our lively discussion of company culture. He steadfastly argued that our loyalties should be to the people that make up an organization, and not necessarily to the institution itself. Furthermore, Nick highlighted the importance of diversity of approach within a company’s make-up. For example, although liberal arts degrees can sometimes be dismissed, he told us that if he could go back the one thing he would do differently would be to have done a degree in Philosophy as he believes that the intellectual rigour of this discipline encourages an independence of thought that is not only relevant, but also hugely advantageous, in the corporate world. I would like to take this opportunity to thank Nick for so generously hosting the Y Network and for providing a forum for such stimulating and candid debate on everything from the value of an MBA to abolishing the UK curriculum. Nick’s experiences provided us both with inspiration and practical advice on how to develop our careers going forward. If you would like to learn how you can attend the next Head of the Table event, or if you would like to ensure that the younger executives in your organisation can benefit from this unique forum, please email Lucy Jenkins at lucy@britcham.com.

Upcoming Events The Jardine Matheson Group & British Chamber YNetwork Scottish Ceilidh 2012 Event date: Venue: Dress:

26/10/2012 - 20:00 - 27/10/2012 - 01:00 Aberdeen Marina Club, 8 Shum Wan Road, Aberdeen, Hong Kong Black tie, with a touch of tartan!

It is that time of year again! The famous British Chamber YNetwork Scottish Ceilidh is back, and is set to be better than ever! Get ready to dance the night away to the popular reels, and enjoy some delicious Scottish fare, washed down with plenty of whisky! The night will open with Scottish pipers, sword dancing and a haggis addressing ceremony. There will also be a business card lucky draw with some amazing prizes to be won, so don’t forget to bring your business cards!

Asia - Regional Economic Outlook and Real Estate Opportunities Event date: Venue: Speaker:

30/10/2012 - 08:00 - 09:15 Harcourt Suite, 1/F, The Hong Kong Club Nicholas Brooke, Chairman, Professional Property Services Ltd.

“The View from the Boardroom” – is ‘Aspiration Britain’ deliverable? Event date: Venue: Speaker:

02/11/2012 - 12:30 - 14:15 The Atrium, 39/F, Island Shangri-La, Sir Roger Carr, CBI President

Sir Roger Carr is President of the CBI, the UK’s premier business lobbying organisation. At this lunch, Sir Roger will discuss how UK PLC must adapt and lead in order to drive international growth, and what this means for the Asia markets.

Marketing Strategies for SMEs Event date: Venue:

07/11/2012 - 12:30 - 14:00 CBRE ofﬁces, 3/F Three Exchange Square Timothy J. Peirson-Smith, Managing Director, Executive Counsel Limited

Whilst many countries in Asia share regional interests and have much in common when it comes to their economies, cultures, and climates, their economic status or political development and the business potential are not always so aligned.

Speaker:

Nicholas Brooke has been undertaking assignments and providing advice in the region for over 30 years and if you would like to learn more as to his views as to the current and future economic and investment opportunities across Asia, particularly in the real estate sector, join us for the Real Estate Committee breakfast on 30 October when Nicholas Brooke will share his thoughts with us.

Marketing communications and brand building for SMEs remain the most challenging areas for the sector in terms of what to do, who to have do it, and how to extract maximum ROI from a small budget. In this seminar, Timothy PeirsonSmith will share his experience on Public Relations and Marketing campaigns for large corporations and brands and will summarise his key learnings and distill experiences to those that will be appropriate to the needs and budgets of SMEs.

Macau - Gaming-Politics-Junkets - What is really going on and what is going to happen Event date: Venue: Speaker:

31/10/2012 - 08:00 - 09:15 Harcourt Suite, 1/F, The Hong Kong Club Steve Vickers, Chief Executive Ofﬁcer, Steve Vikers & Associates

Whilst the Macau gaming industry has been hugely successful over recent years, it currently faces various strategic challenges. These include political risks arising from the pending leadership change in the People’s Republic of China and other political risk indirectly arising from the US Presidential Elections. Recently highly publicised allegations as to breaches of various laws by the international operators in Macau present other challenges. Steve Vickers will help to put all of these matters into context and to identify factors which will impact upon the future direction of the gaming industry in Macau and Asia. Steve Vickers will help to put all of these matters into context and to identify factors which will impact upon the future direction of the gaming industry in Macau and Asia. Steve Vickers is the CEO of Steve Vickers & Associates (“SVA”) and has over 36 years experience in Asia. SVA is a specialist risk mitigation, corporate intelligence and risk consulting company. The company serves ﬁnancial institutions, private equity funds, corporations, high net-worth individuals and insurance companies and underwriters around the world.

28071_BCO_Oct-1.indd 34

Shaken Not Stirred Networking Drinks Kowloon Event date: Venue:

08/11/2012 - 18:30 - 20:30 Vibes, 5/F The Mira Hong Kong, Tsim Sha Tsui

Join us for our Kowloon networking drinks event at Vibes, The Mira - a chic, alfresco bar hidden in the fifth floor courtyard. Especially for all those working in and around Tsim Sha Tsui - unwind in style after work with an evening of drinks and canapés.

12年10月22日上午9:45

Take your business to new heights The British Chamber of Commerce is delighted to announce that CBRE is supporting the SME Committee’s SMART TIPS FOR SMALL BUSINESSES series of lunchtime seminars aimed at entrepreneurs and small business owners in Hong Kong.

The series is co-ordinated by the British Chamber’s SME Committee, a group of successful entrepreneurs, business owners and experts who understand the challenges faced by small businesses every day. The series aims to provide practical know-how as well as market analysis tailored to small business needs. The series is open to members and non-members.

With the support of CBRE, the SME Committee is looking forward to hosting a fascinating series of seminars this year.

Exciting Investment Opportunities! The British Chamber of Commerce is hosting its tenth Business Angel Event sponsored by Baker Tilly Hong Kong on 22 November 2012. This initiative provides an opportunity for new businesses, or existing small businesses looking to expand, to present their business plan in front of an audience of potential investors. Each candidate is screened before a committee of business professionals before the event and the investment opportunities that are subsequently presented on the day are high quality and often very exciting. Who are we looking for? This programme is designed for Angel Investors or their representatives who are looking for sound investment opportunities from Hong Kong based companies of around USD$100,000 to USD$2million. Angels should either be high net worth individuals looking to invest, investment companies or representatives of investors and the programme is open to both members and nonmembers of the British Chamber of Commerce. There are still spaces available at this event for any potential investor who would like to hear more. Space is limited so please let us know as soon as possible if would like to be part of this unique investment opportunity. Please visit angel.britcham.com to register or email emily@britcham.com for more information.