Let’s talk about Hong Kong
28 August 2019
With the protests in Hong Kong ongoing, one may legitimately ask what will be the outcome of the current disruption and political turmoil? ZEDRA’s local team in Hong Kong, continues to watch the situation carefully.
The present political and social issues and accompanying unrest have caused some concerns for those setting up structures domiciled in Hong Kong, or booking or holding assets in the territory. At the same time, the current instability has highlighted for our clients in the region the need to get in place well thought-out and robust structuring sooner rather than later. As a global organisation, ZEDRA is well placed to assist our private clients set up global structures that can nimbly meet their needs when families are planning to invest/divest in different jurisdictions, or when family members themselves are thinking about migrating.
‘Ideally, we would like to see the Government of Hong Kong entering into dialogue with stakeholders and avoiding further escalation from both sides’ says Ivo Hemelraad, ZEDRA Group Director who visited Hong Kong only few weeks ago. ‘Hong Kong and Beijing should throw themselves behind the idea that the ‘one country, two systems’ practice can work to the benefit of both jurisdictions. It is the most sensible route and definitely the preferred one for the financial community,’ adds ZEDRA’s Deputy Group Chairman, Bart Deconinck.
In a practical sense, we haven’t seen companies or large amounts of capital leave Hong Kong as would be the case if corporations or individuals were genuinely panicked or believed the current tensions are the new status quo.
Certainly, however, we are seeing that there is the halting of business plans, but this is very much viewed in the local community as a ‘pause’ rather than anything more permanent. Alibaba are a prime example of a corporate adopting a hiatus in plans, announcing that they have pushed back their intended August Hong Kong IPO in a bid to wait until the worst of the storm has blown over. While Alibaba’s decision wasn’t a surprise to anyone in Hong Kong, there’s a definite understanding that the IPO is parked, rather than something that won’t happen at all. Our local team in Hong Kong is likely to see similar situation play out in numerous scenarios, albeit on a smaller scale.
The ZEDRA Group, and our local team in Hong Kong remain confident about Hong Kong’s future. We are, however, monitoring the current situation and supporting our clients until the situation resolves.
For more information, please contact John Ashwood, ZEDRA Hong Kong Managing Director.