Business leader defends Li Ka-shing’s use of tax haven
(ECNS) – Hong Kong billionaire Li Ka-shing’s restructuring of his business empire is not a retreat from the city or tax avoidance, said Chen Jingwei, chairman of the Hong Kong China Chamber of Commerce.
Li surprised the market by reorganizing his business empire into two new groups, one for property-related assets and the other for assets such as natural resources, telecommunications and infrastructure. The new groups will be registered in the Cayman Islands, a British overseas territory in the Caribbean known as a tax haven.
Chen, who is also chairman of Jinwei International Group Limited and vice chairman of the All-China Federation of Industry and Commerce, said the move is for the sake of business convenience, not a sign of withdrawal.
Over the last decade, many Hong Kong-listed branches of Chinese state-owned enterprises and private firms have been incorporated in the Cayman Islands to take advantage of preferential revenue policies, Chen told China Economic Net.
Companies enjoy attractive financial deals and access to capital markets at a lower cost under these preferential policies, which is totally different than tax avoidance, according to Chen.
These are legal methods to modify an individual’s financial situation in order to lower the amount of income tax owed, he said.
“Under its ‘bring in’ and ‘go global’ strategies, China has done better than any other country in regard to its business development environment. Any enterprise that gives up Chinese markets in the next thirty years will regret it,” he also said.
