New horizons

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Offshore jurisdictions such as Cayman Islands, British Virgin Islands (BVI), Jersey, Guernsey, Bermuda and the Isle of Man are commonly islands small in size, but their contribution to the expansion of corporate China’s overseas commercial activities is sizeable. Chinese companies and investors, who once saw the islands mostly as tax havens, have been changing their perception of the value of these offshore jurisdictions.

Leader 1706A fast-growing number of Chinese companies are now using offshore corporate vehicles or structures as commercial platforms for further investment and trade expansion across the planet. As the central government continues to beef up outbound investment, the popularity of offshore vehicles among Chinese companies should continue to grow.

Offshore treasure explores the latest legislative and regulatory developments in offshore jurisdictions. Offshore financial centres in general are aligning themselves with the global community’s efforts in improving cross-border tax transparency, and many have incorporated the requirements of some Organisation for Economic Co-operation and Development (OECD) initiatives and the US Foreign Account Tax Compliance Act (FATCA) into their regulatory practice. While looking for treasure overseas, Chinese companies should also be careful of the hidden rocks beneath the water’s surface.

One sector changing people’s view of money games is financial technology (fintech). While mainland China has been at the vanguard of global fintech development, it is certainly not the only jurisdiction that has seen the huge potential of this industry. Tech evolution looks at fintech development in various jurisdictions across the Asia-Pacific region.

Different jurisdictions in the region all know they cannot afford falling behind in this intense fintech race. Leading economies in Asia, such as Australia, Japan and South Korea, have seen their governments include boosting the fintech industry in their development or reform plans. Traditional financial hubs like Hong Kong and Singapore have been vying to become the new global fintech pivots. Other important economies in the region are also catching up.

The fintech race has just started. Lots of regulatory challenges are still ahead. The jurisdiction that can find the best balance between regulatory grip and market freedom will probably be the winner.

The asset-backed securitization (ABS) in China has also been growing fast across a variety of sectors, including the property market. Market players have been testing ABS and other securitization structures innovatively, hoping to establish a blueprint for China’s future markets for real estate investment trusts (REITs) and commercial mortgage backed securitization (CMBS). ABS solutions analyzes some typical market experiments and the author anticipates new, more innovative forms or structures of real estate securitization for the market.