The central bank of Vietnam recently released more severe rules to restrict the establishment of new commercial joint stock banks, Vietnam News newspaper reported on 14th, Jun. According to a decision issued on June 7 by the State Bank of Vietnam, a new bank must have at least 1 trillion VND (about 62.5 million U.S. dollars) in charter capital when it is set up, and must raise the figure to 3 trillion VND (187.5 million dollars) by the end of 2008. (Source: Xinhua News)


As from June 15, travelers entering or leaving the European Union will have to declare cash movements of more than EUR10,000 (US$13,300) as new customs laws designed to thwart money laundering and terrorist financing take effect. The European Commission says that the new legislation aims to introduce an EU-wide common approach to controlling cash movements into and out of the EU while complementing the EU's Money Laundering Directive, which has already introduced a monitoring of transactions made through credit and financial institutions. (Source: LawAndTax-News.com)


The Hong Kong Legislative Council has passed the Revenue Bill 2007, giving effect to stamp duty and alcoholic beverages duty reductions proposed in the 2007-08 Budget. According to the Financial Services & the Treasury Bureau the stamp-duty reduction will help more families own their homes, while the alcoholic beverages duty reduction will help promote the development of the local catering industry, tourism and wholesale and retail alcoholic beverage trade, and benefit the community at large. (Source: Tax-News.com)


Microsoft will spend US$12.3 million on a stake in television and electrical appliance manufacturer Sichuan Changhong Electric, Reuters reported. The Chinese company announced the deal on 18th, Jun. Microsoft and Changhong are to collaborate in developing, making and marketing televisions, computers and other digital home entertainment products, Reuters reported. Under the terms of the deal, the Chinese company will place 15 million new shares with Microsoft at RMB6.27 (US$0.82) - a 37% discount on its last trading price - which would give the US software giant a 1% holding. The sale has still to be approved by Changhong's board. (Source: chinaeconomicreview.com)


Jersey's Council of Ministers is considering extending the controls which exist to prevent the jurisdiction being used by money launderers or for financing terrorism. The review is part of the preparation for next year’s review of Jersey’s performance as a financial centre conducted by the International Monetary Fund (IMF). A public consultation was launched on extending the law, inviting views from business people. The proposals in the consultation papers would mean that new business sectors, such as estate agents, solicitors and businesses which deal in high value transactions, such as boats, cars and jewellery would be covered by the regulations. (Source: Tax-News.com)


China has selected the western cities of Chongqing and Chengdu as pilot reform cities targeting coordinated rural and urban development through reforms in all sectors, according to Sina (in Chinese) reports. The cities will submit details of their Analysts have called the program an important strategic decision to better promote the development of the country's poor central and western regions. There are only two other pilot reform cities following southern Shenzhen, eastern Shanghai's Pudong New Area and northern Tianjin's Binhai New Area. (Source: chinaeconomicreview.com)


China's Ministry of Commerce has listed a number of measures controlling foreign direct investment in its real estate sector as the country strives to avoid bubbles created by speculative money from abroad in the sector, according to Xinhua. Foreign investments are strictly limited in luxury real estate, and foreign investors are required to establish a real estate company before they can invest in real estate projects. The sale price of new houses rose by around 6% year-on-year in 70 mainland cities including Beijing, Shanghai and Shenzhen in the first three months this year. (Source: chinaeconomicreview.com)


The Chinese banking industry regulator said on 18th, Jun it has punished the branches of eight local banks for failing to prevent two clients from misappropriating loans of 4.46 billion yuan. Beginning 2001, China Nuclear Engineering and Construction (Group) Corporation obtained loans of more than 2.06 billion yuan from the Bank of Communications and the Bank of Beijing purportedly to build nuclear power stations. But in fact 87 percent of the money was used to finance its real estate subsidiaries and invest in the securities market, according to the China Banking Regulatory Commission (CBRC). China Shipping (Group) Company also deceived banks about loans. (Source: chinaeconomicreview.com)


Chinese mainland authorities will throw open the door for insurers to invest overseas to expand investment channels for the industry. The China Insurance Regulatory Commission is planning to launch a ruling within a month or two on insurers' overseas investment under the qualified domestic institutional investors scheme, said Sun Jianyong, director of the commission's insurance fund management. The ruling will allow insurers to convert their own assets into foreign currency and invest in mature overseas markets. (Source: Shanghai Daily)


Low tax regimes in two Swiss cantons have been deemed unconstitutional in a ruling by the Swiss Federal Court. Switzerland’s highest court decided that Canton Obwalden's degressive tax system aimed at attracting wealthy residents, is contrary to federal tax policy. Canton Schaffhausen, the only other canton to have degressive tariffs, should also amend its tax rules. The finance ministry said that the court's decision would neither change the system of tax competition between the cantons nor encourage tax harmonisation. (Source: Tax-News.com)


According to media reports, China's banking regulator has revealed that it expects HSBC, Citigroup, and two other foreign banks to begin issuing local currency debit cards to Chinese consumers in the near future. The Shanghai branch of the China Banking Regulatory Commission (CRBC) has reportedly received applications for debit card issuance from Citigroup and Bank of East Asia. In addition to this, Reuters reported that HSBC and Standard Chartered are also expected to apply in the near future, citing Wang Huaqing, assistant to the chairman of the CBRC. (Source: banking-business-review.com)


HSBC operations in Hong Kong and Swiss banks Raiffeisen and UBS have come out as top performers in a study looking at how 100 retail banks performed in branches, through call centres and online. Research by consultants Booz Allen Hamilton, which studied retail banks in 17 countries, found that Hong Kong has the best-performing banks, followed by Switzerland and then the US. It also found that the bank branch was declining in importance as more customers chose to transact online or by telephone. (Source: FT.com)


United Overseas Bank has officially opened its newly established Shenyang branch, (capital of Liaoning Province). United Overseas Bank (UOB) is the first Singapore bank to open a branch in Northeast China, an area which the Chinese government is focused upon developing. Shenyang is also located near the Bohai Rim, a key zone of economic activity. The new branch offers foreign currency banking services to foreigners, foreign enterprises and joint ventures, as well as local individuals and enterprises in China. UOB is also preparing to convert its China branches to a local corporation. (Source: www.banking-business-review.com)


A report on the top 50 centres of commerce, commissioned by MasterCard, shows London beating New York into second place, with Tokyo third and Chicago fourth. It confirms what several other reports have shown: that a falling share of financial business and complaints about heavy-handed regulation have challenged New York's position as the world's pre-eminent financial capital. The index combines six measures of commercial power, including flows of finance, volumes of business and the creation and dissemination of knowledge. It was developed by a team of academics specialising in economics, business, urban studies and finance. (Source: FT.com)


Invest Hong Kong, the investment promotion agency of the Hong Kong government, has announced a major investment promotion campaign targeting private owned enterprises (POEs) in high growth regions across Mainland China. The three-year campaign will focus on seven key provinces – Zhejiang, Jiangsu, Shandong, Liaoning, Sichuan, Guangdong and Fujian – and aims to provide POEs with the information and tools needed to expand internationally, using Hong Kong as their gateway. Companies in the seven targeted provinces will be served by Invest Hong Kong’s investment promotion teams based in Beijing, Chengdu, Guangzhou and Shanghai. (Source: Tax-News.com)


Four current and former partners of accounting firm Ernst & Young were charged with tax fraud conspiracy and other crimes relating to tax shelters for wealthy clients. The charges are the latest in a long-running criminal investigation by the Inland Revenue Service and the US Department of Justice which has already seen rival big four firm KPMG having to settle for $456 million and one of its former partners charged with fraud. (Source: timesonline.co.uk)


China's leading banks are applying to set up branches in the US as they look to expand their networks to cater for growing Chinese business interests in the country. Of China's biggest banks, only Bank of China and Bank of Communications currently have US branches, the Wall Street Journal reported. The assets of these US-based operations have tripled since 1997, driven largely by strong demand for banking services among the US subsidiaries of Chinese companies. (Source: chinaeconomicreview.com)


HSBC is preparing to push its private banking operations into China as part of a move to tap into the emergence of a fast-growing wealthy customer base in Asia. It is hoping to get the necessary regulatory approvals to open two or three private banking offices in China this year and start offering products such as RMB deposits. HSBC has been expanding its private banking operation in recent years. The division is just 5.5 per cent of group profits but it has seen profit before tax jump from $563m in 2003 to $1.214bn in 2006. The latest move comes as the number of high net worth individuals in China has been growing dramatically. (Source: FT.com)


China, the world's second-largest energy consumer, will this year begin offering corporate income tax preferences to overseas investors in natural gas processing, marketing and construction of urban gas pipelines in a move to use more of the clean energy source. Overseas companies investing in these fields will be exempted from the corporate income tax during their first two years of profitability, according to China's tax laws, the State Administration of Taxation said. Over the following three years they will be charged half of the tax. When the preference ends, overseas firms investing in construction of urban gas pipelines will pay a tax of just 15 percent. (Source: China Daily)


China is hoping to boost its chances of becoming a member of the Financial Action Task Force (FATF) with a set of tough new regulations which were released by the People's Bank of China (PBOC) on 11th, Jun. The regulations require financial institutions in China to immediately report suspected terrorist financing deals and to improve customer data collection and security measures. Foreign owned financial institutions that operate in China are also required to abide by the regulations. (Source: english.chinamil.com.cn)


China's Ministry of Finance said on 19th, Jun that, starting July 1, the country would cut or eliminate export tax rebates for 2,831 commodities representing 37 percent of the total number of items listed on customs tax regulations. A ministry spokesman said the move was one of a basket of measures to suppress overheated export growth and ease frictions between China and its trade partners. The country will abolish export tax rebates on 553 "highly polluting products that consume heavy amounts of energy and resources" such as salt, cement, and liquefied petroleum gas, said the spokesman. (Source: www.chinaview.cn)


The number of Chinese officially described as "middle class" has risen by almost 15 million people in the last two years to 80 million in total, according to official sources. About 6.15% of the population were considered middle class, and the number was still rising, Hou Yunchun, director of the Research Office of the State Council, told a conference on wealth management, the Shanghai Securities News reported. Hou's estimate was based on criteria used by the National Bureau of Statistics, which defines middle-income households as having an annual income between US$7,792 and US$65,790. (Source: chinaeconomicreview.com)


Domestic securities firms and mutual funds received permission on 20th, Jun to invest in overseas stocks and other financial products. The China Securities Regulatory Commission said the investments could be made through the Qualified Domestic Institutional Investor (QDII) program. Much of the money is expected to flow into Hong Kong but the move is also intended to have an impact on the domestic stock market by draining liquidity from the system and reducing speculation. The regulator did not indicate how much extra money could be invested through QDII but noted that institutions should "set an appropriate size limit for their foreign funds based on the market environment and investment product characteristics." (Source: chinaeconomicreview.com)


Chinese government is said to be examining the issue of offshore tax avoidance, after releasing figures showing that the bulk of investment by Chinese-based companies is flowing to low-tax financial centres. According to a report by Caribbean Net News, a clampdown on the offshore activities of Chinese enterprises may come after data released by the Ministry of Commerce of China showed that between January and May 2007, Hong Kong topped the capital investment table, followed by the British Virgin Islands, Japan, South Korea, Singapore, the USA, the Cayman Islands, Samoa, Taiwan and Mauritius. (Source: Tax-News.com)


Swiss wealth manager Julius Baer is considering selling some assets as part of a plan to remain independent, a move that could further lift its shares. The potential move by the firm, which provides banking services to wealthy private clients, was triggered by UBS AG's plan to shed its 20% stake in Julius Baer. Typically, having a large stake come on the market would send a company's shares lower, but analysts are raising their estimates for Julius Baer on the prospect of asset sales as well as the strength of its wealth-management business. Last month, Merrill Lynch, which has a 'buy' rating on Zurich-based Julius Baer, increased its target price for the bank to 105 Swiss francs ($85) from 88.50 francs. (Source: wsj.com)