Tag Archives: chat
China Fund To Invest In US Property
http://www.ft.com/cms/s/0/9eefff48-d8bc-11e2-84fa-00144feab7de.html#ixzz2WqixgTWA By Simon Rabinovitch in Shanghai 19/06/13 A top Chinese fund manager will launch the country’s first fund tracking a US real estate index to cater to Chinese investors who think the US property market will outperform their own. GF Fund Management, China’s sixth-biggest fund company by assets under management, said it would next month offer a fund that aims to match the performance of the MSCI US real estate investment trust index. US property has in recent years become a top investment choice for wealthy Chinese. Real estate developers from China have also started looking to the US, making several big acquisitions this year. But for smaller Chinese investors, options have been more limited. GF Fund said its new product, which will be available in units as small as Rmb1,000 ($163), would bring US property to a much wider Chinese investor base. “Ordinary Chinese people can see that US real estate has more investment potential than Chinese real estate,” said David Qiu, global investment portfolio manager for GF Fund. “The US economy and property are still recovering,” he said. “Relatively speaking, Chinese property is more of a bubble.” Regulations in China still bar the trading of real estate investment trusts, so the fund will track the MSCI index rather than actually function like a reit. GF Fund did not say how much money it was hoping to raise. The fund will be available in China as part of the country’s qualified domestic institutional investor programme, which grants quotas to Chinese investors to legally get around the country’s capital controls. QDII products have suffered from a lack of demand in the past because many were launched before the global financial crisis and their subsequent plunge damaged their reputation for Chinese investors. But over the past three years, overseas markets have outperformed Chinese markets by a big margin and QDII offerings have started to pick up. Lion Fund Management in 2011 launched China’s first fund for investing in global Reits. Penghua Fund, another leading Chinese money manager, launched a US real estate fund in late 2011 that invests in specific stocks. The Penghua Fund product has gained nearly 11 per cent since its inception. During that same time, the Shanghai Composite index, China’s main stock index, has fallen more than 10 per cent. Mr Qiu said GF Fund would look at launching similar Reit-backed products for Europe if the US fund is successful. The fund launches at a tricky time for the sector globally. Reits and other income-paying equity products enjoyed a stellar run over the past 18 months as international investors sought out higher yields. But since the Federal Reserve raised the prospect of a tapering of its asset purchases in May, yield and dividend-paying stocks have suffered a reversal of fortunes. The global Dow Jones Reit index has fallen 10 per cent in the past month, while in Hong Kong at least one sizeable new listing has been pulled. However, according to bankers, many Asian investors have turned their attention to the US housing market instead, targeting listed homebuilders and property-related exchange traded funds. Despite obstacles to getting money out of their country, Chinese nationals are already the second-biggest foreign buyers of US property, after Canadians. Chinese accounted for 11 per cent of foreign purchases of US property last year, up from 5 per cent in 2007, according to the US national association of realtors. Additional reporting by Josh Noble in Hong Kong Continue reading
[Invest Korea] New Tax Rules Beneficial for Foreign Investors
Friday, June 14th, 2013 KOREA IT TIMES (INFO@KOREAITTIMES.COM) This month we present Part II of our two-part series on Korea’s amended Presidential Decree under the Law for Coordination of International Tax Affairs and other relevant tax laws. Below we look at important tax regulation changes providing foreign investors with advantageous effects. Background In order to provide better conditions for investing in Korea, the Korean government amended some provisions of the Enforcement Decree of Corporate Income Tax Act and the Enforcement Decree of Special Tax Treatment Control Law early this year. Related tax incentives encompass those relating to not only foreign direct investment but also investments through domestic funds or foreign funds, considering that the portion of foreign investment through an investment fund or a private equity fund is ever growing. 1. An Exception to the General Tax Treatment Toward a Limited Partner’s Income of a Domestic Private Equity Fund Prior to the amendment, if foreign investors invested in Korean shares through a Korean private equity fund (PEF), all income allocated to limited partners (including the foreign pension fund) by the Korean PEF was classified as dividends; therefore, regardless of the character of the underlying income, all distributed income by the Korean PEF was subject to withholding at 22 percent for dividends (or a reduced rate under an applicable tax treaty). Because foreign private equity investors, including foreign pension funds, usually realized investment profits in the form of capital gains, rather than dividends, such taxation had the effect of depriving investors investing through a Korean PEF of the opportunity to claim a capital gains tax exemption under an applicable treaty. Effective 2013, however, the amended tax law allows look-through treatment to determine the character of income of a Korean PEF allocated to certain foreign pension funds, thereby affording them the opportunity to claim tax treaty exemptions. As a result of the amended rule, such income allocated to eligible foreign pension funds will be classified as interest, dividends or capital gains from alienation of shares depending on the character of the underlying income recognized by the PEF. 2. Special Tax Treatment for Foreign Investment Entities Under the past tax regulation, certain domestic joint investment entities such as domestic private equity funds can elect to be treated as a partnership, which is a quasi pass-through entity subject to no entitylevel tax. On the other hand, the permanent establishment of foreign corporations is not entitled to this partnership election and was subject to corporate income tax of maximum 24.2 percent at the entity level. To eliminate this tax inequity and attract foreign investments, the lawmakers expanded the special partnership taxation election regime to include foreign eligible entities carrying on a business in Korea through a permanent establishment. According to the new rule, there is no partnership-level tax if the eligible foreign entity with a Korean permanent establishment elects to be treated as the partnership. Instead, limited partners, as passive investors in such foreign entity, are subject to Korean withholding tax with respect to their share of Korean income as dividend at the rate of 22 percent. However, a reduced treaty rate ranging from 5 percent to 16.5 percent should be available depending on the residency of the limited partner. After a one-year grace period, the proposed change will be applicable to taxable years commencing on or after January 1, 2014. 3. Amendments to Foreign Direct Investment Incentive Regime The foreign investment zone regime’s prescription of eligible businesses was expanded to include information technology services from February 15. Until the end of last year, the following businesses were eligible for the incentives: (i) manufacturing with a minimum investment amount of USD 30 million; (ii) tourism with USD 20 million; (iii) logistics services with USD 10 million; and (iv) research and development with USD 2 million. However, the amended rules include computer programming, system integration and management services, data processing/ hosting services and other related information services with a minimum investment amount of USD 30 million. Source : Invest Korea Continue reading
Aviation Industry Aims For Carbon-Neutral Growth
June 20, 2013 | Filed under: Air Freight , Breaking News , Environment , Government | Posted by: Charles Pauka Photo courtesy of Heathrow Airport. The International Air Transport Association (IATA) 69th Annual General Meeting (AGM) overwhelmingly endorsed the resolution on “Implementation of the Aviation Carbon-Neutral Growth (CNG2020) Strategy.” The resolution provides governments with a set of principles on how governments could: Establish procedures for a single market-based measure (MBM). Integrate a single MBM as part of an overall package of measures to achieve CNG2020. “Airlines are committed to working with governments to build a solid platform for the future sustainable development of aviation. They have come together to recommend to governments the adoption of a single MBM for aviation and provide suggestions on how it might be applied to individual carriers. Now the ball is in the court of governments. We will be strongly supporting their leadership as they seek a global agreement through the International Civil Aviation Organisation (ICAO) at its assembly later this year,” said Tony Tyler, IATA’s director general and CEO. Environment will be at the top of the agenda for the 38th ICAO Assembly in September 2013. The aviation industry urgently needs governments to agree, through ICAO, a global approach to managing aviation’s carbon emissions, including a single global MBM. IATA member airlines agreed that a single mandatory carbon offsetting scheme would be the simplest and most effective option for an MBM. “For governments, finding agreement on MBM will not be easy. It was difficult enough for the airlines, given the potential financial implications. Bridging the very different circumstances of fast-growing airlines in emerging markets and those in more mature markets required a flexible approach and mutual understanding. But sustainability is aviation’s licence to grow. With that understanding and a firm focus on the future, airlines found an historic agreement. This industry agreement should help to relieve the political gridlock on this important issue and give governments momentum and a set of tools as they continue their difficult deliberations,” Mr Tyler said. “Aviation is the first industry to suggest a global approach to the application of a single MBM to manage its climate change impact. This keeps aviation in the forefront of industries on managing carbon emissions. It was also the first to agree global targets. These are: improving fuel efficiency by 1.5% annually to 2020, capping net emissions with CNG2020, and cutting emissions in half by 2050 compared to 2005. And it was also the first to agree on a global strategy to achieve them. “An MBM is one of the four pillars of the aviation industry’s united strategy on climate change. Improvements in technology, operations and infrastructure will deliver the long-term solution for aviation’s sustainability. “Today’s agreement focuses on a single global MBM as part of a basket of measures. A single MBM will be critical in the short-term as a gap-filler until technology, operations and infrastructure solutions mature. So we cannot take our eye off the ball on developing sustainable low-carbon alternative fuels, achieving the Single European Sky or the host of other programs that will improve aviation’s environmental performance,” Mr Tyler said. An MBM should be designed to deliver real emissions reductions, not revenue generation for governments. The principles agreed apply to emissions growth post-2020. “Airlines are delivering results against their climate change commitments. For example, we are on track to achieve our 1.5% average annual fuel efficiency target. We need governments to be serious partners as well. Developing an MBM must not become an excuse for revenue generation by cash-strapped governments, or for avoiding incentivising investments in new technologies and sustainable low-carbon alternative fuels,” said Mr Tyler. A summary of the principles of the resolution includes the following: Setting the industry and individual carrier baselines using the average annual total emissions over the period 2018–2020. Agreeing to provisions/adjustments for: – Recognizing early movers, benchmarked for 2005–2020 with a sunset by 2025. – Accommodating new market entrants for their initial years of operation. – Fast-growing carriers. Adopting an equitable balance for determining individual carrier responsibilities that includes consideration of: – An ‘emissions share’ element (reflecting the carrier’s share of total industry emissions). – A post-2020 ‘growth’ element (reflecting the carrier’s growth above baseline emissions). Reporting and verification of carbon emissions that is: – Based on a global standard to be developed by ICAO. – Simple and scalable based on the size and complexity of the operator. Instituting a periodic CNG2020 performance review cycle that revises individual elements and parameters as appropriate. Continue reading
