Introduction

Multinational companies operating in Asia face a complex and evolving tax environment. Recent developments in South Korea, China, Singapore, and Hong Kong have significant implications for cross-border investments, corporate structures, and compliance obligations. This article provides a practical overview of the key tax issues businesses should understand in each jurisdiction.

Part One: Tax Considerations in South Korea

Corporate Migration

Corporate migration refers to a company changing its country of registration. For example, a company registered in Luxembourg might decide to move its registration to Delaware in the United States. This practice is becoming increasingly common among multinational companies seeking to simplify group structures by removing unnecessary layers of holding companies.

The Question: If a foreign company that owns a Korean subsidiary moves to another jurisdiction, does this trigger tax in Korea?

Korean Law: Korean law does not explicitly recognise corporate migration. Korean companies cannot move abroad, and foreign companies cannot become Korean companies. The law provides no specific guidance on the tax treatment of such moves.

The Tax Authority’s Approach: When reviewing corporate migration cases, the Korean tax authority (NTS) considers three factors: whether the move dissolves the existing company and creates a new one; whether there has been a change in the company’s legal substance, including its rights, obligations, or ownership; and whether there is a reasonable business purpose for the move.

Recent Rulings: In July 2023, the NTS issued rulings on two corporate migration cases. In one, a Malaysian company moved its registration to Singapore. The NTS ruled that this did not trigger Korean tax because the company continued to exist as the same legal entity and its substance did not change.^[1]

Practical Implications: Companies should maintain thorough documentation to prove that the entity remained the same throughout the migration. Without proper documentation, the tax authority may attempt to treat the migration as a taxable event.

Indirect Share Transfers

Consider this scenario: A foreign company owns shares in a second foreign company, which in turn owns shares in a Korean company. If the first company sells the shares of the second company to a buyer, this constitutes an “indirect transfer” of the Korean company shares.

The Tax Question: Does this indirect transfer create tax obligations in Korea?

Korean Tax Law: Korean tax law lists specific types of income that are taxable when earned by foreign companies. Income from indirect transfers is not included on that list.

The Tax Authority’s Position: The NTS sometimes attempts to “recharacterise” indirect transfers as direct transfers of Korean shares, using a “substance over form” principle. This would create tax obligations where none would otherwise exist.

Court Developments: In December 2024, the Jeju District Court ruled against the tax authority’s attempt to tax an indirect transfer. The Court held that the transfer did not constitute Korean-source income and that a specific statutory basis, not general principles, was required to impose such taxes (2023GuHap5879). Although the tax authority appealed, the matter was later upheld by the Jeju Division of the Gwangju High Court (2025nu1053) and the Supreme Court (2026Du30033) in favour of taxpayers.^[2]

Practical Implications: Companies involved in multi-layered holding structures should be aware of the potential for challenge and ensure their transactions have clear commercial purposes and proper documentation.

Recent Enforcement Developments

South Korea has seen several significant changes in its tax environment:

· A new administration has taken office with proposals to increase corporate tax rates

· A new commissioner has been appointed to lead the tax authority

· The government is expected to conduct more tax audits

Enforcement Fines: Under the New Enforcement Penalty Provision, for tax audits commencing on or after 1 September 2025, if a taxpayer fails to submit requested information and documents without justifiable reason, an enforcement penalty may be imposed. The previous penalty was limited to KRW 50 million, making it difficult to enforce compliance. The new framework represents a significant new compliance risk.¹

Corporate Tax Rates (2025-2026): South Korea applies progressive corporate tax rates: 10% on taxable income up to KRW 200 million, 20% on income between KRW 200 million and KRW 20 billion, and 25% on income exceeding KRW 20 billion. Value-added tax is levied at a flat rate of 10%.

Part Two: Tax Considerations in China

Unique Features of China’s Tax System

Legal Entity Requirements: Foreign companies cannot simply set up branches in China. They must establish separate legal entities, which creates different tax considerations.

Foreign Exchange Controls: China has strict procedures for moving money in and out of the country. Different types of payments follow different procedures, for example: investments must go through special capital accounts; trading payments are reported through customs; and service payments require contract registration with tax authorities.

Dispute Resolution: Almost all tax disputes in China are resolved through negotiation with tax authorities rather than through courts, owing to the strict statutory pre-conditions that taxpayers must first clear all tax liabilities or provide guarantees and exhaust all administrative reconsideration stages. Only then, can they gain further access to judicial review by the courts.^[3] Thus, it means that understanding local procedures and building relationships with tax officials is critical.

Key Tax Issues in Mergers and Acquisitions

Corporate Income Tax Rate: The standard corporate income tax rate in China is 25%. However, qualified High and New Technology Enterprises are eligible for a reduced rate of 15%. Small and low-profit enterprises may qualify for even lower effective rates.

Goodwill Treatment: Under China’s Enterprise Income Tax Law, purchased goodwill is not amortisable for tax deduction purposes. Goodwill is only deductible upon transfer or liquidation of the enterprise.^[4] This creates an additional tax cost that must be factored into acquisition planning.

Tax Loss Utilisation: China has placed strict limits on using accumulated tax losses from acquired companies. The standard carry-forward period is five years,^[5] extending to ten years for High and New Technology enterprises and science and technology SMEs. In certain regions like Nansha, the carry-forward period extends to 13 years.^[6]

Transfer Pricing Enforcement: While China’s transfer pricing rules are similar to international standards, enforcement relies heavily on negotiation with local tax authorities. Effective communication with local officials is essential for achieving favourable outcomes.

Holding Structures for China Investment

For companies investing in China, two jurisdictions are commonly used for holding structures:

1. Hong Kong: Geographically and politically close to China, making management easier

2. Singapore: Has a favourable tax treaty with China

Investment Opportunities

Despite economic challenges, certain sectors in China remain attractive: biotechnology, information technology, and joint manufacturing arrangements. Chinese companies continue to seek cooperation with foreign investors in these areas.

Part Three: Tax Considerations in Singapore

Singapore’s Approach to Tax Disputes

Singapore’s tax authority takes a principles-based approach to disputes. Few cases reach court, and the authority will often withdraw its position when a taxpayer’s position is legally sound. In 2023, only two civil tax cases went to court in Singapore.

Refundable Investment Credits (RIC)

Singapore introduced the Refundable Investment Credits regime in Budget 2024 in response to BEPS developments.² The Income Tax (Refundable Investment Credits) Regulations 2025 came into operation on 1 September 2025.³ The regulations provide for the implementation of the RIC, which supports up to 50% of qualifying expenditures for qualifying activities.⁴

Awarded on an approval basis by the Economic Development Board (EDB) or Enterprise Singapore, the RIC allows companies to receive support on qualifying expenditure categories.⁵ Rather than applying rigid statutory metrics, the approving authorities set custom substantive economic commitments tailored to the project’s scale and industry impact. Each RIC award has a qualifying period of up to 10 years.⁶ Eligible activities include investments to expand manufacturing capacity, establish headquarters or service centres, conduct R&D and innovation, engage in commodity trading, or carry out energy efficiency or decarbonisation projects.⁷

The RIC can be used for set-off against corporate income tax, Domestic Top-up Tax, and Multinational Enterprise Top-up Tax.⁸

Taxation of Capital Gains

Singapore traditionally does not tax capital gains. However, a new rule (Section 10L of the Income Tax Act 1947) was introduced effective from 2024.⁹ Foreign-sourced gains brought into Singapore may be taxed if the Singapore entity lacks sufficient economic substance. The rule does not apply if the entity has real operations, employees, and activity in Singapore, or if gains are not brought into Singapore.

Important Note: The threshold for “adequate economic substance” is not clearly defined in legislation, creating some uncertainty for taxpayers. However, the Inland Revenue Authority of Singapore (IRAS) has published an e-Tax Guide, “Income Tax: Tax Treatment of Gains or Losses from the Sale of Foreign Assets,” which provides guidelines on how the Comptroller of Income Tax determines the adequacy of economic substance for the purpose of Section 10L.¹⁰ Taxpayers must rely on these administrative guidelines rather than rigid statutory parameters.¹¹ The economic substance assessment takes into account factors such as the number of Singapore full-time employees of the entity and the qualifications and experience of employees or other persons.¹²

Transfer Pricing

Transfer pricing is a significant focus area in Singapore. A 5% surcharge is imposed on transfer pricing adjustments made for non-compliance with the arm’s length principle.¹³ The surcharge applies to adjustments made by the Inland Revenue Authority of Singapore (IRAS) or to self-initiated adjustments that increase income or reduce deductions.

Mutual Agreement Procedures are available for resolving cross-border disputes, with many cases resolved within two years. Advance Pricing Agreements provide upfront certainty.

Anti-Avoidance Rules

Singapore has a general anti-avoidance rule, but it is rarely applied to large multinational companies. Most anti-avoidance cases involve domestic professionals setting up multiple entities. The tax authority focuses on commercial substance.

Indirect Transfers: Market practice in Singapore considers it legitimate to transfer shares of a company that owns Singapore assets, except for residential property, which has specific rules. Circular transactions or “round tripping” of funds on the same day have been identified by courts as tax avoidance structures.

Part Four: Tax Considerations in Hong Kong

Hong Kong’s Tax System at a Glance

Territorial Basis of Taxation: Hong Kong operates on a territorial basis of taxation. Under section 14 of the Inland Revenue Ordinance, any person carrying on a trade, profession or business in Hong Kong is chargeable to tax on all profits arising in or derived from Hong Kong from such trade, profession or business.¹⁴ The tax residence of a person is irrelevant for profits tax purposes. Non-residents carrying on business in Hong Kong are chargeable on profits arising from Hong Kong unless protected by a tax treaty.

Profits Tax Rates: Hong Kong applies a two-tiered profits tax system. For corporations, the rate is 8.25% on the first HKD 2 million of assessable profits, and 16.5% on profits above that threshold.^[7] For unincorporated businesses, the rate is 7.5% on the first HKD 2 million of assessable profits, and 15% on profits above that threshold.^[8] For groups with multiple entities, only one entity can claim the lower rate.^[9]

Capital Gains and Dividends: Gains and receipts that are capital in nature are generally not subject to tax in Hong Kong. Dividends from local companies are exempt, while dividends from overseas companies are generally treated as offshore income and not taxable. However, the foreign-sourced income exemption (FSIE) regime has introduced important exceptions.

No VAT/GST: Hong Kong does not have a value-added tax, goods and services tax, or sales tax.

Stamp Duty: Stamp duty is charged on transfer of Hong Kong stock by way of sale and purchase at 0.2% of the consideration (or the market value if higher) per transaction.

One-off Tax Reduction: The Inland Revenue (Amendment) (Tax Concessions) Ordinance 2025 was gazetted on 9 May 2025 to give effect to the 100% reduction of profits tax for the year of assessment 2024/25, subject to a cap of HKD 1,500 per case.¹⁵ For the year of assessment 2025/26, a similar 100% waiver applies subject to a cap of HKD 3,000 per case.

OECD Pillar Two – Global Minimum Tax

Overview: In July 2021, Hong Kong joined more than 130 jurisdictions in accepting the OECD’s two-pillar international tax reform framework to tackle base erosion and profit shifting.¹⁶ Hong Kong applies the global minimum effective tax rate of 15% on in-scope MNE groups starting from 2025.¹⁷

The GloBE Rules: Under Pillar Two, a global minimum tax of 15% is imposed on multinational enterprise groups with annual consolidated revenue of EUR 750 million or above in at least two of the four fiscal years immediately preceding the current fiscal year.¹⁸ The rules operate through two interlocking mechanisms: the Income Inclusion Rule (IIR) which is the primary rule that imposes top-up tax on the parent entity of an in-scope MNE group, and the Undertaxed Profits Rule (UTPR) which acts as a backstop to IIR.

Hong Kong’s Implementation: The Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Ordinance 2025 was enacted on 6 June 2025.¹⁹ The IIR and HKMTT provisions apply to fiscal years beginning on or after 1 January 2025, while the UTPR timeline will be further announced. The rules incorporate the GloBE Model Rules promulgated by the OECD through the newly added Part 4AA and Schedules 61 to 64 of the Inland Revenue Ordinance.²⁰

Hong Kong Minimum Top-up Tax (HKMTT): Hong Kong has introduced its own qualified domestic minimum top-up tax. A jurisdiction in which an in-scope MNE group operates and for which the effective tax rate is below the minimum rate has the first priority to collect the top-up tax if it has implemented its own QDMTT.

Compliance Obligations:

· Declaration of In-Scope Status: Respond to IRD letter within 2 months (generally by November 2025)

· Filing of top-up tax notification: Within 6 months after the end of the reporting fiscal year

· Filing of top-up tax return: Within 15 months (extended to 18 months for the first transition year)

· Payment of top-up tax: Due one month after the return filing deadline or notice of assessment

The IRD launched the first phase of the Pillar Two Portal on 19 January 2026 for electronic filing of top-up tax notifications.²¹ Electronic filing of Profits Tax returns will become mandatory for all Hong Kong constituent entities of in-scope MNE groups starting from the Year of Assessment 2025/26.²² Under a “once-in, always-in” approach, once an entity falls within the scope of the mandatory e-filing regime, it will remain subject to the regime permanently, regardless of whether it continues to be part of an MNE group for the GloBE/HKMTT regimes in subsequent years of assessment.²³

Foreign-Sourced Income Exemption (FSIE) Regime

A Significant Shift: Hong Kong’s FSIE regime, introduced in 2023 and expanded from 1 January 2024, represents a significant shift from its traditional territorial tax system.²⁴ Foreign-sourced passive income received in Hong Kong is now taxable unless specific exemption conditions are met. Originally limited to interest, dividends, equity disposal gains and IP income, the regime was extended in 2024 to cover non-equity disposal gains.

Covered Income: The FSIE regime encompasses four categories of foreign-sourced passive income: interest income, dividend income, disposal gains from the sale of assets (equity interests and, from 1 January 2024, other types of assets), and IP income (from patents or software-related copyrights).

Exemption Conditions:

For interest and non-IP disposal gains, the exemption requires an economic substance requirement. For dividends and equity interest disposal gains, the exemption requires either an economic substance requirement or a participation requirement. For IP income and IP disposal gains, the exemption requires a nexus requirement.

A foreign-sourced disposal gain that falls within the scope of the FSIE regime may be taxable if the exemption requirements are not met, even if the gain is capital in nature.

Economic Substance Requirement: Multinational entities must demonstrate economic substance in Hong Kong to claim exemption. Applicants need to pass a “sufficient level test”, including employing a sufficient number of qualified employees and incurring an adequate level of operating expenditure in Hong Kong for the relevant activities.

Recent Clarifications: On 24 July 2025, the IRD published additional FAQs providing clarifications.²⁵ A Hong Kong taxpayer’s share of profits from an overseas associate recognised under the equity method does not constitute a dividend for FSIE purposes. Only when profits are formally declared and distributed will the income be treated as a dividend. Where foreign-sourced disposal gains are deemed taxable, such gains are computed by reference to disposal proceeds less acquisition cost and direct expenses. An in-kind dividend in the form of shares in an overseas entity will generally not be regarded as “received in Hong Kong” where the investee entity is incorporated and managed outside Hong Kong.

Practical Implications: The FSIE regime has significantly increased compliance complexity. Companies should track dividend declarations separately from accounting results, maintain detailed documentation to distinguish direct disposal costs from other expenses, and carefully document the overseas nature of investee management and operations for in-kind distributions.

Transfer Pricing

The Arm’s Length Principle: Hong Kong’s transfer pricing rules, introduced in 2018, follow global standards set by the OECD. The arm’s length principle requires that transactions between connected parties be priced as if they were between independent parties under comparable circumstances.

2025 Updates: The Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Ordinance 2025 updated Hong Kong’s transfer pricing rules to align with the 2022 OECD transfer pricing guidelines.²⁶ With increased reviews expected in 2025, maintaining clear documentation is essential.

Documentation Requirements: Companies must document how intercompany prices are set and prepare Master File and Local File records if they cross certain thresholds.

Transfer Pricing Methods: The methods that can be used to determine the arm’s length price include Comparable Uncontrolled Price Method (CUP), Resale Price Method (RPM), Cost Plus Method (CPM), Transactional Net Margin Method (TNMM), and Profit Split Method (PSM).

Stamp Duty

Share Transfers: Stamp duty is charged on the transfer of Hong Kong stock by way of sale and purchase at 0.2% of the consideration (or the market value if higher) per transaction. The duty is calculated at 0.1% on every sold note and every bought note. The total stamp duty rate was reduced from 0.26% to 0.2% on 17 November 2023.²⁷

Property Transfers: Effective from 11 am on 26 February 2025, ad valorem stamp duty on transfer of properties is charged at progressive rates.²⁸ The Stamp Duty (Amendment) Ordinance 2025 was gazetted on 16 May 2025. The progressive rates start at HKD 100 for properties valued at up to HKD 4 million, and increase progressively to a maximum of 4.25% for properties valued exceeding HKD 20 million.

Intra-Group Relief: Section 45 of the Stamp Duty Ordinance provides relief from stamp duty for transfers of shares between associated companies within the same group, subject to certain conditions being satisfied, including that one body corporate must be the beneficial owner of not less than 90% of the issued share capital of the other.

Company Re-domiciliation Regime

New Framework: The Companies (Amendment) (No. 2) Ordinance 2025 was gazetted and came into effect on 23 May 2025.²⁹ The regime allows eligible overseas-incorporated companies to transfer their legal domicile to Hong Kong without needing to wind up or re-incorporate.

Key Features: Four types of companies may redomicile to Hong Kong: private companies limited by shares, public companies limited by shares, private unlimited companies with a share capital, and public unlimited companies with a share capital.³⁰ Under normal circumstances, the Companies Registry will complete the approval process within two weeks. A 120-day period is allowed for the re-domiciled company to complete the deregistration procedures at its place of incorporation.³¹

Tax Implications: Re-domiciled companies are treated as Hong Kong-incorporated entities. Hong Kong does not impose tax on the basis of residence or domicile. To eliminate double taxation, the Amendment Ordinance provides for unilateral tax credits for re-domiciled companies. A re-domiciled company will also be regarded as a resident of the Hong Kong SAR for the purpose of comprehensive avoidance of double taxation agreements.

Applications Open: Re-domiciliation applications opened on 23 May 2025.³²

Tax Treaty Network

As at 31 March 2025, Hong Kong has signed comprehensive avoidance of double taxation agreements with 51 jurisdictions.³³ Recent additions include a Comprehensive Double Tax Agreement with the Maldives signed on 26 May 2025, with Jordan signed on 4 September 2025, with Rwanda signed in October 2025, and with Norway signed on 16 December 2025.³⁴ The agreement with Norway marks Hong Kong’s 55th CDTA.

Part Five: Common Themes Across Jurisdictions

The Importance of Certainty

Across all jurisdictions, what multinational companies value most is certainty. Transfer pricing presents particular challenges because acceptable prices always fall within a range, leaving room for disagreement. This is why more companies are seeking Advance Pricing Agreements and other mechanisms to obtain certainty in advance.

Divergence in Tax Systems

While Asian countries continue to align with global standards on transfer pricing and tax treaties, each jurisdiction maintains its own approach to domestic tax matters. Countries use tax policy as a tool to attract investment and shape their economies.

Investment Flows from China

Chinese investment in Southeast Asia is driven by two factors: government policy encouraging companies to invest overseas, and rising labour and operating costs in major Chinese cities, prompting companies to seek lower-cost locations.

Part Six: Strategic Conclusion

Despite the recent introduction of the FSIE regime and the 15% global minimum tax under OECD Pillar Two, Hong Kong still distinguishes itself from other jurisdictions for its unchanged DNA: it retains the advantage of the simplest tax system in Asia.Based on the analysis above, Hong Kong emerges as the preferred jurisdiction for most generic multinational operations. For most generic multinational operations, the combination of the simplest tax system in Asia (no VAT, no capital gains tax, no dividend withholding tax), the lowest effective tax rate for SMEs (8.25% on first HKD 2 million), territorial taxation with full offshore income exemption, unmatched gateway access to China, and strong capital markets makes Hong Kong the most compelling choice for trading, holding, and treasury operations.

Why Hong Kong Wins:

Hong Kong is the only jurisdiction in Asia that combines no VAT or GST, no capital gains tax, no dividend withholding tax, territorial taxation, and full offshore income exemption. Singapore comes close but has a 9% GST and more restrictive offshore income exemption rules. South Korea imposes VAT at 10%, capital gains tax, and dividend withholding tax, and taxes worldwide income. China imposes VAT at 13%, capital gains tax, dividend withholding tax, and taxes worldwide income.

Corporate Tax Rate Comparison:

Hong Kong applies 16.5% standard rate with 8.25% on first HKD 2 million. Singapore applies 17% standard rate with effective rates as low as 4.25% for new companies. South Korea applies 10%-25% progressive rates with R&D credits up to 50%. China applies 25% standard rate with 15% for high-tech enterprises.

Global Competitiveness: In the IMD 2025 World Competitiveness Ranking, Hong Kong staged a significant resurgence to rank 3rd globally with a score of 99.2 out of 100, sitting neck-and-neck with Singapore, which ranked 2nd with a score of 99.4. Hong Kong was ranked #1 globally for Tax Policy and #1 for Business Regulations.³⁵

When Other Jurisdictions Win:

For trading, e-commerce, and holding companies, Hong Kong is the best choice due to no VAT, offshore exemption, and the 8.25% SME rate. For technology, R&D, and biopharma companies, Singapore is the better choice due to its 400% R&D deduction and 15% concessionary rate. For manufacturing and semiconductors, South Korea offers up to 50% R&D credit and strategic industry support. For companies targeting the China market, China itself offers the 15% high-tech rate and direct market access.

Singapore is Hong Kong’s only serious competitor. However, its 9% GST and more restrictive offshore income exemption rules give Hong Kong a clear edge for most trading, holding, and treasury operations. However, businesses should note that Singapore offers superior R&D incentives (400% deduction), a larger treaty network (100+ countries), and a more developed family office ecosystem. For technology, biopharmaceutical, and asset management companies, Singapore may still be the better fit.

In the era of BEPS 2.0, the days of relying on simple, tax-driven structures are gone. These new rules require the MNEs to move beyond merely comparing nominal corporate tax rates. Instead, they should holistically consider tax benefits of a jurisdiction against its newly introduced compliance costs. Ultimately, there is no one-size-fits-all solution, The choice depends on your specific business needs, industry, and target markets. The analysis above summarises which jurisdiction best suits different business types.

Footnotes

¹ ‘Seoul Approves Amendment to BNTL Including Enforcement Fines’ (PwC Korea, 27 February 2025).

² ‘Singapore Budget 2024 Highlights’ (RSM Singapore, 2024).

³ Income Tax (Refundable Investment Credits) Regulations 2025 (Singapore) reg 1.

⁴ Income Tax (Refundable Investment Credits) Regulations 2025 (Singapore) reg 3.

⁵ ‘Singapore Implements Refundable Investment Credit Framework’ (Mondaq, 2 October 2025).

⁶ ‘Singapore brings Refundable Investment Credits regime into force’ (Sovereign Group, 1 December 2025).

⁷ ‘Singapore brings Refundable Investment Credits regime into force’ (Sovereign Group, 1 December 2025).

⁸ IRAS, ‘Refundable Investment Credit (RIC)’ (IRAS, 2026).

⁹ Income Tax Act 1947 (Singapore) s 10L.

¹⁰ IRAS, ‘Income Tax: Tax Treatment of Gains or Losses from the Sale of Foreign Assets’ (e-Tax Guide, 2024).

¹¹ Tan Kay Kheng and Tan Shao Tong, ‘Section 10L – Taxation of Gains From Sale of Foreign Assets’ (WongPartnership, November 2023).

¹² ‘Section 10L explained: Economic substance and tax compliance’ (Forvis Mazars, 2025).

¹³ ‘Singapore Transfer Pricing Guidelines (Eighth Edition)’ (EY, 19 November 2025).

¹⁴ Inland Revenue Ordinance (Cap 112) (Hong Kong) s 14.

¹⁵ Inland Revenue (Amendment) (Tax Concessions) Ordinance 2025 (Hong Kong).

¹⁶ OECD, ‘Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy’ (1 July 2021).

¹⁷ Inland Revenue Department, ‘Global Minimum Tax and Hong Kong Minimum Top-up Tax for Multinational Enterprise Groups’ (IRD, 2025).

¹⁸ OECD, ‘Tax Challenges Arising from the Digitalisation of the Economy – Global Anti-Base Erosion Model Rules (Pillar Two)’ (OECD, 2021).

¹⁹ Inland Revenue (Amendment) (Minimum Tax for Multinational Enterprise Groups) Ordinance 2025 (Hong Kong).

²⁰ Inland Revenue Department, ‘Global Minimum Tax and Hong Kong Minimum Top-up Tax for Multinational Enterprise Groups’ (IRD, 2025).

²¹ Inland Revenue Department, ‘Pillar Two Portal’ (IRD, 19 January 2026).

²² ‘Pillar Two – Global Minimum Tax’ (RSM, 4 November 2025).

²³ ‘Connected Hong Kong tax compliance’ (PwC, 27 November 2025); ‘Hong Kong: IRD issues updated guidance on Pillar 2 e-filing’ (Regfollower, 23 October 2025).

²⁴ Inland Revenue Department, ‘Foreign-sourced Income Exemption (FSIE) Regime’ (IRD, 2024).

²⁵ ‘Hong Kong FSIE Regime: IRD Issues Further Clarifications (July 2025)’ (The French Chamber of Commerce and Industry in Hong Kong, 24 July 2025).

²⁶ ‘Hong Kong’s Transfer Pricing Rules and 2025 Updates’ (Mondaq, 5 September 2025).

²⁷ Stamp Duty (Amendment) (Transfer of Securities) Ordinance 2023 (Hong Kong), s. 3.

²⁸ Stamp Duty (Amendment) Ordinance 2025 (Hong Kong).

²⁹ Companies (Amendment) (No. 2) Ordinance 2025 (Hong Kong).

³⁰ Companies Registry, ‘Company Re-domiciliation Regime’ (Hong Kong, 2025).

³¹ ‘Re-domiciliation applications open’ (news.gov.hk, 23 May 2025).

³² ‘Re-domiciliation applications open’ (news.gov.hk, 23 May 2025).

³³ Inland Revenue Department, ‘Comprehensive Avoidance of Double Taxation Agreements’ (IRD, 31 March 2025).

³⁴ ‘Hong Kong Signs Tax Treaty with Norway’ (Yahoo Finance, 16 December 2025).

³⁵ IMD World Competitiveness Center, ‘IMD 2025 World Competitiveness Ranking’ (IMD, 17 June 2025);

^[1] ‘South Korea: A Tax: Consultants Overview’ (Chambers and Partners, 2026)

^[2] Yvette Chan and Florence Leung, ‘Exploring Indirect Transfer Rules in APAC region: Effects of the Hong Kong Inward Re-Domiciliation Regime’ (Alvarez & Marsal, 14 July 2025)

^[3] Article 88(1) of the Law on the Administration of Tax Collection.

^[4] Article 12 of the Law on Enterprise Income Tax.

^[5] Article 18 of the Law on Enterprise Income Tax.

^[6] Notice on Preferential Corporate Income Tax Policies in Nansha, Guangzhou

issued by the Ministry of Finance and State Tax Administration of the PRC (Caishui [2022] No. 40). However, this preferential policy will end on 31 December 2026.

^[7] Inland Revenue Ordinance (Cap 112) (Hong Kong) Sch. 8B(2)(a).

^[8] Inland Revenue Ordinance (Cap 112) (Hong Kong) Sch. 8A(2).

^[9] Inland Revenue Ordinance (Cap 112) (Hong Kong) s. 14AAC(4).

Disclaimer

The information and analyses contained in this article are provided for general informational and educational purposes only and do not constitute formal legal, tax, accounting, or professional advice. While every effort has been made to ensure the accuracy and completeness of the information at the time of writing, legal and regulatory frameworks are subject to rapid change. Readers should not act or refrain from acting upon any information in this article without seeking appropriate professional advice tailored to their specific circumstances. Transmission or receipt of this publication does not create a lawyer-client or advisory relationship between the author and any reader.

The Rising Trend of Youth in the Gig Economy: A Crossroad of Choices and Consequences

In recent years, platforms like Foodpanda, Uber Eats, Keeta and similar delivery services have surged in popularity, offering flexible earning opportunities. These platforms have become a tempting alternative to attending school for many young people, especially teenagers in Form 2 or 3. However, this shift raises critical questions about priorities, awareness, and long-term implications. Are young people making informed choices? Are families fully considering the risks? And what happens if this seemingly convenient path suddenly vanishes?

Is Skipping School for the Gig Economy a Wise Trade-Off?

The allure of instant income is undeniable. For teens, earning money early can feel empowering—a chance to contribute to household expenses, buy personal items, or even gain independence. But does this short-term gain justify sacrificing education? School isn’t just about academic knowledge; it’s a space for developing critical thinking, social skills, and emotional resilience. When young people exit formal education prematurely, what gaps might emerge in their ability to navigate complex challenges later in life?

Are Parents Aware of the Hidden Risks?

Parents often support their children’s decisions with the best intentions, valuing financial responsibility and work ethic. But are families thoroughly weighing the dangers? Gig work exposes youth to physical risks—road accidents, exhaustion, or unsafe environments. Emotionally, the pressure of irregular income and customer demands can strain mental health. Worse, without formal contracts or benefits, these jobs offer little security. Are parents considering how a lack of education might limit their child’s future opportunities?

What Happens to Emotional and Physical Growth?

Adolescence is a pivotal phase for holistic development. Schools provide structure, peer interactions, and mentorship—elements crucial for emotional maturity. While teaching responsibility, Gig work often isolates young workers in a transactional environment. Physically, long hours on the road can lead to chronic stress or injuries. Does substituting classroom learning with gig labour risk stunting their growth into well-rounded adults?

If Platforms Shut Down, What’s Next?

The gig economy is volatile. Companies can downsize, change policies, or close overnight. Imagine a 16-year-old who dropped out of Form 2 to deliver food suddenly facing unemployment. Without education credentials or specialised skills, how would they compete in a job market increasingly demanding qualifications? Re-entering school later may feel impossible, trapping them in low-wage cycles. Is this a risk worth taking?

The Bigger Picture: What Future Are We Building?

Education is an investment in adaptability. While gig work offers immediate rewards, it rarely provides pathways for advancement. A teenager today might earn a steady income, but what happens in a decade when automation or market shifts disrupt these roles? Without foundational knowledge or certifications, career pivots become daunting. Are we raising a generation prepared for uncertainty or one vulnerable to it?

A Call for Reflection, Not Judgment

This isn’t about blaming youths or parents. Financial pressures, societal norms, and the gig economy’s appeal are real. But it’s vital to ask: Are we prioritising today’s convenience over tomorrow’s stability? Can families explore alternatives—part-time work after school, vocational training, or scholarships—that balance earning and learning?

The choices made today will shape the opportunities of tomorrow. For youths tempted by quick cash and parents navigating tough decisions, the question isn’t just about what works now—it’s about what sustains forever.

Let’s reflect: What kind of future are we enabling? And is there a way to safeguard both the present and the years ahead?

Lastly, I would like to thank my dear friend Muhammad Yasir Iqbal for bringing this matter to my attention.

Ahmed Ashfaq

Opportunities do not guarantee outcomes, but they change what you believe is possible. I wrote this piece as a reflection on exposure, mentorship programmes, and the realities of entering the profession without a conventional path.

I did not come into this profession through the front door. I came through a side entrance I found myself, because no one thought to hand me a key. I applied for every internship, vacation scheme, and placement that crossed my path. The answer, when it came at all, was no. I entered the profession regardless, not with fanfare, but with a decision.

That experience has shaped how I now view the programmes designed to help young people enter the legal profession. They are not perfect. Nothing built by human hands ever is. But hidden within their imperfection is a truth we overlook at our peril: exposure, even when it does not announce itself in bold terms, can shift the entire trajectory of a life.

The Nature of Exposure

What is exposure? It is not a job offer. Not an internship. Not even a promise.

It is the chance to stand in a room you never knew existed, to watch how people speak, how they carry themselves, how the machinery of a profession actually turns. The moment a young person walks into a commercial firm for the first time, sits thirty floors up, and hears a partner explain a cross-border merger, they may understand only half of it. But they see something else: that this world exists, and that it is peopled by individuals no different in essence from themselves.

That moment lodges in the mind like a seed. It may lie dormant for a year or two. But when the time comes to write an application, attend an interview, or make a decision, the seed has already taken root. The young person is no longer guessing. They have seen. And having seen, they can begin to imagine themselves inside the picture.

This is the quiet work that fellowship programmes do. They do not hand out careers. They offer glimpses. And for those who have never been allowed one, that glimpse is the first line of a new story.

The Platform and the Mindset

There is a truth often misunderstood: opportunity provides a stage, not a script. A programme can open a door, but it cannot walk through it for you. I have seen this repeatedly. Two individuals attend the same visits, meet the same professionals, and sit in the same rooms. One listens with intent, takes notes, follows up, not to impress, but to understand. That small act leads to a conversation, which months later leads to an opportunity. The other attends but treats the experience as an item to be recorded. No follow-up. No curiosity. The opportunity was identical. The outcome was not.

The difference is never the programme. It is the mindset brought to it. The platform is neutral. It offers the space. What is built upon it belongs entirely to the individual. Exposure does not redraw your circumstances overnight. It redraws what you believe is possible, and from that shift, everything else begins to move.

On Visibility and the Modern Game

It is often said that platforms like LinkedIn are filled with noise, repetition, visibility, and small achievements amplified beyond their weight. There is some truth in that. But there is also a failure of perspective.

An achievement is an achievement, no matter how small it appears. What seems insignificant from the outside may represent something profound to the individual, a first exposure, a first recognition, a first step into a space they were never part of before. For those without networks, without connections, without inherited access, visibility is not vanity. It is a tool.

And in practical terms, someone is always watching. A trainee. An associate. A partner with five minutes to scroll. A single post can lead to a message, a conversation, a piece of guidance, and from that, an opportunity.

You can call it noise. Or you can recognise it as a fast-moving system of connection and choose to engage with it. The same logic applies to fellowship programmes. It is sometimes observed that the same individuals appear across multiple firm visits, reflected in similar photographs. At a glance, this seems repetitive. But it is not repetition for its own sake. It is continuity. It is how exposure compounds.

Confidence is not built in a single room. It is built by walking into the third, fourth, and fifth rooms and no longer feeling like an outsider. Repetition is not redundancy. It is the architecture of familiarity, and familiarity is the foundation of confidence.

The Seed and the Forest

A question is often raised: why do we not yet see greater diversity in the rooms we enter? It is a fair and necessary question. But we must distinguish between representation and access. Representation is what we see. Access is what determines who will be seen in the future. Fellowship programmes do not immediately change representation. What they do is expand access. They place individuals into spaces they may never otherwise have entered. They create the conditions for change, not instantly, but gradually.

A single moment of recognition, seeing someone who shares your background, your journey, or your starting point, can alter a person’s sense of belonging. That moment plants a seed. Years later, that individual may be the one sitting on the panel. And someone else will look up and see them. That is how change happens. Not in declarations, but in cycles. Not in a single season, but over time.

The Ripple of Imperfection

No programme is complete. Every initiative has its gaps. But those gaps are not endpoints; they are starting points for improvement. I have seen participants return years later to contribute what was missing when they themselves were involved. A programme that once offered only exposure evolves to include practical workshops, mentorship structures, or skills training, not because it was designed perfectly from the start, but because individuals chose to improve it.

If each person who passes through such a programme strengthens one aspect of it, the cumulative effect is significant. Change does not always come from large-scale reform. It often comes from individuals who remember what was missing and choose to provide it.

The Door and the Choice

We live in a world that is quick to dismiss what is imperfect. Fellowship programmes are not perfect. They do not guarantee results. They do not solve structural issues overnight. But they do something far more immediate: they open a door. For someone who has never seen that door open, even slightly, that moment matters. Opportunity is not a promise. It is a platform. It gives you somewhere to stand. What you build from there is your responsibility.

You can stand outside and critique the system, and you may be entirely right. Or you can step inside, understand it, and begin to shape your place within it.

The door is not always wide. But sometimes, it is open just enough.

That is the moment.

The platform is there.

The rest is yours!

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Introduction

As legal frameworks struggle to keep pace with rapid technological advancements and fluctuating geopolitical realities, cross-border professional collaboration has shifted from a luxury to an absolute necessity.

Looking back at a high-velocity sequence of international engagements across the Asia-Pacific region, the core lesson is clear: the future of commercial law lies in deep jurisdictional integration.

From data privacy panels to advanced international arbitration simulations, navigating these diverse frameworks directly informs our approach back home. For practitioners managing modern commercial portfolios, staying ahead requires an active presence on regional stages where transnational legal standards are being actively forged. Below is an overview of the key operational takeaways, structural dialogues, and professional milestones from these regional summits.

1. Bilateral Ties and AI Guardrails: Kuala Lumpur, Malaysia (August 2025)

The journey began with an appointment to represent the Hong Kong legal profession as an official delegate in the largest young lawyers' exchange mission in history, organised by The Law Society of Hong Kong. Participating in the Malaysia-Hong Kong Young Lawyers' Symposium at Wisma Badan Peguam, co-hosted by the Malaysian Bar, our panels focused heavily on market integration and structural risk management amid global economic "de-risking" trends. As corporate clients rapidly deploy artificial intelligence tools, a major point of discussion was the unique challenge of designing cross-border tech guardrails. Crucially, the forum highlighted the need to structure compliance models that function smoothly across both standard common law jurisdictions and specialised frameworks, such as Malaysia's dual-track Sharia legal platforms. Understanding these localised market nuances is vital for advising corporate entities as they expand their operations into the Southeast Asian corridor.

2. Evolving Regional Data Architectures: Tokyo, Japan (August 2025)

Shortly after, I travelled to Tokyo, Japan, to serve as a Guest Speaker for the LAWASIA Communications, Technology and Data Protection Committee. Speaking at Chuo University's Korakuen Campus for the specialised workshop "Data Protection Law on the Move in the Asia-Pacific Region," my presentation focused on the structural friction points in cross-border data portability. Co-sponsored by the Japan Federation of Bar Associations (JFBA) and the Institute of Comparative Law in Japan, this assembly brought together an international panel of jurists, compliance officers, and technology executives. The primary takeaway from the Tokyo summit was the critical need for robust, multi-jurisdictional compliance architectures. As multinational corporate groups face increasingly fractured, localised privacy statutes across Asia, legal advisors must move beyond rigid domestic regulatory interpretations to build fluid, adaptable privacy frameworks.

3. Building Regional Bridges: Ho Chi Minh City, Vietnam (September 2025)

In September, the focus shifted toward expanding corporate frameworks within emerging Southeast Asian markets at the AIJA (International Association of Young Lawyers) 3rd Asia Pacific Regional Meeting. The conference, themed "HCMC 2025 | Empowering Connections: Advancing Legal Excellence in Asia," served as a major node for bilateral professional alignment. As a delegate, I collaborated with an exceptional network of transnational attorneys and regional bodies, notably the Vietnam International Arbitration Centre (VIAC). Our working sessions mapped out emerging transaction protections, corporate sustainability compliance mandates, and the institutional practice infrastructures necessary to support foreign direct investment (FDI) within the ASEAN commercial bloc. The discussions emphasised that legal excellence in modern Asia requires active, relational bridges between rising international practitioners.

4. Advanced Institutional Rules & Simulation: SIAC Seoul Conference (October 28, 2025)

In late October, the focus turned sharply toward the mechanics of institutional commercial dispute resolution at the standalone SIAC Seoul Conference 2025. Hosted by the Singapore International Arbitration Centre at Andaz Seoul Gangnam, the conference was themed "All About SIAC Arbitration: Insights, Industries, and the Road Ahead for Korea."A critical practical component of this engagement was participating in the specialised SIAC-YSIAC Workshop, titled "From Strategy to Simulation: Using the New SIAC Rules and Mock EA with a PPO Application."This program offered an intensive technical exploration of emergency arbitrator pipelines and the procedural mechanics behind handling Preliminary Processing Order (PPO) applications. Gaining hands-on, simulated experience with these updated institutional rules is invaluable, as these mechanisms are essential for maintaining asset stability and protecting commercial interests during high-stakes cross-border disputes.

5. Transnational Dispute Architecture: Seoul ADR Festival (October 27–31, 2025)

Parallel to specific institutional platforms, broader macro legal trends and alternative dispute resolution (ADR) frameworks were evaluated across the week-long Seoul ADR Festival (SAF) 2025. Attending the flagship 14th Asia-Pacific ADR Conference—co-hosted by KCAB International, UNCITRAL, and the Ministry of Justice of the Republic of Korea—offered a high-level view of regional dispute dynamics. The cross-border dialogue is centred on the shifting landscapes of international commerce, treaty enforcement, and the ongoing harmonisation of ADR paths across East Asia. Engaging with international arbitrators and regional corporate counsel highlighted the growing reliance on alternative venues to resolve cross-border disputes outside traditional Court litigation.

Looking Forward

Synthesizing these global frameworks directly impacts how we evaluate tech compliance, handle complex commercial arbitrations, and protect cross-border data streams back home. Operating across these distinct jurisdictions throughout 2025 has reinforced the value of an international outlook in an increasingly interconnected legal market. I want to express my deepest gratitude to all the co-hosts, organisers, fellow delegates, and professional bodies who made these invaluable knowledge exchanges possible.

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