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Socio-economic Systems - Part 4
Judicial System
The
Joint Declaration and the Basic Law stipulate the setting up of a Court of
Final Appeal (CFA) in Hong Kong to replace the Judicial Committee of the
Privy Council as Hong Kong's highest appellate court after July 1, 1997.
The CFA is headed by the Chief Justice and comprises three permanent
judges, a panel of 8 non-permanent Hong Kong judges and 9 non-permanent
judges from other common law jurisdictions. In hearing and determining an
appeal, the Court will consist of 5 judges, and the Court may, as required,
invite a non-permanent Hong Kong judge or a non-permanent judge from
another common law jurisdiction to sit on the Court.
The establishment of the
CFA, a HK-based final appeal court at the apex of Hong
Kong's judicial system, together with the preservation of the common
law system, safeguard the rule of law in Hong Kong.
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§
Entry
and Practice of Foreign Law Firms in Hong Kong
Hong Kong is an
international business and financial centre. There is a practical need to
have legal service offered by foreign law firms to be available to local
and foreign clients on international legal matters. Being a member of WTO,
Hong Kong is also required to provide a more open market for legal services
on a non-discriminatory basis. Against this background, the Law Society of
Hong Kong has liberalized its rules in respect of the acceptance of foreign
lawyers and law firms to practice in Hong Kong.
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Law and Order
Hong Kong is one of
the safest cities in the world. In 2004, the overall crime rate (1,181.5
cases per 100,000 population) and the violent crime rate (201.8 cases per
100,000 population), decreased by 9.1% and 5.6% respectively as compared
with 2003, and the overall crime detection rate was 43.6%.
As at Oct 2005, the Hong Kong Police Force has a strength of some
27,400 police officers and 5,000 civilian staff, and is supported by some
4,500 auxiliary police officers. The Hong Kong Police Force is one of the
best equipped and trained in the world.
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Property Market
The Government's
policy is to allow the private residential property market to operate as
freely as possible. Our policy objective is to provide sufficient land to
meet our long term housing production and to achieve stability in the
private property market.
The sales market for
residential property remained sluggish during most of the first five months
of 2005, manifested by a surge in flat prices and trading activities. In
April 2005, process and transaction volume of residential property rose to
5-year high and 7.5-year high respectively. Market sentiment was
underpinned by the sanguine economic outlook, improving employment
situation, and still low interest rate environment prevailing then.
Meanwhile, the leasing market continued to fare well, albeit at a steadier
pace, reflecting sustained improvement in leasing demand.
On non-residential properties, the sales market for office space
strengthened along with the economic upturn in the first half of 2005, but
cooled off in recent months under the impact of higher interest rate.
Prices nevertheless held up quite well as vendors stood firm in view of the
positive market fundamentals. In the third quarter of 2005, prices of
office space on average rose by 3%, although this was moderated from the
20% increase in the first half of the year. The leasing market for office
space improved progressively throughout the first three quarters of 2005,
underpinned by buoyant cooperate demand especially for quality office in
prime locations. Rentals on average moved up by 9% in the third quarter,
following the 13% increase in the first half of 2005.
Social Welfare System
Hong Kong is not a welfare
state but it is a caring community. The Social Welfare Department is
responsible for implementing social welfare policies in Hong Kong. The
Comprehensive Social Security Assistance (CSSA) Scheme and the Social
Security Allowance (SSA) Scheme form the mainstay of Hong Kong's social
security system. They are supplemented by three accident compensation
schemes: the Criminal and Law Enforcement Injuries Compensation Scheme, the
Traffic Accident Victims Assistance Scheme and Emergency Relief.
The CSSA Scheme is non-contributory but means-tested. It aims at
providing cash assistance to people suffering from financial hardship to
meet essential needs of livelihood. Applicants must satisfy the residence
requirement. Employable CSSA applicants are expected to seek work actively
by joining the Support for Self-reliance (SFS) Scheme. CSSA payments can be
broadly classified into three categories: standard rates; supplements and
special grants. Elderly CSSA recipients who have received CSSA continuously
for three years are allowed to continue to receive their monthly standard
rate and annual long-term supplement if they choose to retire to Guangdong
Province.
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Taxation
- Taxation in Hong Kong The 5 major attractions
of Hong Kong's tax system to foreign investors and businessmen are -
o
The
low rate of tax on profits (17.5% for corporations and 16% for
non-corporate taxpayers);
o
Only
income and profits derived from Hong Kong are subject to tax - a company
pays no tax in the territory on income derived from outside Hong Kong.
Salaries tax is also only charged on Hong Kong sourced salaries;
o
No
tax on capital gain, dividends or interest
o
No
estate duty on estates or persons dying on or after 15 July 2005; and
o
The
generous capital allowance given to capital expenditure
Personal tax is also among the lowest in the world at 16% maximum;
and there is no sales tax.
- Double Taxation and Tax
Agreements Double taxation arises when two tax jurisdictions levy tax
on the same income. Double taxation can be resolved through bilateral
tax agreements which establish the taxing rights of the respective
countries.
Unlike
most countries which adopt the residence concept, Hong Kong's taxation
system works on the territorial source principle whereby only earnings
derived in Hong Kong are taxable. Thus, the problem of double taxation does
not generally exist for both Hong Kong and non-Hong Kong residents.
More on double taxation
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Telecommunications
Hong Kong is the
first major city in the world to have a fully digitalized telephone
network. The rate of telephone line penetration is amongst the highest in
the world. As at 2005, some 1.601.300 households, or 70.1% of all households in Hong
Kong, had PC at home. Among those households with PC at home, some 1,476,500 (92.2%) had their PC
connected to the Internet, representing 64.6% of all households in Hong
Kong. This represents a significant increase compared to the situation in
2004 when 67.5% of all households in Hong Kong had PC at home and 60.0% of all households had their
PC at home connected to the Internet.
In 2005, there were four
companies providing 3G services in the territory. 3G
is a new generation of wireless communication and it is broadband and
packet-based. It can be used to transmit text, digitised voice, video, and
multimedia data at rates up to 2Mbps in a fixed or stationary wireless
environment, and 384kbps in a mobile environment. 3G also offers a
consistent set of services to mobile users no matter where they are located
in the world. 3G is designed to fit a wide range of market-focused
applications.
As in May 2006, there are 187
Internet Service Providers in Hong Kong, and the household broadband
penetration in Hong Kong has reached 66.1% in March 2006, the second
highest in the world after South Korea.
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Transport Management and Services
Hong Kong is a highly
mobile city with about 11 million passenger trips made daily on an
efficient and safe multi-modal public transport system.
The major modes of public transport
in Hong Kong are franchised buses, railways, public light buses and taxis.
Railways provide fast, reliable and comfortable mass transportation and are
the backbones of our public transport system. The Kowloon-Canton Railway
connects new towns in the New Territories and provides railway linkage to
the Mainland. The Mass Transit Railway mainly serves the urban areas
on Hong Kong Island and Kowloon. Kowloon Motor Bus is believed to be
the world's largest private-owned bus company in terms of carrying
capacity. It has a licensed fleet of over 4,000 vehicles, carrying an
average of 2.77 million passengers everyday.
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