Efficiency 2015 Annual Report

Living in the Business Rhythm of Hong Kong

In 2015, reclaiming newly targeted regions and striving to stay close to clients, the holding company ABLV Consulting Services established its representative office in Hong Kong. Dmitrijs Semjonovs, Head of Representative Office in Hong Kong, shares his reflections on the outlook for working in this region.

The first steps are the most difficult

Hong Kong has an informal motto which says that Hong Kong is the global city of Asia. Hong Kong is the place where western efficiency and goal orientation harmoniously blend with Eastern insistence and respect for details, while English remains the language of business communication. There are so many business opportunities in Hong Kong — one only has to work and results will follow. The main goal of the rep office is to inform potential and existing clients about the financial, investment and advisory services that ABLV group offers. It is interesting to note that these services are mainly tailored to clients from Russia and CIS countries who register companies in Hong Kong in order to grow their businesses.

Attractive business environment

Hong Kong is not only the financial centre of Asia, but also a thoroughfare that brings business people to China (here the so-called principle of one country with two systems works). Nobody knows what will happen in 2047 when Hong Kong falls completely under Chinese control. However, I am sure we can use the advantage of this time gap to make a huge leap in this region. The bank management’s plans are long-sighted and pragmatic; they correspond to the realities of geopolitics and geoeconomics.    

Nowadays, there are one and a half million companies registered in Hong Kong. In the context of taxation and international business, Hong Kong is a convenient jurisdiction where one can play by transparent rules. The taxation system is clear, loyal and simple. Certainly, our clients also use this jurisdiction for their businesses — a lot of them travel to Hong Kong on business and for leisure. Some use Hong Kong as a transportation hub; some consider Hong Kong a domicile.  

More than that, at the beginning of 2016, the abolition of dual taxation between Hong Kong and Russia came into effect. It allows Russian companies to take advantage of Hong Kong’s jurisdiction while working in the Asia-Pacific markets. In April, a similar agreement was signed between Hong Kong and Latvia.

The dynamic business environment of Hong Kong has attracted a vast number of companies that specialise in delivering corporate services to our potential clients. Now, having become a member of this environment, step by step we are turning into an active participant in the financial advisory market.

At the beginning of 2016, the abolition of dual taxation between Hong Kong and Russia came into effect; in April, the same agreement was signed between Hong Kong and Latvia.

“Latvia? Never heard of it, but it sounds interesting…”

While we are promoting the services of ABLV group in both the West and the East, Latvia also gets its recognition as a country in these regions. Few people know about us in Asia, therefore I always have something to tell them about Latvia. For example, Latvia was acknowledged as being the second greenest country in the world. We unite Europe and Asia. In 2015, Latvia’s GDP index was one of the highest in Europe. The first ever publicly displayed Christmas tree was also in Latvia. Latvia is famous for its pharmaceuticals, world-famous music bands, Olympic champions, and its potential in logistics, IT, start-ups and the financial sector. Having learnt some more about Latvia, the inhabitants of the mainland tend to think of Latvia as of an attractive place for investment and temporary residence, as they consider Latvia to be safe, economically stable and environmentally healthy.

The specifics of development

Some businesspeople delude themselves when they think that they may sell to China no matter what — the business environment in China is not that simple. I am convinced that the trading route to China is better through Hong Kong. In 2003, the Closer Economic Partnership Arrangement was concluded between Hong Kong and the mainland, and now ensures easier access to the mainland market through Hong Kong. This agreement is open to all members; therefore, its geography is expanding and every year new parties join. Being located in Hong Kong, it is easier to find distributors, business partners and necessary contacts to do business in China. According to World Bank data, Hong Kong ranks third place when it comes to convenience in doing business, whereas China takes only 90th place. This rating illustrates pretty well the potential obstacles to starting a business in China.

The One Belt, One Road programme is another interesting issue to discuss. It is a new global initiative from mainland China, launched in 2013. This mega project unites two programmes: The Silk Road Economic Belt and the 21st-century Maritime Silk Road. As envisioned by China, this initiative will influence 65 countries from both Asia and Europe, including the Baltic States. This project is powerful enough to change the political and economic landscape of the world. The General Secretary of the Communist Party of China, Xi Jinping, predicts the volume of business in this economic initiative will reach USD 2.5 billion within 10 years.

I am convinced that ABLV group, with its experience and understanding of doing business in Central Asia and Russia, can become a member of this initiative. Wherever trade exists, there is always a need for a reliable financial partner.

Table of Contents

Creative team: Arnis Artemovičs, Ernests Bernis, Jānis Bunte, Anna Celma, Ilmārs Jargans, Jekaterina Koļesina, Sergejs Mazurs, Samanta Priedīte, Jūlija Surikova, Romans Surnačovs
Project managers: Anna Celma, Jūlija Surikova
Interviews: Jānis Bunte, Ingrīda Drazdovska, Konstantīns Gaivoronskis, Katrina Gordejeva, Ilmārs Jargans, Jekaterina Koļesina, Sergejs Mazurs, Romāns Meļņiks, Sergejs Pavlovs, Romans Surnačovs, Jānis Šķupelis
Text authors: Leonīds Aļšanskis, Jānis Bunte, Anna Celma, Vladislavs Hveckovičs, Jānis Grīnbergs, Māris Kannenieks, Ļubova Kazačenoka, Jekaterina Koļesina, Zane Kurzemniece, Aleksandrs Pāže, Gints Pumpurs, Dmitrijs Semjonovs, Jūlija Surikova, Kaspars Vanags, Benoit Wtterwulghe
Photography: Arnis Artemovičs, Uldis Bertāns, Mārtiņš Cīrulis, Ieva Čīka, Krišjānis Eihmanis, Andrejs Hroneloks, Alise Jastremska, Valdis Kauliņš, Valts Kleins, Marks Litvjakovs, Sergejs Mazurs, Reinis Oliņš, Samanta Priedīte, Gatis Rozenfelds, Polina Viljun, LETA foto, Marka.photo, Studija F64
Proofreader: Jānis Frišvalds
Translators: Jekaterina Koļesina, Nataļja Malašonoka, Lidija Marsova, Jūlija Surikova
Design: Aivis Lizums, Valters Horsts

All rights protected by the Copyright Law of the Republic of Latvia.
Reproduction is prohibited without the consent of ABLV Bank, AS.