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These notes are issued for the information of taxpayers and their tax - page 13 / 68

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retained for permanent use as opposed to being for temporary stays. If the individual has a permanent home in both Sides concurrently, it is necessary to ascertain with which of the two Sides his personal and economic relations are closer. Regard will be had to his family and social relations; his occupations;

his political, from which

cultural and other activities; his place of business; and the place

he

administers

his

property,

etc.

The

circumstances

must

be

examined as a whole, but it is nevertheless obvious that considerations on the personal acts of the individual must receive special attention.

based

(II)

Resident company

26.

Where a company is incorporated in Hong Kong, or if incorporated

outside Hong Kong is normally managed or controlled in Hong Kong, it will be considered to be a resident of Hong Kong under paragraph 1(2)(iii) of Article 4. A company incorporated in Hong Kong includes a company that is incorporated as a legal entity in accordance with the Companies Ordinance

(Cap. 32) of Hong Kong.

27.

The concept of “normally managed or controlled in Hong Kong”, as

compared to that of “central management and control” established in common law, has a broader meaning as it does not require that both management and control be exercised in Hong Kong. “Management”, in this context, refers to management of daily business operations, or implementation of the decisions made by top management, etc. “Control”, on the other hand, refers to control of the whole business at the top level, including formulating the central policy of the business, making strategic policies of the company, choosing business financing, evaluating business performance, etc. The board of directors usually exercises “control”. In other words, if the business of the company is normally managed or controlled in Hong Kong, including the management of

its

daily

business

operations,

or

the

implementation

of the

decisions

made

by

top management, or the making of top-level policies, company will be considered to be a resident of

in Hong Kong, the

Hong

Kong.

The

“management” or “control” of a company may, of course, be conducted more than one place. However, so long as a company is normally managed

in or

controlled in Hong Kong, If the Hong Kong branch

it will be considered of an overseas bank

to be a resident of Hong Kong. is managed in Hong Kong, the

bank

will

be

regarded

as

a

resident

of

Hong

Kong.

The

Mainland,

however,

takes

the

view

that

in

deciding

whether

an

overseas

bank

is

“normally

managed

9

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