Half of city law firms believe Cepa will help them: survey
Nearly half the law firms in Hong Kong are anticipating a pickup in business in the coming three to five years as a result of the Cepa free-trade deal, according to a survey, but current restrictions still hamper their mainland expansion.
The survey by the Trade Development Council and Law Society found 83 per cent of respondents had handled cross-border transactions.
Significantly, 45 per cent said prospects for such deals would be very good in the next three to five years with business from foreign investors on the mainland, Chinese companies going international as well as intellectual-property activities expected to grow.
'Foreign direct investments or merger and acquisition deals on the mainland are invariably transacted through Hong Kong, so Hong Kong legal services are required,' said Edward Cheung Wing-yui, vice-chairman of the society's mainland legal affairs committee.
However, the earlier and greater mainland market access offered to Hong Kong companies under the Closer Economic Partnership Arrangement has so far only benefited a handful of local law firms. To date, 65 representative offices have been set up throughout the mainland and just three or four Hong Kong companies have opted to form joint business associations with mainland law firms.
Part of the difficulty of operating on the mainland stems from Cepa requirements that Hong Kong law firms operate there for at least three years before qualifying to establish contract-based associations with mainland practices.
These associations are also restricted to the province the Hong Kong firm operates in.
The society is seeking to have these requirements relaxed under the upcoming third phase of Cepa, Mr Cheung said.
At the end of last year, Secretary for Justice Elsie Leung Oi-sie said the government would seek further Cepa concessions for Hong Kong lawyers wishing to practise on the mainland.
According to the survey, 57 to 58 per cent of the respondents point to the good business prospects of their overseas clients on the mainland in the next three to five years.
LAW IN THE CITY
How does HK rank as a centre for international legal services?
- HK is home to the largest proportion of international lawyers in Asia (40% in 2003).
- In 2004, six of the top 10 legal advisers in Asia's mergers and acquisitions deals had a significant presence in HK
Source: Law Society of Hong Kong