Alright, folks! “Money laundering” isn’t just some fancy term from spy movies; it could be happening right under your nose! First off, let’s be clear: “money laundering” is like taking a filthy undershirt and, using a bunch of “secret formulas,” washing it so white that everyone thinks it’s brand new. The “dirty money” comes from…

Introduction In the financial industry, especially for licensed corporations like securities firms, three numbers are particularly important – paid-up share capital, net asset value, and liquid capital. These three numbers are like the foundation, walls, and cash reserves of a house, all essential. Today, we’ll use simple language and examples to help everyone understand how…

1. From Private Kitchen to Multi-Family Office Imagine you come from a wealthy family that loves fine dining but doesn’t want to eat out in crowded restaurants all the time. You decide to bring in a top culinary team—say, the chefs from Da Dong (famous for Peking duck) or Li Family Cuisine (renowned for classic…

1. What Is the “334” Strategy? The so-called “334” strategy involves using a holding company to allocate shares roughly at 33%, 34%, and 33% among three or more investors, thereby preventing any single party from holding over 35% of the shares. This arrangement aims not only to avoid the need for a substantial shareholder approval…

Introduction Many investors mistakenly believe that by registering a holding company in places like the Cayman Islands or British Virgin Islands (BVI), and then having this holding company own a Hong Kong licensed corporation (commonly known as Type 1, 4, or 9 license), they can bypass the major shareholder approval process of the Hong Kong…

Preface In Hong Kong’s financial market, licensed corporations (commonly known as Type 1, Type 4, and Type 9 licenses) are often viewed as assets with “built-in credibility” due to strict regulation by the Securities and Futures Commission (SFC). However, the SFC also maintains rigorous scrutiny over shareholding structures and major shareholders’ qualifications. As a result,…

Preface Besides the “334” strategy, many other “clever” approaches circulate in the market that attempt to avoid SFC approval for major shareholders, such as splitting shareholdings into numerous small portions below 10%, or diluting actual control through multiple layers of offshore companies. This article will explore several common cases and explain how these methods are…

Insurance Rebates: Compliance vs. Boundary-Pushing, Complete Guide I. Background and Limitations of Rebates In Hong Kong, regarding long-term insurance products (e.g., life insurance, savings with dividends, investment-linked insurance), the Insurance Authority (IA) has clear guidelines (e.g., GL25 – Guideline on Offering of Gifts) prohibiting unrecorded or under-the-table “money-giving” rebates. II. Common “Compliant Practices”: Transparent Approaches…

Insurance brokerage firms can legally give “rebates” to clients as long as they follow the law and regulatory requirements. The most important thing is to ensure the process is transparent, documented, and not done secretly. Here are three main approaches: 1. Using the Client’s Close Friends or Family as “Referrers” 2. Formally Documenting “Rebate” Terms…

In the insurance industry, especially in markets like Hong Kong and the U.S., two practices often spark debate: rebating and the involvement of unlicensed third parties. Rebating happens when brokers or agents offer customers a portion of the premium or commission as an incentive to buy insurance. Meanwhile, unlicensed third parties are people without proper…