Recent Mainland regulation changes on private loans and personal bankruptcy may affect Hong Kong companies doing business across the border.
With the aim of making it easier for small businesses and individuals to access loans, China's Supreme Court has reduced the maximum interest rate to effectively 15%, significantly down from the previous cap of 24%. This would lower margins for private lenders. It could possibly lead to credit being issued to certain borrowers at a rate that does not reflect the risk.
In the meantime, Shenzhen's personal bankruptcy regulations, the first in China, will come into effect on 1 March, 2021. During the three-year observation period, bankrupt debtors will not be banned from taking flights and high-speed trains, or from checking in to hotels. There has been some concerns that debtors might use this provision to evade debts, leaving the creditors with huge losses.
To better understand the new regulations, the Chamber is delighted to have Bernard Lam and Wilson Yan from Gold Partners Holdings Limited share their thoughts on the subject at a 4 November webinar. They will discuss the impact of these changes on Hong Kong enterprises through practical case studies.
- Details of China's private-lending rate cap
- Introduction to personal bankruptcy in China
- Introduction to personal bankruptcy in Hong Kong
- How Hong Kong enterprises can reduce the risks associated with the new regulations