MPF and ORSO schemes to be removed from the list of non-reporting financial institutions in Hong Kong
MPF and ORSO schemes to be removed from the list
Hong Kong Tax Alert - Issue 18, October 2018
In December 2017, the OECD conducted an assessment of non-reporting financial institutions (“NRFIs”) in Hong Kong for CRS purposes. In particular, one of its conclusions was that MPF schemes, ORSO registered schemes, ORSO pooling agreements and approved pooled investment funds should not be treated as NRFIs.
To comply with the OECD’s requirements, the Hong Kong Government is expected to amend the CRS legislation to remove these schemes from the list of NRFIs. As a result, such schemes will likely become reporting financial institutions (“Reporting FIs”) and subject to automatic exchange of information (“AEOI”). MPF schemes and ORSO registered schemes should therefore start conducting due diligence procedures and collecting relevant member information for AEOI starting from 1 January 2020.
MPF and ORSO trustees and administrators should assess the potential implications of the AEOI regime on their schemes. This includes planning for potential system enhancements and operational procedures required for compliance with the CRS due diligence, reporting and other obligations. Trustees and administrators should also communicate with their scheme members about the potential impact to them (if any) and advise on future account opening processes.