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4.5. PE Risk Grid for Foreign Entities Involved in Business Activities

The following grid depicts the potential PE risk under Hong Kong law based on a number of circumstances. The determination of whether or not a profit arises in or is derived from a trade, business or profession carried out in Hong Kong is largely a matter of facts and circumstances. Each individual situation must therefore be appraised individually.

Activity       Potential Risk
                   High Moderate Remote
Market Research Y
Solicitation   Y
Procurement    Y
Provision of Services   Y
Secondment of personnel   Y
Commissionaire and similar Y
Post-restructuring low-risk activity Y
Ownership, rental/operation of real estate Y
Force of Attraction No
Branch Profits Tax No