Intercompany Recharge Agreement Template for Hong Kong

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Key Requirements PROMPT example:

Intercompany Recharge Agreement

"I need an Intercompany Recharge Agreement for our Hong Kong subsidiary to provide IT and administrative support services to our group companies in Asia Pacific, with special attention to transfer pricing compliance and data protection requirements."

Document background
The Intercompany Recharge Agreement is a crucial document for multinational companies operating in Hong Kong, used to formalize arrangements for sharing costs and services between related entities within a corporate group. It becomes necessary when one group entity provides services or incurs costs that benefit other group entities, requiring a formal mechanism for fair allocation and reimbursement. The agreement ensures compliance with Hong Kong's transfer pricing regulations, which require transactions between related parties to be conducted at arm's length. It typically includes detailed provisions for service definitions, calculation methodologies, documentation requirements, and tax considerations. This document is particularly important in Hong Kong given its status as a major international business hub and its increasing focus on transfer pricing compliance and documentation requirements.
Suggested Sections

1. Parties: Identification of the service provider and recipient companies, including registration details

2. Background: Context of the agreement, relationship between parties, and purpose of the recharge arrangement

3. Definitions and Interpretation: Key terms used in the agreement, including specific service categories and calculation methods

4. Scope of Services: Detailed description of services/costs subject to recharge

5. Calculation of Charges: Methodology for calculating recharge amounts, including markup if applicable

6. Payment Terms: Timing, currency, and method of payment, including invoicing requirements

7. Tax Matters: Treatment of VAT/GST, withholding tax, and other tax considerations

8. Record Keeping: Requirements for maintaining documentation to support transfer pricing compliance

9. Audit Rights: Rights to audit calculations and supporting documentation

10. Confidentiality: Protection of confidential information shared between parties

11. Term and Termination: Duration of agreement and circumstances for termination

12. Governing Law and Jurisdiction: Specification of Hong Kong law and jurisdiction

13. General Provisions: Standard boilerplate clauses including notices, amendments, and entire agreement

Optional Sections

1. Employee Provisions: Required when recharge involves seconded employees or allocation of employee costs

2. Intellectual Property: Needed when IP is used in providing services or generated during service provision

3. Data Protection: Required when personal data is processed or transferred between parties

4. Regulatory Compliance: Necessary for regulated entities or specific industry requirements

5. Service Levels: Optional section defining quality standards and performance metrics

6. Force Majeure: May be included to address unforeseen circumstances affecting service provision

7. Insurance: Required when specific insurance coverage needs to be maintained

8. Subcontracting: Needed if services may be subcontracted to other group entities

Suggested Schedules

1. Schedule 1 - Services Description: Detailed list and description of services/costs subject to recharge

2. Schedule 2 - Calculation Methodology: Detailed explanation of cost allocation and markup calculations

3. Schedule 3 - Transfer Pricing Documentation: Requirements for maintaining transfer pricing compliance

4. Schedule 4 - Service Levels: Specific performance metrics and quality standards if applicable

5. Schedule 5 - Contact Details: Key contacts for operational and administrative matters

6. Appendix A - Cost Categories: Breakdown of cost categories and allocation keys

7. Appendix B - Sample Invoice Format: Template for invoicing including required information

8. Appendix C - Regulatory Requirements: Specific regulatory obligations affecting the recharge arrangement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions
Relevant Industries

Financial Services

Technology

Manufacturing

Professional Services

Retail

Healthcare

Telecommunications

Real Estate

Energy

Transportation and Logistics

Consumer Goods

Media and Entertainment

Relevant Teams

Finance

Legal

Tax

Treasury

Compliance

Corporate Governance

Accounting

Internal Audit

Group Finance

Transfer Pricing

Relevant Roles

Chief Financial Officer

Financial Controller

Head of Tax

Transfer Pricing Manager

Group Financial Controller

Legal Counsel

Tax Director

Finance Manager

Compliance Officer

Treasury Manager

Group Accountant

Corporate Controller

Head of Legal

Finance Director

Company Secretary

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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