Hong Kong offers a wealth of advantages to businesses. As one of the world’s financial powerhouses, Hong Kong has independent executive, legislative and judiciary powers and is a popular choice for overseas companies wishing to set up regional offices or headquarters.
But what are the other reasons which make Hong Kong so attractive? Here are ten reasons why businesses choose to set up in Hong Kong.
Why Hong Kong is attractive for business
Hong Kong is the gateway to Asia’s fastest growing markets
Over half of the world’s population live in Asia and Hong Kong is uniquely positioned to offer access to this huge market. The territory operates as a gateway to the Asia Pacific region as well as to mainland China’s rapidly growing markets located at the mouth of the Pearl River Delta, a dynamic economic region which is home to some of China’s largest manufacturing companies and has been dubbed ‘the World’s factory’.
Hong Kong has excellent transport links
The Hong Kong-Zhuhai-Macao Bridge which connects Hong Kong to the major cities in the Pearl River Delta opened in 2018. This ultra-modern rail and road link is having a huge impact on the region and demonstrates how Hong Kong is continually looking to the future and investing to expand economic opportunities.
Another example is its involvement The Belt and Road Initiative (BRI), an ambitious project to link Hong Kong and Mainland China with countries across Asia, Europe and the Middle East. According to Daniel Lam, the Hong Kong Trade and Development Council’s Regional Director, Middle East and Africa, BRI ‘The BRI is set to reinvigorate the seamless flow of capital, goods and services between Asia and the rest of the world, by promoting further market integration and forging new ties among communities.’
Of course, these new transport links are new additions to Hong Kong’s already excellent international transport network. The territory’s modern international airport is the world’s busiest cargo gateway and Hong Kong port is one of the busiest and most efficient international container ports in the world.
Hong Kong has state-of-the-art infrastructure
Travelling within Hong Kong is also easy with its modern, reliable and efficient transport network which includes ferries, buses, trains and trams. Peter Burnett, Managing Director, Corporate and Institutional Banking and Corporate Finance, Greater China and North Asia at Standard Chartered has this to say: ‘The infrastructure in Hong Kong is amazing—from the airport to the MTR subway system to the port—it’s absolutely world class. Likewise, its financial system is very established. Plus, you have lawyers, consultants, banks, capital markets and a stock exchange within an easy-to-reach ecosystem. It’s very efficient.’
Hong Kong’s telecommunications network is equally efficient. Heavy investment in broadband and fibre optic networks means a reliable, high-speed internet connection is accessible wherever you are in the territory.
Hong Kong is a free economy
Hong Kong is currently second to Singapore in the Index of Economic Freedom, having recently ceded first place (by a whisker) where it sat for 23 consecutive years. The index ranks 186 countries on financial freedom, property rights, rule of law and trade.
It is easy to set up a business in Hong Kong
The World Bank’s Doing Business 2020 Report rates Hong Kong third in the world for ease of doing business (of 190 countries reviewed), rising from fourth place in 2019. It has consistently ranked in the top ten for over a decade. Of the ten indicators reviewed, Hong Kong ranks first in dealing with construction permits, second in paying taxes, third in getting electricity and fifth in starting a business.
Compared to other countries, setting up in Hong Kong is quick. easy and relatively inexpensive with government help available via the InvestHK website and other resources.
The Hong Kong government is business-friendly
Hong Kong’s self-proclaimed pro-business government is constantly trying to introduce and improve initiatives to support businesses in the Special Administrative Region (SAR). A whole host of business-friendly measures were introduced in the 2020-21 budget, some in response to Covid, including a reduction in profits tax, the waving of business registration fees and a number of grants and subsidies.
Hong Kong’s simple tax regime is also a big draw for many businesses with competitive corporate tax rates as well as no VAT, sales, withholding, estate, capital gains, or dividend-based taxes. Foreign-sourced income is not taxable in Hong Kong.
Foreigners can own businesses in Hong Kong
Non-Hong Kong nationals have the right to be the sole owner of a business in Hong Kong, which is not the case in certain Asian countries.
Hong Kong has strong, and improving, trade links
Hong Kong currently has eight Free Trade Agreements (FTAs) with Mainland China, New Zealand, the Member States of the European Free Trade Association (EFTA), Chile, Macao, the Association of Southeast Asia Nations (ASEAN), Australia and Georgia. It is working hard to establish new trading partners, particularly focussing on creating economic ties with Belt and Road countries.
Hong Kong has also signed Investment Promotion and Protection Agreements with 20 economies and has concluded negotiations with Bahrain, Mexico, Myanmar and the United Arab Emirates.
Hong Kong has a sound regulatory regime
As Asia Pacific’s leading financial hub Hong Kong has a long established and robust regulatory regime covering the financial services sector. This upholds the highest global standards and has created an environment which fosters confidence in businesses and individuals alike.
Hong Kong is a recruiter’s dream
Hong Kong’s talent pool is diverse, highly educated and multi-lingual. Many locals are trilingual, speaking English, Cantonese and Mandarin. It is easy to recruit excellent candidates from this skilled and knowledgeable workforce.
There is no denying that Hong Kong is a major player in the world of international business and that the government is committed to maintaining and expanding its position as an international trade hub. This dynamic business environment and a commitment to investing in the economic development of the Special Administrative Region will ensure that Hong Kong continues to see growth in the coming years.
Infinity provides corporate business solutions to businesses across Asia, including in Hong Kong. If you’re looking for a partner to meet your insurance, group pension or currency exchange requirements we’d love to hear from you.