Here are some impressive facts on Hong Kong and why it is important to be there:
Foreign Direct Investment (“FDI”)
- Hong Kong - Asia’s Second largest and the world’s 4th largest FDI recipient.
In 2009 Hong Kong attracted US$48.4 billion inward investment and continues to have the highest FDI stock in the region, enjoying a majority share of 37 percent, or US$912.2 billion in 2009. (World Investment Report 2010 – United Nations Conference on Trade & Development (UNCTAD)
Competitiveness
- Hong Kong - First in World Competitiveness Yearbook 2011
The survey benchmarked the 59 most important economies in the world according to 331 different competitiveness criteria including economic performance, government efficiency, business efficiency and infrastructure. (World Competitiveness Scoreboard 2011 – International Institute for Management Development (IMD)
- Hong Kong - Second lowest cost of doing business and business risk.
Hong Kong continues to have the best opacity in Asia Pacific and 2nd in the world behind Finland. Opacity measures high-frequency, low-impact risks which indicate poorly functioning governments and increased cost of doing business and business risk: corruption, legal system, efficiency, economic and enforcement policies, accounting standards and regulatory effectiveness. (Opacity Index – Milken Institute)
- Hong Kong - No. 1 in Asia and No. 3 worldwide in Global Innovation Index Report
Hong Kong bested Singapore in Asia and was ranked 3rd in the world, behind Iceland and Sweden in this survey that covered 132 economies, ranking them by patents filed, publication of scientific journals, research and development spending and how innovation supported social welfare, competitiveness and growth. (Global Innovation Index Report – INSEAD and the Confederation of Indian Industry)
- Hong Kong - 14th in the “Connectivity Scorecard 2010?
The Scorecard is a global Information and Communication Technology (“ICT”) index measuring 50 countries on their deployment of ICT Infrastructure and the extent to which governments, businesses and consumers make use of connectivity technologies to enhance social and economic prosperity. In 2010, Sweden took the top spot. (Connectivity Scorecard 2010 – London Business School and LECG)
- Hong Kong - Most competitive city in China
This report ranked a city’s overall competitiveness on the basis of its advantages in human resources, capital, science and technology, infrastructure, environment and governance. (Blue Book of Urban Competitiveness: Annual Report on Urban Competitiveness (No. 8) – The Chinese Academy of Social Sciences)(Chinese Only)
Tax & Finance
- Hong Kong - lowest tax misery in Asia Pacific and 3rd lowest in the world
Hong Kong has a low and simple tax regime, with a maximum 16.5% corporate income tax and maximum 15% salaries tax. (Forbes Tax Misery Index 2009)
- Hong Kong - 2nd in the world in terms of ease of access to capital.
122 countries were ranked in terms of financial infrastructures that support entrepreneurial activity by providing access to capital. (Capital Access Index 2008: Best Markets of Business Access to Capital – Milken Institute)
- Hong Kong - Asia’s top financial city and ranked 3rd in the world
Hong Kong is rapidly catching up to London and New York. With the leading position in Asia is confirmed by the Global Financial Centres Index which examines 5 underlying competitiveness areas, namely, people, business environment, infrastructure, market access and general competitiveness. (Global Financial Centres Index March 2010 – Z/Yen Group Ltd for the City of London)
- Hong Kong - 5th in Financial Development Report 2009
Hong Kong moved up three places to claim the 5th position out of 55 of the world’s leading economies and was judged as the best place in the world for “banking financial services” scoring top marks in three other areas, namely “taxes”, “equity market development” and “commercial access”. (The Financial Development Report 2009 – World Economic Forum)
Business-Environment
- Hong Kong - the world’s freest economy for 13 consecutive years
The annual peer review report uses 42 different criteria to measure a country’s degree of economic freedom in 5 broad areas: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally and regulation of credit, labor and business. (The Economic Freedom of the World Annual Report 2009 -Fraser Institute/Economic Freedom Network)
- Hong Kong - top in Index of Economic Freedom.
10 benchmarks gauge economic success of 183 countries around the world measuring economic freedoms – from property rights to entrepreneurship. (2011 Index of Economic Freedom – The Heritage Foundation and Wall Street Journal)
- Hong Kong - 2nd in the world for its openness to international trade.
Hong Kong’s successful economic development strategy was reflected by the Enabling Trade Index which measures market access, border administration, transport and communications infrastructure, and business environment. The report covered 125 economies worldwide. (The Global Enabling Trade Report 2010 – World Economic Forum)
- Hong Kong - World’s Second Best Country for Business
Hong Kong ranks #2 in the ‘Best Countries for Business’ ranking, reaffirming its regional dominance as a business friendly destination. The fifth annual ranking of the ‘Best Countries for Business’ by Forbes financial magazine placed Hong Kong in the second spot after Denmark and ahead of developed economies such as the US, UK, Australia, New Zealand, Canada, and Singapore. (Best Countries for Business – Forbes Financial Magazine)
Rule of Law
- Hong Kong - best judicial system in Asia.
1,537 corporate executives working in Asia were asked to rate the judicial systems in the countries where they reside on a range of variables - Hong Kong topped the vote with a score of 1.45 (0 = best system and 10 = worst system). (Political & Economic Risk Consultancy)
Taxes
- Hong Kong - 3rd lowest tax in the world
Hong Kong operates a low and simple tax system.
- Corporate tax - maximum 16.5%
- Income tax - maximum 15%
- No tax on Sales, Capital Gains or Dividends
- Hong Kong - best corporate governance in Asia
The survey ranked 11 Asian markets according to their corporate governance standards defined in terms of rules and practices, enforcement, political and regulatory environment, accounting and auditing standards and overall culture. (CG Watch 2007 – Asian Corporate Governance Association)
Business-Friendliness
- Hong Kong - 3rd in Ease of Doing Business 2010
Hong Kong commended for creating a one-stop shop to expedite the process for obtaining construction permits and easing business start-up and property transfer procedures further improving the ease of doing business for companies in the city. (The Ease of Doing Business Ranking 2010 – World Bank and International Finance Corporation)
Lifestyle
- Hong Kong - best in Asia Pacific for shopping, nightlife and vibrant city life
The survey was conducted across CNN English websites with more than 5,000 travellers globally responding. (Global Online Consumer Survey on Travel & Tourism – CNN International)
- Hong Kong - 5th in Global Cities Index ahead of Singapore
To measure globalization around the world and rank the ways in which cities are integrating with the rest of the world, cities were scored according to 25 metrics across five dimensions: business activity, human capital, information exchange, cultural experience and political engagement. (2010 Global Cities Index – Foreign Policy, A.T. Kearney and The Chicago Council on Global Affairs.)
But this truly impressive list goes on:
- Best location and transport links across Asia Pacific and internationally
Strategically located at the centre of Asia, all of the region’s key markets are within 4 hours flight and half the world’s population is within 5 hours flight time. Hong Kong International Airport (Skytrax: 5 Star) is the busiest in Asia Pacific with direct flights to over 155 international destinations. The journey time between city centre and airport takes 23 minutes on the Airport Express.
Gateway to Mainland China
Hong Kong’s proximity to and close and unique relationship with Mainland China has made it the gateway to Mainland China for business for more than 150 years. Hong Kong’s business influence across China is extensive and deep providing almost half of the Mainland’s inward investment, while the Mainland is the city’s largest trading partner.
Hong Kong and Pearl River Delta, a winning business strategy
Hong Kong is the key city on China’s southern coast and adjacent to China’s biggest and most productive manufacturing region – the Pearl River Delta, known as the factory of the world. Thousands of overseas companies involved in China trade have established beachheads in Hong Kong because of the city’s strategic location and international business environment.
It’s a win-win combination: Hong Kong provides the capital, management skills, technology, market knowledge, mature business infrastructure and access to international markets. Cities in the Pearl River Delta provide world-class, efficient manufacturing, access to the world’s third biggest economy -predicted to be the world’s second biggest economy in 2010 and the world’s biggest single market of 1.3 billion consumers.
To minimize their business risk, international firms tend to place their highest-value activities in Hong Kong including international corporate, management, procurement, distribution, finance, information and professional services.
Pearl River Delta, the fastest growing region of China
The Pearl River Delta is the main base for China’s low-cost manufacturing having developed into a manufacturing platform of global importance.
The Pearl River Delta accounts for 10 per cent of China’s gross domestic product and about 30 per cent of China’s exports. It is the world leader in the production of electronic goods, electrical products, electrical and electronic components, watches and clocks, toys, garments and textiles, plastic products and a range of other goods.
Pearl River Delta, about to become Asia Pacific’s ‘most vigorous’ economic area
Recognizing the importance of the Greater Pearl River Delta, the Chinese government has announced an ambitious 12 year plan to move the Pearl River Delta up the value chain and forge even closer links and co-operation with Hong Kong and Macau. The plan sets out how the region will transform to focus on innovation, encompassing high-end manufacturing and high-technology industries such as automotive, steel, petrochemical and shipbuilding as well as modern services and finance.
By 2020, 100 state laboratories for engineering innovation and research and development will be established and at least 10 China-based multinationals with annual sales of US$20 billion will be developed.
Closer Economic Partnership Arrangement
The Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA) is a free trade agreement which grants easier access to Mainland China markets for Hong Kong-made products and Hong Kong-based service companies.
Importantly, CEPA is non–nationality specific. As long as the company satisfies the CEPA criteria, the benefits apply.
Trade in goods
Duty-free export to Mainland China for Hong Kong-made products: Over 1,500 categories of “Made in Hong Kong” products may be exported to the Mainland tariff free, subject to certain criteria being met.
To claim the tariff preference, each consignment of goods exported to the Mainland must be accompanied by a Certificate of Hong Kong Origin – CEPA ("CO (CEPA)") - issued by the Trade & Industry Department, or by one of the five Government Approved Certification Organizations.
Trade in services
Easier market entry for Hong Kong-based service providers: CEPA currently covers 42 service sectors and reduces or removes geographical, financial and ownership restraints.
Any nationality company can apply if it:
- Is incorporated in Hong Kong,
- Has operated for 3 to 5 years (depending on the sector),
- Is liable to pay Hong Kong profits tax and
- Employs 50% of its staff locally.
Trade and investment facilitation
Hong Kong and Mainland China have agreed to co-operate in various areas to facilitate trade and investment including:
- Customs clearance facilitation,
- Quarantine and inspection of commodities, quality assurance and food safety,
- Co-operation of small and medium-sized enterprises (SMEs),
- Co-operation in Chinese medicine and medical products,
- Electronic commerce,
- Trade & Investment promotion,
- Transparency in laws and regulations,
- Protection of intellectual property and
- Co-operation on branding.
China: Your new frontier – we’re already there!