Swedish companies in Hong Kong continue to use the city as their regional headquarters and expect to maintain that role in the years ahead, as they remain confident about its economic outlook and competitiveness compared with other international cities, despite pressure from rising rents and labor costs, according to a survey released on Tuesday.
The Business Climate Survey 2026, jointly conducted in February by the Consulate General of Sweden to the Hong Kong Special Administrative Region, Business Sweden, and the Swedish Chamber of Commerce in Hong Kong, reflects the perspectives of 58 Swedish and Sweden-related companies across sectors including professional services, consumer goods, and industry.
Two thirds of firms use Hong Kong as their regional hub, and 91 percent said they plan to continue this setup for the foreseeable future or at least the next three years. Major hub functions include overall management, purchasing and sourcing.
The survey highlights a resilient financial performance among Swedish firms amid global headwinds. Overall, 85 percent of companies reported profitability or break-even results, a slight increase from 81 percent in 2025.
Despite global economic uncertainty and strains in supply chains and the international trading system, Swedish companies have demonstrated resilience and steady performance in Hong Kong, said Louise Bergholm, Sweden’s consul general to the SAR.
“In times of uncertainty, Hong Kong’s well-established economic infrastructure and efficiency as a regional hub have stood out as key strengths,” she added.
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Nearly half of respondents said Hong Kong is “more or much more” competitive than other international cities, compared with 36 percent last year.
For the fourth consecutive year, respondents ranked Hong Kong’s role as a gateway to and from the Chinese mainland as its biggest advantage. Other factors, such as the city’s free-market environment and overall business potential, have also gained importance.
Most companies use Hong Kong to cover at least part of the Guangdong-Hong Kong-Macao Greater Bay Area, the survey found. Access to customers, business partners and suppliers was seen as the main opportunity in the Greater Bay Area, while opportunities related to cross-border business and the availability of highly skilled professionals were viewed less favorably than in previous years.
“Swedish companies continue to rely on Hong Kong as a base for regional management and for engagement with the Greater Bay Area,” Bergholm said, adding that they have “greater clarity” regarding the opportunities the 11-city cluster presents.
Although concerns about Hong Kong’s economic outlook have halved to 17 percent in 2026, high rental and labor costs remain a major pain point. More than half of respondents ranked rental and property expenses among their top three challenges for the third straight year. Worries about labor costs nearly doubled to 34 percent, making it one of the fastest-growing pressures facing companies.
Swedish companies’ investment sentiment improved modestly. More than a quarter plan to increase their investment over the next 12 months, while 57 percent expect to keep investment levels unchanged.
