Over the last four decades of reform and opening-up, Hong Kong and the Chinese mainland’s economies have increasingly become inextricably linked. Today, Hong Kong plays a vital role in investment both into and from the mainland to the rest of the world, making it the world’s third largest FDI recipient. For this and many other reasons, exciting business opportunities are being created in many spheres.
The Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development are two critical national economic development strategies which Invest Hong Kong leverages in our promotion to both the mainland and global business communities about the many new opportunities the city has to offer. Hong Kong, a highly dynamic city that serves as the perfect platform for companies expanding into the mainland and Asia Pacific, continues to attract a wide array of leading companies from around the globe, as is fully reflected in our latest annual surveys.
According to the 2018 Annual Survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong, there are 8,754 companies in the city with parent companies located outside Hong Kong, representing a robust 6.4 percent year-on-year growth. The top five sources of the parent companies are the Chinese mainland, Japan, the United States, the United Kingdom and Singapore, and in businesses such as trading, wholesale and retail, financing and banking and professional, business and education services. The companies tell us that the favorable factors for setting up business in Hong Kong are the simple tax system and low tax rate, free flow of information, free port status and geographical location.
Hong Kong’s business appeal was also shown in our just-released “2018 Startup Survey”. Our startup ecosystem has skyrocketed in the last few years. The survey saw 2,625 startups operating in Hong Kong’s various co-work spaces, private or government incubators. This is an 18 percent year-on-year increase, while jobs created surged by 51 percent year-on-year. The startup community is also highly international in nature with 35 percent of founders coming from outside Hong Kong. The UK, US, the Chinese mainland and Australia are the top origins of non-local founders. They are engaged in businesses such as fintech, e-commerce, supply chain management, logistics technology, professional or consultancy services, information, computer and technology, etc.
Hong Kong’s business appeal was also shown in our just-released “2018 Startup Survey”. Our startup ecosystem has skyrocketed in the last few years. The survey saw 2,625 startups operating in Hong Kong’s various co-work spaces, private or government incubators. This is an 18 percent year-on-year increase, whilst jobs created surged by 51 percent year-on-year
The continuous rise in the numbers of foreign companies and startups are testament to the enduring business advantages of Hong Kong where companies tap into opportunities in Hong Kong, across the Chinese mainland and Asia.
Hong Kong, of course, enjoys an enviable and strategic location at the very heart of Asia. The city is connected to half of the world’s population within five hours of flying time, and direct flights to cities across the region and around the world allow business to be done efficiently.
Under the “one country, two systems” principle, Hong Kong retains its common law system and independent judiciary, providing effective legal protection to individuals and businesses. Hong Kong’s advanced infrastructure includes world-class transport networks and as a communications hub in the Asia-Pacific region with a well-developed information and communications infrastructure. On top of this, the city offers a pool of highly educated and multi-lingual professional talents with both mainland and international business know-how and expertise, supplemented by several admission schemes for attracting talents, entrepreneurs and professionals.
And as one of the world’s top three financial centers, Hong Kong is a strategic platform for fundraising and financial and professional services that companies from the Chinese mainland and other parts of the world tap into for their regional operations and more and more in pursuit of projects along the Belt and Road.
Interest in setting up and growing businesses in Hong Kong has been further spurred on by a series of new measures which have enhanced further the already business-friendly environment. These include a two-tiered tax system with the tax rate for the first HK$2 million of profits of corporations lowered to 8.25 percent, and thereafter at 16.5 percent. Furthermore, a comprehensive package of measures to attract leading innovative businesses has been rolled out, including tax measures to support and encourage research and development activities.
The Bay Area development is creating many new opportunities for both B2C and B2B businesses in serving the population of close to 70 million people as well as the vibrant and innovative companies based in the Area.
It’s an exciting time in Hong Kong for businesses from around the world. We are confident the city will continue to attract world-class companies and startups as ever more companies leverage the Belt and Road Initiative and Bay Area development.
This is good for businesses. It’s also good for Hong Kong to create new job opportunities and a more diversified economy.
The author is the director-general of Invest Hong Kong, the government department responsible for attracting and retaining foreign direct investment.
HONG KONG NEWS