Hong Kong Investment Advantages
HK Corporate Formation Service/HongKong Investment Guide
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Hong Kong investment advantages attract plenty of foreigners come here each year. Hong Kong is a hot choice for global investors that wish to invest in China. Generally speaking, foreign investment plays a key role in the Hong Kong economy. Various sources of foreign investment like China, Japan, United States, Europe Union or United Kingdom etc., both of them have substantial amounts to investment in Hong Kong. There is no industries closed to foreign investment in Hong Kong. On the other hand, it is not only permitted but 100% foreign investment is very popular. Hong Kong has attracted more multinational corporations to incorporate their regional headquarters and offices in Hong Kong than any other cities in the Asia-Pacific region.
1.Hong Kong Economic Environment
According to the “World Investment Report 2008” released by the United Nations Conference on Trade and Development (UNCTAD), Hong Kong was the second largest FDI recipient in Asia after the mainland of China.
Hong Kong was the world's seventh and Asia's second largest FDI recipient, attracting US$54.4 billion inward investment in 2007. Hong Kong was also ranked Number 1 globally in the report's Inward FDI Performance Index, which measures the amount of FDI relative to the size of the economy.
Like trade, Hong Kong and the Mainland are key to one another's success. Hong Kong is the largest investor in the Mainland, and Mainland investment in Hong Kong amounts to some 2,000 enterprises and over 25% of the total stock.
2.Hong Kong Business Environment and Culture
Hong Kong prides itself in the "little government, big market" approach, where the comparatively light hand of regulatory bodies ensures Hong Kong remains of world-class standard while providing the pro-business framework that creates a just and level playing field. The government lives by the mantra "emarket leads, government facilitate".
With the natural assets, the primary economic sector is negligible in terms of contribution to GDP and employment. In the last 20 or so years, GDP constituents have changed from 69% services and 30% manufacturing to 90% services and around 10% manufacturing. This testifies to Hong Kong and its inhabitants are being widely renowned for their ability to adapt and reinvent. Now that manufacturing has largely moved over the border to the Mainland, Hong Kong is embracing its role of manager, financier, marketer, logistics organizer, and trader and in tourism, the key industries which now comprises the majority of GDP and employment.
That said, the manufacturing that excels in Hong Kong today tends to be of a high end nature and the whole sector enjoys the support of the Federation of Hong Kong Industries.
3.Hong Kong Investment Advantages
a)Hong Kong is the Gateway to Mainland China
The fast growing of China market, especially after China access into WTO and the continuing of reduction in administrative barriers of trade. For the foreign investors, it is most attractive place in the world. Given the geographic proximity and business synergies between Hong Kong and mainland China, most foreign companies find its advantages. A common action of the investors is choosing Hong Kong as the base and service platform before investment in China. What makes Hong Kong an even easier route into and out of China recently is the mainland China Hong Kong, Closer Economic Partnership Arrangement (CEPA) of June 2003. Started on 1 January 2004, grants easier access to mainland markets for Hong Kong-made products and Hong Kong-based companies in various sectors. The measures in CEPA are above and beyond China's WTO commitments, which phase in tariff cuts and market liberalization measures in their entirety three to six years after WTO accession.
An overseas manufacturer is not required to establish itself, presence in Hong Kong and take advantage of CEPA, but must enter into a joint venture with, or outsource production to a Hong Kong manufacturer. An overseas service company may also be eligible for CEPA benefits one year after its merging with, or acquisition of at least 50% of Hong Kong service supplier. CEPA will be strengthening, the appeal to foreign companies of Hong Kong's position as a service hub and global platform for China business, and encourage the foreign investment in Hong Kong.
b)Hong Kong Investment Advantage of Current Economy
The economy is robust enough to have weathered the economic shockwaves and recover to new heights. Over the past two decades, the Hong Kong economy has more than doubled in size with GDP growing at an average annual rate of 5% in real terms.
Since land supply is tightly controlled, the property market is often regarded as an indicator of the economy's health. With increases on the horizon, this is a widely regarded as an economic positive. Unemployment has stabilized at around 5% and the composite price index is now hovering around positive.
c)Hong Kong Investment Advantage of Trade Enviornment
Trade in goods and services expanded by around eight times and three times respectively in the last 20 years. Looking at the total value of the trade of goods and services, it amounts to more than 300% of GDP!
In approximate terms, Hong Kong's total trade comprises roughly half imports and half exports, of the latter, re-exports form the lion's share. Key markets for Hong Kong are the US and the Mainland.
Since the economic reforms introduced by the Mainland in 1978, business between Hong Kong and the Mainland has increased significantly, with Hong Kong handling more than 20% of the Mainland's foreign trade.
There are various bodies such as the Hong Kong Trade Development Council and Hong Kong Productivity Council that help Hong Kong businesses trade and stay competitive in the world market. The Hong Kong General Chamber of Commerce also plays a key role in this. It is one of the largest voluntary chambers in the world.
d)Hong Kong Investment Advantage of Government Attitude
The Hong Kong government upholds free and open market policy which generally applies to all trade and investment, with few restrictions on foreign investment. Whilst there are no specially enacted incentives for foreign investment, all foreign companies benefit from the government's policy of providing an appealing climate for investment through its physical infrastructure including good communications, efficient port and airport facilities, its simple tax structure with low rates of tax, and its legal and administrative system. It promotes fair competition and does not discriminate between foreign and domestic investors.
In terms of international recognition, Hong Kong is consistently described as the world's freest economy by highly reputed international institutions such as the Heritage Foundation and the Fraser Institute. For example, Hong Kong has been ranked the freest economy in the world for the 10th consecutive year in the Heritage Foundation's 2004 Index of Economic Freedom.
e)Hong Kong Investment Trade advantages
1 Hongkong is the freest trading port for triangular trade worldwide,also owning the world-class infrastructure and completed law system.
2 Hongkong has one of the lowest tax environment in the world.So it is very easy for you enjoying the tax holidays from the current tax system.
3 Under the guidance of "One System, Two Policies",Hongkong enjoys many benefits from the mainland.
4 Flanking the mouth of the Pearl River Delta (PRD), Hong Kong is a perfectly choice for trading with Mainland China.
5 The transportation in Hongkong is also very convenient for your trading.
6 Over 40 international schools and Several Hong Kong universities are offering many opportunities for the development of Hongkong.
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