Discover why Hong Kong is the ideal place to do business in Asia and not only
1. Strategic location for business in Asia
Hong Kong is ideally located for growing companies that want to do business with Mainland China and Asia. It enjoys peerless transport connections. In other words, easy and efficient regional travel is key to Hong Kong’s success as a regional centre.
- Over 100 airlines offer flights to about 180 locations
- All Asia’s key markets are less than four hours’ flight away
- Half the world’s population is within five hours’ flight time
- About 1,000 daily flights between Hong Kong and the rest of the world
2. Low and simple tax regime
Hong Kong has a simple, predictable and low tax system. The city only imposes three direct taxes, and filing taxes is straightforward. According to the 2015 Paying Taxes study of 189 economies, Hong Kong has one of the most tax-friendly economies in the world. Why? The city only imposes three direct taxes and has generous allowances and deductions which reduce your taxable amount.
- Profits tax is capped at 16.5 percent
- Salaries tax is a maximum of 15 percent
- Property tax is 15 percent
More important are the taxes that Hong Kong does not impose:
- No sales tax or VAT
- No withholding tax
- No capital gains tax
- No tax on dividends
- No estate tax
3. International, transparent and efficient
Hong Kong, Asia’s most popular city for international business, is a city that works. Its enduring appeal is built on political stability, the rule of law, free market principles, free flow of information, and English as the language of business.
3.1. One country, two systems
Since 1997, Hong Kong has been under Chinese sovereignty but it has a separate political and legal system, based on principles that are best summed up by its ‘One Country, Two Systems’ concept. This has helped it to retain all the fundamental strengths that underpin its success as an international business city, while enhancing its appeal with unrivalled access to opportunities in Mainland China. It has no foreign ownership restrictions plus English and Chinese as official languages, with English the usual language of business and contracts.
Additional Facts About Hong Kong
Current Economic Situation
- The world's freest economy (Hong-kong-economy-research.hktdc.com, 2016)
- The world's most services-oriented economy, with services sectors accounting for more than 90% of GDP
- The world’s second largest recipient of foreign direct investment (FDI), after Chinese mainland
- The world’s second largest source of FDI, after the US
Economic Relations with the Chinese Mainland
- The most important entrepôt for the Chinese mainland
- The largest foreign investment source of the Chinese mainland
- The key offshore capital-raising centre for Chinese enterprises
- The Chinese mainland as Hong Kong's largest source of external investment
Hong Kong as a Regional Centre
- A popular venue for hosting regional headquarters or representative offices
- A leading telecommunications hub for the Asia-Pacific region
- A premier offshore RMB centre
- The world's busiest airport for international cargoes
- One of the world's busiest container ports
- The second largest private equity centre in Asia
- The fourth largest stock market in Asia, the eighth largest in the world
- The third largest foreign exchange market in Asia, the fifth in the world
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Hong-kong-economy-research.hktdc.com, (2016) [Online]. 2016. Available from: http://hong-kong-economy-research.hktdc.com/business-news/article/HK-Eco... [Accessed: 2 March 2016].
Cheung, T. (2016) Why Hong Kong | English. [Online]. 2016. Investhk.gov.hk. Available from: http://www.investhk.gov.hk/why-hong-kong.html [Accessed: 2 March 2016].
Censtatd.gov.hk, (2016) Browse by Subject | Census and Statistics Department. [Online]. 2016. Available from: http://www.censtatd.gov.hk/hkstat/sub/bbs.jsp [Accessed: 2 March 2016].
Liana Khutsiyan, MSc in Applied Corporate Brand Management