This booklet is designed to give background information to overseas businessmen looking at China and the Asian region, and how Hong Kong in particular can act as a base for corporate activity.
Hong Kong was very much in the news when, on 1 July 1997, sovereignty reverted back to the People’s Republic of China after 150 years as a British colony. As from that date it became the Hong Kong Special Administrative Region (SAR).
Since the early 1990s the Hong Kong economy has become inextricably linked to that of southern China. This has been a significant factor in the SAR’s continued prosperity. Even so, important as it is, Hong Kong remains also a centre for trade throughout the rest of Asia and for international companies doing business in the region.
Hong Kong has been long used by multinational companies as a regional base to manage their businesses in the Asia Pacific, particularly in the Chinese mainland. Based on a government survey in Hong Kong in June 2009, there were 3,580 regional operations of overseas companies in Hong Kong, an increase of 44% from a decade ago. Of these regional operations, 83% have operations related to mainland China. Nowadays, Hong Kong also provides an international gateway for mainland companies wishing to explore financing opportunities, within or outside Asia.
There are many reasons for this success, but probably the main reasons are as follows:
A stable government dedicated to the encouragement of free enterprise and opposed to regulation or intervention unless deemed absolutely essential.
A respected, independent, legal system based on transparent Anglo-Saxon principles.
A free press that is widely-owned, independent, and vocal.
A good blend of entrepreneurial skills and a stable, talented, adaptable and hard-working labour force.
A complete absence of foreign exchange controls and only minor import duties on a small number of items.
Very low levels of taxation by international non-tax haven standards.
No restrictions on foreign investment.
Superb communications and banking facilities.
A location at the geographical centre of Asia.
The willingness of its businessmen to diversify according to international market demand and react quickly to changing trends.
The complete range of high quality professional services available.