Hong Kong Remains Leading Business Hub for Overseas Companies
Director-General of Investment Promotion at InvestHK, Mike Rowse, (left) unveils the "2008 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong"
Hong Kong continues to be the top choice of location for overseas and Mainland of China companies to manage their regional businesses, according to annual survey jointly released by Invest Hong Kong and the Census and Statistics Department (C&SD).
According to the results of the "2008 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong" conducted by the C&SD, Hong Kong was host to 6,612 overseas and Mainland of China companies representing parent companies located outside Hong Kong, as at June 2, 2008. This represents an increase of 2.7 percent from 2007. According to the survey, 3,882 of these companies served as regional headquarters or offices.
Mike Rowse, Director-General of Investment Promotion at Invest Hong Kong, welcomed the results, saying that the figure of 6,612 companies was an all-time high. "This is a strong vote of confidence in Hong Kong's role as Asia's leading business hub," Mr. Rowse said.
Mr. Rowse cited two emerging trends which had strengthened Hong Kong's status as a regional and international hub: more multinationals upgrading their Hong Kong operations and more Mainland of China companies establishing local offices to capture business opportunities in the city.
Despite the survey's positive findings, Mr. Rowse commented that Invest Hong Kong would not become complacent. "The competition is getting stronger in the region, so investors have more choices," Mr. Rowse said. "Given the recent global financial difficulties and uncertain economic outlook, companies may delay overseas investments or even reduce the size of their operations. We therefore have to work even harder to attract and retain investors from all over the world."
According to the survey, as at June 2, 2008, there were 1,298 regional headquarters (RHQs), 2,584 regional offices (ROs) and 2,730 local offices (LOs) in Hong Kong representing their parent companies located outside Hong Kong.
The United States topped the list of countries/territories with RHQs in Hong Kong (311), followed by Japan (238), and the United Kingdom (119). The major lines of business of RHQs were wholesale, retail and import/export trades; business services (excluding information technology); and transport and related services. They employed some 142,000 persons in Hong Kong.
The United States also topped the list of countries/territories with ROs in Hong Kong (612), followed by Japan (494) and the United Kingdom (234). The major lines of business of ROs were wholesale, retail and import/export trades; business services (excluding information technology); and finance and banking. They employed some 97,000 persons in Hong Kong.
The Mainland of China topped the list of countries/territories with LOs in Hong Kong (499), followed by the United States (452) and Japan (440). The major lines of business of LOs were wholesale, retail and import/export trades; finance and banking; and business services (excluding information technology). They employed some 131,000 persons in Hong Kong.
Key favorable factors affecting the choice of Hong Kong as a location for RHQ/RO/LO (in descending order of favorableness rating) are:
(1) Simple tax system and low tax rate;
(2) Free flow of information;
(3) Absence of exchange controls;
(4) Corruption–free government;
(5) Communication, transport and other infrastructure;
(6) Free port status;
(7) Political stability and security;
(8) Geographical location;
(9) Rule of law and independent judiciary;
(10) Availability of business services and professional support services.
For the purpose of the survey, a regional headquarters (RH) is defined as an office that has managerial control over offices in the region.
A regional office (RO) is an office that coordinates offices and/or operations in the region.
A local office (LO) is an office that only takes charge of the business in Hong Kong on behalf of its parent company located outside Hong Kong.
"2008 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong": www.censtatd.gov.hk/products_and_services/products/publications/index.jsp
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