Strategically located for business in Asia
Hong Kong is ideally located for growing companies that want to do business with Mainland China and Asia. It provides excellent transport connections. Hong Kong is strategically located at the heart of Asia, alongside many of the region’s most exciting business markets.
- Beijing, Shanghai, Singapore, Taipei, Manila, Kuala Lumpur and Perth are in the same time zone as Hong Kong.
- Bangkok, Jakarta, Seoul and Tokyo are within one hour’s difference.
- Easy and efficient regional travel is key to Hong Kong’s success as a regional business hub.
- 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 connect Hong Kong with the rest of the world.
Hong Kong offers easy access – commercially and geographically – to Mainland China business opportunities. The Pearl River Delta (PRD) region is immediately to the north of Hong Kong and business people commute regularly and easily between the two.
The PRD, or what is now called Guangdong-Hong Kong-Macau Bay Area, is home to tens of thousands of factories owned or managed by Hong Kong and overseas companies. As a result of its manufacturing success, the major cities of the PRD – Shenzhen, Guangzhou and Dongguan – are now among the wealthiest in China and have become strong markets for consumer goods and business services in their own right.
From Hong Kong to Guangzhou and beyondEnsuring the smooth flow of people and cargo between Hong Kong and Mainland China is essential to business success. Guangzhou-Shenzhen-Hong Kong Express Rail Link provide convenient transport from Hong Kong to Guangzhou and beyond:
- The rail link from Hong Kong to Guangzhou covered 142 kilometres in 48 minutes.
- It linked into existing train services on the Mainland, connecting Hong Kong still further with other major cities in southern China and beyond.
- Wuhan is accessible in five hours and Shanghai in eight hours, city centre to city centre.
With all of Asia’s key markets less than four hours’ away, it is easy to see why over 8,000 businesses and companies have made Hong Kong their home. Many have placed their strategic functions, including sales, operations, research and development (R&D), distribution, regional headquarters and corporate treasury centres in the city. Over 100 airlines offer easy and efficient travel to 190 locations from Hong Kong whilst half of the world’s population can be reached within five hours by plane.
The Guangdong- Hong Kong-Macao Bay Area (The Greater Bay Area)The Guangdong-Hong Kong- Macao Bay Area comprises Hong Kong and Macao plus nine cities in Guangdong, with a combined urban population of 71 million and GDP of about US$ 1.6 trillion.
HKSARG signed the Framework Agreement on Deepening Guangdong-Hong Kong-Macao Co-operation in the Development of the Bay Area with National Development and Reform Commission as well as Guangdong and Macao authorities on 1 July 2017. Key co-operation areas established include promoting infrastructure connectivity, enhancing the level of market integration, building a global technology and innovation hub, building a system of modern industries through co-ordinated development, jointly building a quality living circle to provide an ideal place for living, working and travelling, cultivating new strengths in international co-operation, and supporting the establishment of major co-operation platforms. More information about Guangdong‐Hong Kong‐Macao Bay Area Development can be found here
Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures makes it easier for businesses and companies to operate.
Trade and Economic TiesTo secure favourable conditions for exports of goods and services from Hong Kong to the Mainland and international markets, Hong Kong government endeavours to enter into more Free Trade Agreements with the trading partners. The Economic and Trade Offices (ETOs) set up by the HKSAR Government in Mainland China and overseas will further promote economic ties and exchanges with Belt and Road countries.
So far, Hong Kong has forged eight Free Trade Agreements, respectively with the Mainland of China, New Zealand, the Member States of the European Free Trade Association (EFTA), Chile, Macao, the Association of Southeast Asia Nations (ASEAN), Georgia and Australia. It has also concluded FTA negotiation with Maldives.
Low, Simple and Competitive Tax SystemBusinesses and individuals in Hong Kong enjoy one of the most tax-friendly systems in the world. Only three direct taxes are imposed and there are generous allowances and deductions which can reduce your taxable amounts.
The three taxes are:
- Profits tax for the first HK$2 million of profits of corporations is 8.25 percent. Profits above that amount will be subject to the tax rate of 16.5 percent. For unincorporated business (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 percent and 15 percent.
- Salaries tax with standard rate of 15 percent.
- Property tax of 15 percent.
Here are the taxes which Hong Kong does not impose:
- No sales tax or VAT
- No withholding tax
- No capital gains tax
- No tax on dividends
- No estate tax
Hong Kong has long been the region’s leading financial hub. It offers a highly transparent and robust regulatory regime for financial services industries such as banking, securities and futures, insurance and retirement schemes. These industries adhere to the best global practices and standards, giving confidence to everyone looking to do business in Hong Kong.
The city is also home to the world’s largest offshore hub in Renminbi settlement. Businesses can easily enjoy a wide variety of Renminbi services on offer from banks and financial institutions.
Stock Connect and Bond Connect have launched in Hong Kong. They have given investors in Hong Kong direct access to Mainland China whilst further cementing the city’s status as an international financial centre. The city is also positioning itself as a leading regional FinTech hub
An Innovation and Technology HubPromoting eight major areas: increasing resources for R&D, pooling technology talent, providing investment funding and I&T infrastructure, reviewing existing legislation and regulations, opening up government data, leading changes to procurement arrangements, and popularising science education. Over HK$100 billion has been committed for different initiatives in these eight areas.
300 percent tax deduction for private enterprises on the first HK$2 million of qualified R&D expenditure, with additional expenditure attracting a 200 percent deduction.
Double the Gross Domestic Expenditure on R&D as a percentage of the GDP to about HK$45 billion a year (i.e. to 1.5 percent) in the next five years. Establish two research clusters on healthcare technologies and on A.I. and robotics technologies. Implement HK$2 billion re-industrialisation funding scheme to subsidise manufacturers, on a matching basis, to set up smart production lines in Hong Kong
Supporting Startup and SMEsThe startup ecosystem in Hong Kong has been flourishing in recent years. Innovation and technology (I&T) is an important growth engine for future economic development. The Government has been supporting startups through various channels and measures, including strengthening the support of Cyberport and the Hong Kong Science Park for their tenants and incubatees. For more information, please visit: www.startmeup.hk.
Cyberport Incubation ProgrammeCyberport Incubation Programme (CIP) supports entrepreneurs and startups with resources that aim to accelerate their growth. Incubatees can get up to $500,000 support over 24 months to jumpstart their business. They can participate in the programme on-site at Cyberport, or off-site at their own premises. For more information, please visit: www.cyberport.hk
Hong Kong Science & Technology ParksThe Hong Kong Science & Technology Parks have three incubation programmes for start-ups in the field of web and mobile technology, technology and biotechnology. The schemes provide subsidised office space, consultancy services, investment matching and financial aid packages. For more information, please visit: www.hkstp.org