Hong Kong Focus
Hong Kong is Asia’s World City
No other city has ever quite succeeded in stealing the show from Hong Kong in the contest to win the much coveted title “Asia’s World City”. Lauded for its economic freedom, competitiveness, opportunity and ease of doing business, and for its role as an international financial centre and the key gateway to China, Hong Kong is truly one of a kind. Its countless accolades include being:
- Ranked 2nd in Asia and 5th globally in IMD World Competitiveness Yearbook 2020;
- Ranked 5th globally after Singapore for its competitiveness in the Global Financial Centres Index 2020;
- Voted 2nd ‘Best Business City in Asia’, and 3rd ‘Best City in the World’ in Business Traveller magazine 2020;
- Being consistently regarded as the world’s freest economy by the US-based Heritage Foundation in its annual Index of Economic Freedom.
Hong Kong’s continued success is attributed to its liberal economic policies of free enterprise and trade implemented within a transparent legal environment, where the rule of law is upheld and the best international commercial and financial practices are observed. This is also safeguarded by the unique “One Country Two Systems” institutional arrangement, which grants Hong Kong a high degree of autonomy.
With nearly 8,000 overseas and mainland Chinese companies having chosen Hong Kong as their home, the city provides the optimal conditions for businesses to thrive and prosper:
- A stable, low and straightforward tax system;
- Free flow of information and capital;
- Free trade and free market;
- Level-playing field for local and international businesses;
- No foreign exchange controls;
- English as the lingua franca of business;
- Independent and transparent legislature, executive and judiciary systems.
Hong Kong is not only home to multinational corporations and large-scale organisations, it is also a perfect launch pad for start-up businesses. The range of government-backed incubator and accelerator programmes available to start-ups is illustrative of Hong Kong’s desire to nurture novice entrepreneurs on the scene.
Hong Kong is the Global Super-Connector
The uniqueness of Hong Kong lies indeed in its multifaceted identity; it goes much further than being solely an international financial hub. As the former Director-General at Invest Hong Kong, Dr Simon Galpin, so aptly puts it, Hong Kong serves as a “super-connector” and “a conduit for direct investment”, opening doors to other major Asian markets and unlocking a vast continent of opportunities which mainland Chinese and foreign investors can tap.
Hong Kong’s strategic location at the heart of Asia means that all other major cities in Asia are easily reachable within four hours and half of the world’s population within five hours by plane. With its first-rate infrastructure and telecommunications systems, Hong Kong is just as well-connected in the digital world; its average broadband speed once again tops the global league. Without a doubt, Hong Kong’s physical as well as digital connectivity further underscores how well-suited it is to the role as a “super-connector” in addition to already being one of the world’s leading trade and logistics hub, finance hub and maritime centre.
A Gateway to and for China
Long been dubbed the “gateway to China”, Hong Kong has been facilitating trade between the East and the West and, in particular, between mainland China and the rest of the world. To complement the Chinese government’s “going out” strategy as China becomes increasingly outward-looking, Hong Kong has been acting as a gateway for China to access overseas markets. According to the Hong Kong Trade Development Council (HKTDC), around 60% of the stock of China’s foreign direct investment outflows amounting to US$656.9 billion were made to Hong Kong in 2015. The HKTDC also adds that Hong Kong provides the preferred platform for mainland Chinese enterprises when seeking professional services to capitalise on opportunities from the “One Road, One Belt” initiative.
Nowhere is Hong Kong’s indispensable role as a conduit to international markets more evident than in the recent developments promoting the liberalisation of China’s financial system, most notably in the roll-out of the Shenzhen-Hong Kong Stock Connect programme in December 2016. It follows in the footsteps of the Shanghai-Hong Kong Stock Connect launched in 2014 and provides investors with further mutual access to both stock markets. And of course, Hong Kong’s absolute importance is not least seen in the fact that it is the world’s first and largest offshore renminbi centre with the biggest pool of renminbi liquidity outside mainland China.
As your well-connected and highly experienced expert advisor based in Hong Kong with presence in mainland China, CW can help you:
- to determine the feasibility of the legal entity structure and establish operations in Hong Kong;
- to ensure compliance with audit and other assurance requirements;
- to manage tax-related obligations in accordance with local taxation laws, regulations and practices;
- to ensure compliance with local customs and excise laws and regulations;
- to take care of time-consuming business processes, e.g. accounting, payroll and other HR operations.
Traditionally, when HR and payroll management comes to mind, we think of recruitment involving face-to-face interactions, attendance records through card readers and sign-in sheets, leave,
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