Leveraging Hong Kong’s Unparalleled Strengths andUnprecedented Opportunities

Dr Jimmy ChiangAssociate Director-General of Investment Promotion

September 2019

© Copyright Invest Hong Kong, HKSAR

3rd

FDI Inflows

2nd

CompetitivenessEconomic Freedom

1st

A WORLD CLASS ECONOMYHONG KONG

Sources: The Heritage Foundation, International Institute for Management Development, UNCTAD

Over 120 airlines operate 1,100 flights per dayto over 220 destinations worldwide, including over 50 Mainland cities

The busiest air cargo airport in the world – 5.1 million tonnes of cargo handled in 2018 (Airport Authority Hong Kong)

Most of Asia’s key markets within four hours’ flight time

4hours

From half the world’s population

5hours

HEARTof ASIA

LAW

THERULEOF

(as of May 2019)

* There is no standard rate across the Mainland China. Shanghai is used as an example.

HONG KONG

SINGAPORE

SHANGHAI*25%

45%

32.9%

10.5%

16%

17%

22%

17%

20%

7%

16.5%15%

5%5%0% VAT

Corporate Income

Personal Income

Employer Social Security

Employee Social Security

VAT

✗VAT/GST/Sales tax

✗Capital Gains Tax

✗Withholding tax on

investments

✗Estate duty

✗Global taxation

✗Wine duty

Hong Kong has signed Comprehensive Double Taxation Agreements (CDTAs) with 40jurisdictions.

Negotiations with 15 jurisdictions are in progress.

LOW & SIMPLETAX SYSTEM

HK$2M

ProfitsAbove

of ProfitsFirst HK$2M

8.25%

16.5%

Two-tiered tax system

FREE & FASTFLOW OF INFORMATION

for smartphonepenetration rate

259.9%(OFCA, Oct 2018)

in Asia

MOST COMPETITIVEFINANCIAL CENTRE IN ASIA

Ranking City

1 New York

2 London

3 Hong Kong

4 Singapore

5 Shanghai

6 Tokyo

7 Sydney

8 Beijing

9 Zurich

10 Frankfurt

Source: The Z/Yen Group of Companies

The Global Financial Centres Index (Sept 2018)

POPULATION71.1mn>UK, Italy, South Africa

GDPUS$1.6trillion>Indonesia, Netherlands, Turkey

LAND AREA56,000km2

>Ireland, Latvia, Panama, West Virginia (US)

GREATERBAY AREA

GREATER BAY AREA

CHINA

Hong Kong

Zhaoqing GuangzhouHuizhou

Dongguan

Shenzhen

Foshan

Jiangmen MacaoZhuhai

Zhongshan

Source: Government statistical departments in the relevant jurisdictions, TDC

Guangdong-Hong Kong-Macao Bay Area

San Francisco Bay Area

New York Metropolitan Area

Tokyo Bay Area

Land area (sq km) 55,905.5 17,886.4 21,478.5 36,898.3

Population (mn) 69.6 7.6 20.2 44.0

GDP (US$ bn) 1,513.4 781.2 1,657.5 1,774.2

Real GDP growth (%) 7.0 5.3 0.9 1.9

Per-capita GDP (US$) 21,750 102,230 82,050 40,360

Air passenger traffic (mn passenger-times) 201.7 81.3 132.2 123.9

Air freight traffic (mn tonnes) 7.96 1.18 2.16 3.58

Port container throughput (mn TEUs) 66.48 2.42 6.25 7.76

GDP share of tertiary industry (%) 65.6 71.9 83.3 77.0

COMPARISON WITHTHE WORLD’S MAJOR BAY AREAS

OUTLINE DEVELOPMENT PLAN

https://www.bayarea.gov.hk

DEVELOPMENT OBJECTIVES1. A globally influential international innovation and technology

hub

2. Expediting infrastructural connectivity

3. Building a globally competitive modern industrial system

4. Taking forward ecological conservation

5. A quality living circle for living, working and travelling

6. An important support pillar for the Belt and Road Initiative (BRI)

7. A showcase for in-depth cooperation between the Mainland and Hong Kong and Macau

FOCUSES OF 4 CORE CITIES

Guangzhou

Shenzhen

MacaoHong Kong

GUANGDONG

World-class tourism and leisure centre Commerce and trade cooperation service

platform between China and Lusophone countries

International financial, transportation and trade centres

Global offshore RMB business hub and international asset and risk management centre

International legal and dispute resolution services centre

Develop high-end services, innovation and technology industries and emerging industries

National core city and integrated gateway city

Enhance functions as international centres for commerce and industry, transport, technology, education, and culture

National economic core city and national innovation city

Develop as capital of innovation and creativity with global influence

For the other 7 key node cities, main objectives are to develop towns with distinct characteristics and to promote integrated development of urban and rural areas

Coordinated and innovation-driven regional developmentwith more seamless flows of people, goods, capital and information

60%+ of the world’s population

30%+ of global GDP

30%+ of the world’s total merchandise trade

21st Century Maritime Road

Silk Road Economic Belt

Sources: China-US Focus, Xinhua Finance Agency

Hong Kong

TURKEY

IRANIRAQ CHINA

INDIA

SRI LANKA

INDONESIA

THAILAND

BeijingUrumqi

BasraKhambhat

Kollam

Banda Aceh

GuangzhouQuanzhou

Xi’an

South China seaBay of Bengal

Andaman sea

Arabian sea

Indian Ocean Belttung

OMAN

BANGLADESH

ITALY

RUSSIA

KENYA

BELT & ROAD

Arrangement for Advancing HK’s Full Participation in and Contribution to the Belt and Road Initiative

signed in Dec 2017

11-12 September at Hong Kong Convention and Exhibition Center

BELT& ROAD

FINANCIAL/ TRANSPORT/ TRADE CENTRE

CORPORATETREASURY CENTRE

Function

In-house bank to provide treasury services Intra-group borrowing and lending Cash and liquidity management Processing of payments to vendors Supporting capital raising Risk management

Hold the control function on behalf of headquarters Help monitor changes in local regulations and market

conditions

Incentive

Profits tax rate reduced to 8.25% Interest deductions allowed for tax purpose

(Effective since May 2016)

NEW TAX REGIME

GREEN FINANCE

Subsidies for green bond issuance(Green Bond Grant Scheme)

Subsidies for first-time bond issuance(Pilot Bond Grant Scheme)

Inaugural government green bond of HK$100 billion (US$13 billion) issued in May 2019

INNOVATION & TECHNOLOGY

STRONG GOVERNMENT SUPPORT

Innovation & Technology Venture Fund

300% Super Tax Deduction for R&D

Talent List & Technology Talent Admission Scheme (TechTAS)

Smart city Biomedicine/healthy aging

AI and robotics FinTech

KEY EVENTS

Overseas and Mainland companies

8,225

8,7546.4%

Regional headquarters

1,5308.3%2018

VIBRANT INTERNATIONAL BUSINESS HUB

Sources: 2018 Annual survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong, 2018 Startup Survey

HOW WE CAN HELP YOU GROW

Whether you are new to Hong Kong or a long-standing investor

Planning Set-Up Launch Expansion

Information to aid planning and evaluation

Facilitation of visa / licence applications,

schooling, introduction to service providers

PR and marketing support for launch

Ongoing support on business expansion

GET in TOUCH

investhk.gov.hk

© Copyright Invest Hong Kong, HKSAR

Jimmy ChiangAssociate Director-General of Investment PromotionJChiang@investhk.gov.hk

(852) 3107 1000

hk.linkedin.com/in/jimmyhlchiang@jimmyhlchiang

WeChat ID: INVEST_HK

e.weibo.com/investhk

@InvestHK

www.linkedin.com/company/invest-hong-kong

www.youtube.com/user/investhk

www.flickr.com/photos/investhk

Leonid OrlovPrincipal Consultant (Moscow)leorlov@investhk.com.hk