Gus Franklyn-Bute
Welcome to Hong Kong
Hong Kong: The Gateway to ChinaHong Kong’s Role in Growing Your Business in Asia
About InvestHK
• Support overseas, Mainland and Taiwanese businesses to set up and expand in Hong Kong
• Our aim is for companies to make an informed choice and put the right part of your business in Hong Kong for the right reasons in order to be more competitive and make more profit
• Provide free advice and customized services to help your business succeed
The Department for Foreign Direct Investment
Relevant up-to-date
information
Facilitation of set-up /
expansion
Matchmaking and
networking support
Public relations
support for launch /
expansion
1. Three (3) Markets• Hong Kong > A dynamic consumer market• Hong Kong + Mainland China• Hong Kong + Asia
2. Business or Operational Functions - E.g.• Sales and Marketing• Research & Development• Sourcing and Procurement• Regional Office/Regional HQ Management• Treasury Functions
3. Low Tax… or No Tax
3 Markets, 3 Opportunities for Estonian Businesses
Hong Kong – Dynamic consumer market
• Free port – no import or export tariffs on most goods
• No sales tax – maximise consumer business opportunities
• Hong Kong loves to shop – total retail sales in 2010 at HK$324.9 billion, an 18.3% increase over 2009
• Maximise brand and product exposure to more than 36 million (and growing!) visitors to Hong Kong
• With over 22 million Mainland Chinese visitors, Hong Kong is the shop window for Mainland consumers
• World-class logistics, infrastructure and financial services to support and help develop consumer activities in Hong Kong and Asia
• Large pool of tri-lingual and capable talent with international experience to help your consumer business
• Hong Kong a testing ground before entering Mainland China – minimising risk
“No other city in the world can help
overseas investors manage the risks
inherent in entering Chinese Mainland markets as well as
Hong Kong”
Source: E.E. Scott, First Choice Hong Kong – Your Asia Pacific Platform
Hong Kong + ChinaGateway to the Mainland
• Supporting China’s development– Raising capital, upgrading corporate skills,
international exposure, testing/tailoring products• Leisure & business visitors
– 36 million visitors in 2010, fuelling retail, leisure, hospitality sectors – 22.7 million from mainland China
• Closer Economic Partnership Arrangement (CEPA)• Double Taxation Agreement• RMB trade settlement, RMB Banking and RMB bond
issue
China opportunities
Major Fund Raising Centre for Mainland Companies
Source: HKEx
439
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%38 50 53 64
90 101 111 127152
198242
304335
19931994
19951996
19971998
19992000
20012002
20032004
20050
50
100
150
200
250
300
350
400
# of companies%
# of companies
Mainland companies listed in Hong Kong
% of Market Capitalisation% of Equity Turnover
367
2006
60%
55% 450
2007
50065%
75%
70%550
600
2008
465
2009
542
Hong Kong + Asia Opportunities
RHQs / ROs / LOs in Hong Kong 2001 – 2010
4,4674,867
5,414
5,9436,272 6,354 6,440 6,612
6,397 6,561
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010Year
No.
RHQs ROs LOs Total Source: C&SD
Hong Kong: How to use the Hong Kong Advantage
Most common business activities by overseas businesses
• Sales and Marketinge.g. local and region sales and marketing operation to promote your own products and services to international buyers
• Research & Developmente.g. HK Science Park, Cyberport, testing new retail product
• Sourcing and Procuremente.g. access of most dynamic exhibitions, fairs, and events to obtain newest products
• Regional Office/Regional HQ Managemente.g. location to manage Far East agents, suppliers and manufacturing
• Treasury Functionse.g. Regional or Global Financial and Foreign Exchange Management
• Level playing field for all
• No foreign ownership rules
• Rule of law, low corruption
• Freely transferable currency
• Freedom of information
• Advanced infrastructure
• Low tax … or no tax!
Hong Kong offers “Business Freedom”
Forbes’ Tax Misery Index 2009
Hong Kong Singapore Mainland China
Corporate tax 16.5% maximum rate 17% maximum rate Standard rate = 25%High/New Tech Enterprises (HNTE) = 15%HNTE some regions 0%
Income tax 15% maximum rate(salaries)
20% maximum rate 5 - 45%
VAT/GST Nil 7%Certain exemptions apply
17%Certain exemptions apply
Income not subject to tax
Offshore income; dividends; capital gains; tax exemption for interest income from deposits placed with authorised financial institutions
Certain remitted income; certain shipping income; certain Singapore dividends; prescribed income of foreign investors arising from certain funds; capital gains
All income subject to tax (certain preferential tax treatments for foreign-invested enterprises)
Withholding tax Nil for dividends, management fees, interest, rent5.25% for royalties
Nil for dividends10% for royalties15% for interest 20% for directors
10% for dividends 10% for royalties10% for interest 10% for capital gains
Hong Kong Low Tax RegimeCorporate Tax Cut to 16.5%; Income Tax Cut to 15%
InvestHK Sector Specialist Teams
• Business & Professional Service
• Consumer Products
• Financial Services
• ICT
• Innovation &Technology
• Creative Industries
• Tourism & Hospitality
• Transportation & Industrial
Enjoy our free services
• Latest information on business environment and opportunities
• Contacts for all aspects of business establishment
• Arranging tailored visit programmes
• Support and assistance with visa applications, trade regulations etc.
• Public relations services during your launch/expansion
• Advice on settling in Hong Kong – housing, schooling, healthcare
Invest Hong Kong: how we can help
InvestHK LondonGus Franklyn-Bute
+44 (0)207 499 9821www.investhk.gov.hk
Thank you!
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