As one of the premier international financial centres, Hong Kong has a competitive edge in commerce and financial services, attracting a large number of overseas companies to set up offices and develop business here, and it is a home to many financial institutions. Hong Kong will continue to invest in infrastructure, innovative technology, talent development, and increase land supply to create a more favourable environment for its long-term economic development.
Located at the heart of Asia, Hong Kong thrives on extensive networks with the rest of the world and close financial integration with Mainland China, resulting into close economic and commercial ties between the two places.
With its strengths as an international financial centre and its unique advantage of having close links with Mainland China, Hong Kong is the dominant gateway to Mainland China for offshore enterprises and investors. As the world's largest offshore RMB business centre, Hong Kong originates and intermediates two-thirds of China’s inward foreign direct investment (FDI) and outward direct investment (ODI) as well as most financial investments. The "going out" of Chinese firms and Chinese investors' demand for overseas investment bring more new opportunities to the city.
Hong Kong has a well-established legal system, a sophisticated system of law-making, legal protection and legal enforcement; there is a strong commercial and property law encompassing all aspects of intellectual property protection, contract law, companies, finance, and competition regulation. Hong Kong also has a reputable judiciary responsible for the administration of justice, the sophisticated court system consisting of the courts of first instance and appellate courts to deal with all types of legal disputes, enhancing the confidence of enterprises and financial institutions in developing their business in Hong Kong.
Hong Kong adopts a simple tax regime with only 3 direct taxes are imposed including profits tax, salaries tax and property tax; there is no capital gain tax, sales tax or VAT. The tax rate in Hong Kong is significantly lower than that of other developed countries or regions. The standard tax rate for salaries tax in Hong Kong is 15%. Compared with the highest marginal tax rates of 37% and 45% in the United States and the United Kingdom respectively, the tax rate in Hong Kong is only half. Hong Kong upholds a low, simple and one-for-all tax regime, which provides certainty for commercial undertakings and attracts overseas enterprises and investors to do business in Hong Kong.
The Hong Kong dollar is freely convertible in the market and no foreign exchange control measures are in place. Businesses and investors can conduct business in a robust environment with financial stability and free flow of capital, allowing them to make better business and investment decisions.
Hong Kong pursues a free trade policy and does not maintain barriers to international trade. Hong Kong only imposes duties on a small number of goods for reasons of public health, safety or security, these include tobacco, liquor (with an alcoholic strength of more than 30%), methyl alcohol and certain hydrocarbon oils. There is no customs tariff on other items. Hong Kong is a founding member of the World Trade Organization and actively supports and promotes a free, open, and stable multilateral trading system, bringing diversification and good development opportunities for enterprises and investors.
With its strengths in banking, capital market, and asset management, Hong Kong provides an all-encompassing and high-quality financial platform for investors, financiers, asset managers, funds, and financial institutions alike from all over the world.
To further enhance Hong Kong’s competitiveness as an international financial centre, the Hong Kong Monetary Authority (HKMA) has established a Market Outreach Division to help market stakeholders to take advantage of the growth opportunities in Mainland China financial markets, to develop fintech as well as green and sustainable finance.
Riding on the continuous economic growth in the Mainland, and its international expertise, experience and network, Hong Kong is a forward-looking hub for businesses to capture new opportunities, such as those arising from the Belt and Road Initiative, Guangdong-Hong Kong-Macao Bay Area, fintech, infrastructure investments and green finance.
With the rise of fintech and green finance, the HKMA established the Fintech Facilitation Office (FFO) and Infrastructure Financing Facilitation Office (IFFO) in 2016 to facilitate the healthy development of the fintech ecosystem in Hong Kong and investment and financing of sustainable infrastructure and green development respectively. Such development provides information exchange and experience sharing platform for the green development of Hong Kong's banking and financial industry, and helps promote Hong Kong as a fintech hub in Asia.
Little Thrifty just came across information about Hong Kong's competitiveness and learned that Hong Kong has been recognised as one of the world's most competitive economies, and Mainland China will continue to make a significant contribution to global economic growth. Under “One Country, Two Systems”, Hong Kong will play a unique role as a gateway, springboard and intermediary, actively integrating into the overall development of the country and providing a favourable environment for long-term economic development.
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