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www.hketoberlin.gov.hk

HK ETO Berlin

Hong Kong: Asia’s Business Capital

13 October 2011

Ljubljana, Slovenia

Mr. Stephen Kai Wong Director

Hong Kong Economic and Trade Affairs

(Central and Eastern Europe)

The Government of the Hong Kong Special Administrative Region


HK ETO Berlin

Hong Kong


HK ETO Berlin

Hong Kong ranked 5th in Global CitiesIndex 2010

Source: Survey conducted by the American journal Foreign Policy, in conjunction with A.T. Kearney and the Chicago Council on Global Affairs


HK ETO Berlin

Population: 2 million 7,1 millionDensity: 98 per km² 634 per km²Area: 20,273 km² 1,104 km²GDP in Euro (2011): 37.037 billion 164 billionGDP Growth Rate: 2.036 % 5.1%(Q2 2011 year-on-year) GDP per Capita in Euro (2011): 18.324 24.980 GDP – Services Sector: 63.5 % 92.5 %Unemployment: 8,1 % 4,6 %Inflation: 2.169 % 5.8 %

Basic Facts


HK ETO Berlin

Hong Kong – SloveniaTrade Relations

• Bilateral trade: grew between 2006 and 2010• Averaging annual growth rate: 8 %• In 2010

- total bilateral trade EUR 80 million

- Slovenia’s main imports from Hong Kong: toys/games (70 %), musical instruments/sound recordings (11 %) and printed matter (9 %).

- Hong Kong’s main imports from Slovenia: raw hides/skins (42 %),plastic waste/scrap (8 %) and fresh or frozen meat (6 %).


HK ETO Berlin

Hong Kong – SloveniaTrade Relations

• High-level governmental and trade visits underscore deepening ties between Hong Kong and Slovenia.

• Hong Kong's Financial Secretary, Mr John C. Tsang, visited Ljubljana in May 2008, leading a high-level delegation from the services sector – the first senior Hong Kong official to visit Slovenia.

• In October 2008, the President of Slovenia, Dr. Danilo Türk visited Hong Kong.

• The Minister of Economy, Mr Andrej Vizjak, was the first senior Slovenian delegate to visit Hong Kong in 2005.

• Slovenian visitors to Hong Kong are steadily increasing, rising from 2,254 in 2007 to 2,327 in 2010.


HK ETO Berlin

Why Hong Kong?

World‘s freest economy


HK ETO Berlin

Hong Kong’s Enduring Advantages

• Hong Kong retains its advantages:

– Rule of law

– Level playing field (local and international companies compete on an equal footing)

– Currency convertibility, separate from Renminbi

– International business practices

– Free flow of information

• Negotiates and signs own economic/trade agreements

– Hong Kong is a full, separate member of WTO and APEC

• At the same time, Hong Kong is an integral part of China


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• 1 July 1997 - Hong Kong Special Administrative Region

• “One country, Two systems”– own legal system– own financial system– own economic system– own social system– own political system

• High degree of autonomy

The Basic Law of the Hong Kong Special Administrative Region of the People’s

Republic of China


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Hong Kong to ChinaThe “One Country, Two Systems” Principle

• Signifies the Central Authorities' support for maintaining Hong Kong’s long-term prosperity and stability

• Hong Kong people ruling Hong Kong people

• Highly autonomous


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UK21United Kingdom10Chile10Mainland China20Mauritius9Denmark9Japan17Australia8United States8Germany13Canada7Canada7Canada8United States6Switzerland6Australia7Chile5Ireland5Switzerland4Switzerland4New Zealand4Singapore3New Zealand3Australia3Hong Kong2Singapore2Singapore2US1Hong Kong1Hong Kong1

The World Competitiveness Scoreboard 2009

Source: IMD

Economic Freedom Ratings 2010

Source: The Fraser Institute (Economic Freedom of the

World: 2010 Annual Report)

2010 Index of Economic Freedom

Source: The Heritage Foundation/ The Wall

Street Journal

Hong Kong International Rankings


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Why Hong Kong?


Gateway to China


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“No other city in the world c a n h e l p o v e r s e a s 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

Gateway to China


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• The world's third busiest airport

• One of the world’s busiest ports

• 23 minutes from Central to Airport by high-speed train

• Less than an hour from GPRD “the factory of the world”

• 10th largest trading entity in merchandise trade €602 billion (2.8% of world total)

• 14th largest services trading entity€114 billion (2.2% of world total)

Heart of Asia and Gateway to China


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Greater Pearl River Delta

GPRD exports: €276 billion

7th in the world if it were a country - ahead of Italy, South Korea, United Kingdom and Canada.

GPRD land area size: 55,890 km²Smaller than: AustriaPanamaIreland

GPRD population: 55.26m people More populous than:SpainSouth KoreaCanada

Less than 1% of China’s land area

More than 27% of all the country’s exports


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• Mainland and Hong Kong’s first free trade agreement

• Covers trade in goods and services

• Provides easier, earlier and wider access to Mainland for HK-made

products and HK-based service companies

• Available to people and businesses of all nationalities

• Foreign investors are also welcome to establish businesses in Hong

Kong to leverage on the CEPA benefits and join hands in tapping the

vast opportunities of the Mainland market

Closer Economic Partnership Arrangement (CEPA)


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• Companies must have “substantive operations” in HK

• “Made in Hong Kong” products, under specified ‘Rules of Origin’

Eligibility:

• Service Supplier Certificates1,300 with over 2,400 Certificates Issued

• Trade Certificates of Goods71,000

Applications approved (as at 31 December 2010) :

• Greater market access: – Lower market entry criteria

(capital, trading history etc.)– Can establish WFOE

• Removes all export dutiesBenefits:

• 44 service sectors• Over 1,600 categories of products • Exported direct from Hong Kong

to the Mainland

CEPA applies to:

Trade in ServicesTrade in Goods

CEPA


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Increasing Visitor Arrivals

12.7011.63

13.53

22.4717.96

15.5013.6012.508.50

3.792.36

11.7010.80

7.009.27

8.90

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

40.00

1997 2000 2003 2005 2006 2007 2009 2010

Rest of the WorldMainland China

Source: HKTB

MillionTourism expenditure in 2010, HK$210

billion, up 33%

8.92

5.31

Jan-May 2010

21%10.77Rest of the world

4.0%5.52Mainland China

% GrowthJan-May 2011(in million)


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Why Hong Kong?


Gateway to China

Leading financial centre


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China’s Global Financial Centre

• Global leader in IPOs since 2009

• Asia’s asset management hub with funds under management in excess of US$1 trillion

• First and largest offshore RMB platform –handles 86% of China’s global RMB trade

• World’s largest securitised derivatives market in 2010

• Home to 70 of the world’s 100 largest banks

• Pool of financial expertise (more CFAs than anywhere else in Asia Pacific)

New York2

Sydney, Toronto10Geneva9Zurich8Chicago7Shanghai, Tokyo5Singapore4Hong Kong3

London1CityRanking

The Global Financial Centres Index (GFCI) 9, The Z/Yen Group, March 2011


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Hong Kong: RMB offshore centre

• Part of China, yet offers a natural firewall.• Reliable testing ground for capital account opening and

international use of RMB• Allowing risk sharing among Chinese and their overseas

counterparts• Internationalisation of RMB, overall capital account liberalisation


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Hong Kong as Offshore RMB Centre for Asia and Beyond

Source: HKMA


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Why Hong Kong?


Gateway to China


Low and simple tax system


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Forbes Tax Misery Index

Hong Kong continues to have the lowest tax misery in Asia Pacific and the third lowest in the world, scoring 41.5


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Low and Simple Tax System

16,5

17

25

15

20

45

5

14,5

49

5

20

23 17

0

7

Hong Kong

Singapore

China

Corporate Income Personal Income Employer Social Security Employee Social Security VAT

Only imposes three direct taxes - profits, salaries and property

• NO VAT/GST or sales tax

• NO Capital gains tax

• NO Withholding tax on dividends and interest

• NO Estate duty

• NO Global taxation (offshore income and only HK-sourced income is taxable)

• NO Wine dutySource: Forbes Tax Misery Index 2009, Inland Revenue


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Confirmed Double Taxation Relief Agreements with 21 trading partners:

Double Taxation Agreements

In negotiations: • Denmark

• Finland

• India

• Italy

• Korea

• Macau

• Malaysia

• Malta

• Mexico

• Pakistan

• Saudi Arabia

• the United Arab Emirates

• Austria

• Belgium

• Brunei

• Czech Republic

• France

• Hungary

• Indonesia

• Netherlands

• Portugal

• Spain

• Switzerland

• Thailand

• UK

• Vietnam

• Ireland

• Japan

• Kuwait

• Luxembourg

• Liechtenstein

• Mainland of China

• New Zealand


HK ETO Berlin

Why Hong Kong?


Gateway to China



Excellent infrastructure


HK ETO Berlin

World Class ICT - Connecting People

• Asia’s most innovative economy Global Innovative Index

• 7th most e-ready economy in the worldEconomist Intelligence Unit

• 3rd highest average broadband connection speedUS-based network provider Akamai Technologies

• World’s most affordable internet and mobile phone services with penetration rates among the highest in the world.


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Investment in Infrastructure• Estimated capital works expenditure for 2011-12 will reach a record high of

over $58 billion and will exceed $60 billion for each of the next few years• Generating from commissioning to a mature stage 250,000 new jobs


HK ETO Berlin

Why Hong Kong?


Gateway to China



Excellent infrastructure

Skilled and multi-lingual workforce


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Quality Education and Workforce

• Home to Asia’s leading universities and business schools– HKU 1st and HKUST 6th in Asia, both in the world’s Top 50

Times Higher Education QS World University Rankings 2010

– World’s Top EMBA in 2010 - Kellogg - HKUST EMBA Programme– MBAs run by HKUST and CUHK ranked 1st and 4th in Asia

Global EMBA Rankings 2010 by the Financial Times

• Over 50 international schools - more than 30 nationalities

• Dependents have automatic right to work• Permanent residency after 7 years


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Quality of Life


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What makes Hong Konga Paradise for Business

Hong Kong

Rule of lawCommon Law System, Independent Judiciary

(Articles 8,18,19,84, 85)A low tax policy underan independent taxation

system (Article 108)

Status as an international financial

centre (Article 109)Free operation of

financial business and financial markets

safeguarded (Article 110)

Free flow of capitalguaranteed (Article 112)

Status of a free port(Article 114)


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英文是香港的法定語文

English is an official language in Hong Kong


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Foreign Direct Investment in 2010

Rank FDI Inflows USD bn FDI Outflows USD bn

1 USA 228.2 USA 328.9 2 China 105.7 Germany 104.9 3 Hong Kong 68.9 France 84.1 4 Belgium 61.7 Hong Kong 76.1 5 Brazil 48.4 China 68.0 6 Germany 46.1 Switzerland 58.2 7 UK 45.9 Japan 56.2 8 Russia 41.2 Russia 51.7 9 Singapore 38.6 Canada 38.6 10 France 33.9 Belgium 37.7

Source: World Investment Report 2011 (United Nations Conference on Trade and Development)

2010 FDI In‐flows ‐ Hong Kong vs Selected East Asian Economies

0

10

20

30

40

50

60

70

Hong Kong Selected East Asian Economies

Taiwan

Thailand

South Korea

Indonesia

Singapore

(USD in billion)

• 3,638 overseas/ Mainland companies* with regional headquarters and offices

* 2010 Annual Survey, Hong Kong SAR Government's Census & Statistics Department

B u s in e ss Fo o tp r in ts b y CB R E

To p b u s in e ss lo ca t io n s am on g m a jo r in te rn a t io n a l com p an ie s

C ity% o f to ta lcom p an ysam p le d (2 8 0 )

H o n g K o n g 6 8 .2%S in g a p o re 6 7 .5%To kyo 6 3 .9%Lo n d o n 6 3 .2%Sh an gh a i 6 1 .4%M o scow 60 .7%B e ijin g 6 0 .4%M ad r id 5 9 .6%D ub a i 5 6 .1%P a r is 5 5 .7%N ew Y o rk 5 5 .4%W arsaw 53 .6%M ia ln 5 2 .5%Sao P ao lo 5 2 .1%B an gko k 4 8 .9%

So u rce : CB R E

1 3 7

1 4 7

1 5 61 5 51 5 0

1 4 6

1 7 01 6 91 6 71 5 7

1 8 91 7 91 7 71 7 2

N o . o f in t l com p an ie sw ith o ff ice p re se n ce

1 9 1


HK ETO Berlin

Source: Companies Registry & Inland Revenue Department

Company set-up in Hong Kong

• Company incorporation with the Companies Registry:• Requirements: 1 Director, 1 Shareholder• Minimum Capital: HK$ 1 (ca. 0.10 €)• Processing time: 2 working days • Fee: HK$ 1,720 (ca. 172 €)

• Company registration with the Business Registration Office of the Inland Revenue Department :

• Processing time: 30 minutes• Fee: HK$ 2,600 (ca. 260 €)


HK ETO Berlin

How InvestHK helps Investors

Information to aid planning and evaluation

Facilitation of visa applications, schooling

PR and marketing support for launch/ expansion

Networking events, introduction to service providers

InvestHK


HK ETO Berlin

The Hong Kong Economic and Trade Office, Berlin

• First overseas Government representative office after the reunification

• To provide you with:Information

Support

Practical Assistance

• Continues to promote the interest of HongKong with Hong Kong Trade DevelopmentCouncil and Hong Kong Tourism Board


HK ETO Berlin

Hong Kong Economic & Trade Office, Berlin,The Government of the Hong Kong Special Administrative Region,Jaegerstrasse 33,10117 Berlin, Germany

Tel: +49 (0) 30 22 66 77 23 4Fax: +49 (0) 30 22 66 77 2 88Email: [email protected]: www.hketoberlin.gov.hk

Other useful Websites:Hong Kong SAR Government: www.gov.hkInvest Hong Kong: www.investhk.gov.hkHong Kong Trade Development Council: www.hktdc.comHong Kong Tourism Board: www.hktb.com

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