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          Number of overseas companies in HK surges

          Updated: 2011-10-20 20:37

          (Xinhua)

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          HONG KONG - The total number of overseas and Chinese mainland parent companies running business operations in Hong Kong in the first half of the year was a record-high 6,948, representing a 5.9 percent increase from 2010, a survey released here Thursday showed.

          The "2011 Annual Survey of Companies in Hong Kong Representing Parent Companies Located Outside Hong Kong" was released by Invest Hong Kong, the investment promotion department of the Hong Kong Special Administrative Region government and the city's Census and Statistics Department, aiming to understand the profile of such companies and their views on the business environment of Hong Kong.

          According to the survey, by June 1, there were 1,340 regional headquarters, 2,412 regional offices and 3,196 local offices in Hong Kong representing their parent companies located outside Hong Kong.

          Simon Galpin, the director-general of Investment Promotion at Invest Hong Kong, said, "Hong Kong is the perfect base from which to access the Mainland. At the same time, Mainland companies are also using Hong Kong as a springboard from which to go global."

          He added that Invest Hong Kong had helped almost 200 overseas and Chinese Mainland companies to set up business in Hong Kong in the first half of the year.

          "This level of activity supports our experience on the ground where we are seeing an increasing number of smaller, high-growth companies from all over the world choosing Hong Kong as the base for their regional operations."

          Of the 6,948 companies that responded to the survey, 24 percent indicated they plan to expand their business in Hong Kong in the next three years.

          About half of the parent companies come from four countries and regions. The United States tops the list with a total of 1,328 offices operating in Hong Kong, followed by Japan with 1,150, the Chinese Mainland with 805 and the UK with 562.

          When choosing a location to set up offices, the top five factors were simple tax system and low tax rate, free flow of information, corruption-free government, political stability and security, as well as communication, transport and other infrastructure.

          "Hong Kong has once again been ranked the world's freest economy by the Heritage Foundation's 2011 Index of Economic Freedom," said Galpin. "The city's low and simple tax regime includes profits tax of 16.5 percent and salaries tax capped at 15 percent. There is no VAT, no GST, no estate duties, no capital gains tax and even zero duty on wine, all of which definitely help to convince companies to set up and run their businesses in Hong Kong."

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