Why Hong Kong

A highly dynamic city that serves as the perfect platform into Mainland China and Asia, Hong Kong is the ideal place for business in Asia. It is a business-friendly city with a multitude of advantages to ensure businesses can flourish.

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A Supportive Government

Hong Kong will capitalise on the opportunities arising from the national Belt and Road Initiative and the Guangdong-Hong Kong-Macao Bay Area development proactively and holistically. The government shall play the role of a “facilitator” and “promoter”.

Key initiatives announced in the 2024-25 Budget include:

Green Future
Green Finance

• Assist companies and financial institutions in sustainability reporting and data analysis
• Green and Sustainable Finance Grant Scheme: extended to 2027
• Green and Sustainable Fintech Proof of Concept Subsidy Scheme: to be launched in the first half of 2024
• Co-host a Joint Climate Finance Conference in Hong Kong with Dubai

Green Shipping

• Allocate HK$65 million to concessionary measures for Hong Kong-registered ships that have attained a high rating under international standards of decarbonisation
• Study green-methanol bunkering for local and ocean-going vessels

Green Aviation

• Promote use of Sustainable Aviation Fuel in Hong Kong
• Photovoltaic technology: Launch a pilot scheme to explore applications on facades of government buildings
• Electric vehicles: Extend the first registration tax (FRT) concessions for electric vehicles to March 2026 with concessions reduced by 40%
  •         Maximum FRT concession under the “One for One Replacement” Scheme:
  •          HK$172,500Concession ceiling for general electric private cars: HK$58,500
  •          Not applicable to electric private cars valued at over HK$500,000 before tax

Innovation and Technology

• AI Supercomputing Centre: First phase facility to operate in 2024 earliest. Allocate HK$3 billion to support local universities, R&D institutes and enterprises to leverage its computing power, etc
• Establish the Hong Kong Microelectronics Research and Development Institute in 2024 to facilitate research collaboration on third-generation semiconductors
• HK$6 billion for universities to set up life and health technology research institutes
• Set up the Greater Bay Area International Clinical Trial Institute in Hetao Shenzhen Hong Kong Science and Technology Innovation Co-operation Zone in 2024
• Launch the New Industrialisation Acceleration Scheme in 2024 and provide enterprises with up to HK$200 million on a matching basis
• Publish a White Paper on the Development Plan for Hong Kong Park of Hetao in 2024
• HK$2 billion to support presence of InnoHK research clusters in Hetao
• HK$200 million to support incubation and acceleration programmes to Hetao startups engaging in life and health technology
• HK$3 billion earmarked to launch a Frontier Technology Research Infrastructure Support Scheme
• Provide up to HK$16 million to each Technology Transfer Office of 8 UGC-funded universities

Finance

• Issue HK$70 billion worth of retail bonds:
  •          Silver bonds: HK$50 billion
  •          Green bonds and infrastructure bonds: HK$20 billion
• Promote introduction of block trading, RMB counters under Southbound Stock Connect, and expansion of the mutual access regime to Real Estate Investment Trusts (REITs)
• Host the 10th Anniversary of Mutual Access Forum and stage a series of roadshows in the Mainland
• Extend the Grant Scheme for Open-ended Fund Companies and REITs for 3 years
• Enhance preferential tax regimes for family office funds, etc.
• Continue to build collaborative framework on cross-boundary credit referencing
• HK$100 million to promote sustainable development of financial services

Assisting Small and Medium Enterprises

• SME Financing Guarantee Scheme: extend application period for 80% and 90% Guarantee Products till end March 2026
• BUD Fund: inject HK$500 million with launch of “E-commerce Easy”. Provide up to HK$1 million per enterprise for implementing e-commerce projects in the Mainland
• Digital Transformation Support Pilot Programme: SMEs in the F&B and retail industries to be invited to select ready-to-use solutions starting in early 2024

Trade

• Multinational supply chain management centre:
  •  Provide consulting services, trade financing and corporate training
  •  Study the establishment of trade single window to provide one-stop services for enterprises
  •  Attract Mainland manufacturing enterprises to set up offshore trading management headquarters in Hong Kong
• Explore new markets:
  •  Consider establishing Economic and Trade Offices in Riyadh, Saudi Arabia and Kuala Lumpur, Malaysia
• Organise “Belt and Road Festival” and “Belt and Road Initiative Tax Administration Cooperation Forum” in 2024

Intellectual Property Trading

• Introduce legislative proposal to implement “patent box” tax incentive. Profit tax rate to be reduced to 5%
• HK$45 million to support Hong Kong Productivity Council in establishing and operating WIPO Technology and Innovation Support Centre

Maritime

• Study enhancements to tax concession measures for maritime industry
• Offer block registration incentive to shipowners for extensive registration of ships in Hong Kong

Aviation

• Strengthen aviation services with current major routes and routes along the Belt and Road, in support of “Air Silk Road”

Legal and Dispute Resolution Services

•  Headquarters of the “International Organization for Mediation” to be hosted in Hong Kong
•  Continue to promote Hong Kong’s legal and dispute resolution services in the Mainland, the Middle East and ASEAN member states

International Cultural Exchange

•  Inject HK$1.4 billion into Film Development Fund, HK$2.9 billion into CreateSmart Initiative
•  Organise Hong Kong Fashion Design Week annually from 2024 onwards
•  Devise key arrangements of Signature Performing Arts Programme Scheme in first half of 2024 to support long running of large-scale programmes
•  Organise the first Hong Kong Performing Arts Expo

Key economic initiatives announced in the 2023 Policy Address include:

Trawl for enterprises, attract and retain talents

• Develop a “Headquarters Economy” to attract enterprises from outside Hong Kong to set up headquarters or corporate divisions in Hong Kong; attract companies to re-domicile to Hong Kong
• Expatriates, including foreign staff of companies in Hong Kong, can travel to the Mainland on “multiple-entry visas”, with priority visa processing; entries of Vietnamese, Laotian and Nepalese talents are relaxed
• Establish the physical office of Hong Kong Talent Engage, expand the coverage of universities under the Top Talent Pass Scheme, and implement the Capital Investment Entrant Scheme
• Establish the Hong Kong International Legal Talents Training Academy and the Hong Kong International Academy Against Corruption, developing Hong Kong into a talent nurturing base
• Implement the Capital Investment Entrant Scheme – Under the scheme, eligible investors who make investments of HK$30 million or above in assets such as stocks, funds, bonds, etc. (excluding real estate) can apply for entry into Hong Kong
   

Reinforce our advantages and build a diversified economy

• Reinforce our status as international financial centre – enhance stock market liquidity, expand offshore Renminbi business, deepen GBA collaboration and venture into green finance
• Expand our global economic and trade networks and our reach to new markets; set up more consultant offices to attract businesses and investment
• Publish the Action Plan on Modern Logistics Development to promote smart development, modernisation, green and sustainability, internationalisation and facilitation of logistics
• Strengthen support to SMEs by providing flexible repayment arrangements, tapping into e-commerce, expediting digital transformation, and reinforcing export credit insurance
• Accelerate growth of the innovation and technology (I&T) ecosystem
  • Set up the New Industrialisation Development Office to support development of strategic enterprises, facilitate upgrading and transformation of manufacturing sector and assist start-ups
  • Establish the Hong Kong Microelectronics Research and Development (R&D) Institute and commission the Microelectronics Centre to facilitate R&D of microelectronics and industry development
  • Expedite establishment of a supercomputing centre to foster development of artificial intelligence
  • Set up a HK$10 billion New Industrialisation Acceleration Scheme to provide matching fund for promoting downstream development of new industrialisation
• Develop cultural and creative industries
  • Establish the Cultural and Creative Industries Development Agency to promote the arts, culture and creative sectors as industries
  • Inject HK$4.3 billion to the Film Development Fund and the CreateSmart Initiative
  • Launch the Signature Performing Arts Programme Scheme to fund and nurture representative and large-scale major performing arts productions to be staged as long-run performances
  • Organise the Hong Kong Fashion Design Week as a flagship initiative to promote Hong Kong’s fashion and textile design brands
• Publish the Action Plan on Maritime and Port Development Strategy to develop Hong Kong into a leading international maritime centre, promote high value-added maritime services and facilitate GBA maritime collaboration
• Northern Metropolis as the new engine for growth
  • Adopt an “industry-driven” approach
  • Integrate deeply with Shenzhen and other GBA cities
  • Leverage market forces to expedite the development
• Formulate the Development Blueprint for Hong Kong’s Tourism Industry 2.0, develop signature tourism products, and enhance development of cruise tourism economy
• Promote new energy transport – develop bunkering of green maritime fuel and supply of sustainable aviation fuel, formulate strategy for hydrogen development, and promote green transformation of public land transport
   
• The Government of Hong Kong SAR is also committed to driving local business through a variety of initiatives. For details of government funding schemes, please visit here.

Premier Business Hub in Asia

Hong Kong enjoys an ideal location in Asia that enables businesses to tap into the multitude of opportunities in the Guangdong-Hong Kong-Macao Bay Area and throughout the rest of the region.

The Perfect Business Base 
With all of Asia’s key markets less than four hours’ away, it is easy to see why over 9,000 businesses and companies have made Hong Kong their home. Many have placed their strategic functions, including sales, operations, research and development (R&D), distribution, regional headquarters and corporate treasury centres in the city. Over 100 airlines offer easy and efficient travel to 190 locations from Hong Kong whilst half of the world’s population can be reached within five hours by plane. 

Future-driven 
The Belt and Road Initiative is set to link Mainland China with countries across Asia, Europe and the Middle East. As an international finance centre, Hong Kong’s independent legal system, rule of law, free flow of information and capital, and sound regulatory regime, put it in a prime position to help businesses make the most out of the Belt and Road.   

Another opportunity arises from the Guangdong-Hong Kong-Macao Bay Area (GBA) . The economic integration will combine the expertise of more than ten cities throughout the region to create a world-class city cluster. Hong Kong will play a key role in ensuring the city cluster is internationally competitive, making it the ideal location for businesses and companies to reap the benefits of the city cluster.  

Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures makes it easier for businesses and companies to operate. 

Trade and Economic Ties 
To secure favourable conditions for exports of goods and services from Hong Kong to the Mainland and international markets, Hong Kong government endeavours to enter into more Hong Kong’s Free Trade Agreements with the trading partners. The Economic and Trade Offices (ETOs) set up by the HKSAR Government in Mainland China and overseas will further promote economic ties and exchanges with Belt and Road countries. 

So far, Hong Kong has forged eight Hong Kong’s Free Trade Agreements, respectively with the Mainland of China, New Zealand, the Member States of the European Free Trade Association  (EFTA), Chile, Macao, the Association of Southeast Asia Nations (ASEAN), Georgia and Australia. FTA negotiation has also begun with other trading partners. FTA negotiation has also begun with other trading partners. Hong Kong has so far signed Investment Promotion and Protection Agreements with 20 economies and has concluded negotiations with Bahrain, Mexico, Myanmar and the United Arab Emirates. Negotiations will commence or continue with other Belt and Road countries.

A Leading Financial Centre 
Hong Kong has long been the region’s leading financial hub.  It offers a highly transparent and robust regulatory regime for financial services industries such as banking, securities and futures, insurance and retirement schemes. These industries adhere to the best global practices and standards, giving confidence to everyone looking to do business in Hong Kong. 

The city is also home to the world’s largest offshore hub in Renminbi settlement. Businesses can easily enjoy a wide variety of Renminbi services on offer from banks and financial institutions. 

Stock Connect and Bond Connect have launched in Hong Kong. They have given investors in Hong Kong direct access to Mainland China whilst further cementing the city’s status as an international finance centre. The relevant authorities are expediting the implementation of the Wealth Management Connect under which residents in Hong Kong, Macao and nine cities in Guangdong Province could carry out cross-boundary investment in wealth management products distributed by banks in the Guangdong-Hong Kong-Macao Greater Bay Area. 

Hong Kong Monetary Authority issued virtual bank licences to eight virtual banks so far, and all have already officially opened. Insurance Authority has also issued four virtual insurer authorisations. 

Low, Simple and Competitive Tax System

Businesses and individuals in Hong Kong enjoy one of the most tax-friendly systems in the world. Only three direct taxes are imposed and there are generous allowances and deductions which can reduce your taxable amount.

The three taxes are:

• Profits tax for the first HK$2 million of profits of corporations is 8.25 percent. Profits above that amount will be subject to the tax rate of 16.5 percent. For unincorporated business (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5 percent and 15 percent. 
• Salaries tax with standard rate of 15 percent
• Property tax of 15 percent

Here are the taxes which Hong Kong does not impose:

• No sales tax or VAT
• No withholding tax on dividends and interest
• No capital gains tax
• No tax on dividends
• No estate tax

Free Trade Port
Another benefit of setting up business in Hong Kong is its free trade policy. The city’s free port status and easy customs procedures make it easier for businesses and companies to operate. 

Open Business Environment

Hong Kong has always maintained an open business environment for business activities and commerce.

One Country, Two Systems
Hong Kong has maintained its own currency, political and legal systems. This has allowed the city to continue to flourish as an international business city whilst enjoying the benefits of unrivalled access to opportunities in Mainland China. 
Some of the benefits of One Country, Two Systems include:

• No foreign ownership restrictions
• English and Chinese as official languages with English the preferred language for business and contracts
• Free movement of capital, talent, goods and information
• Independent participation in international forums

World’s Most Competitive Economy
Hong Kong has been recognised as one of the world’s most competitive economy. The International Institute for Management Development (IMD) World Competitive Yearbook 2022 ranked Hong Kong 5th out of 63 economies.

The ranking reflects the consistent strides Hong Kong has made in building a favourable business environment. IMD assessed the economy across four competitiveness factors; economic performance, government efficiency, business efficiency and infrastructure. Hong Kong continued to rank favourably in “Government efficiency” and “Business efficiency”, and our rankings in “Economic performance” and “Infrastructure” also improved.  As regards the sub-factors, Hong Kong continued to top the ranking in “Business legislation”, and was amongst the top-three in “Public finance”, “Tax policy” and “International investment”.

Strong Intellectual Property Protection
The Government of Hong Kong SAR has specific policies and legal protection in place for intellectual property rights. The city’s intellectual property laws have been developed to reach the highest international standards to create a free and fair business environment.

Vibrant City-Living

Hong Kong is a global city that has attracted people from all corners of the globe. Many are drawn to Hong Kong thanks to its compact size, vibrant lifestyle, beautiful scenery and welcoming international community. The city’s business community is no different, allowing businesses of all types to thrive in the city’s cosmopolitan surroundings.

A Global Foodie Feast
The variety of food on offer in Hong Kong is one of the best in the world. With thousands of options from street-side food stalls to Michelin star restaurants, there’s something for everyone in Hong Kong. Options are not only plentiful but also diverse, with a wide array of cuisines available for Hong Kong’s international community. 

No Language Barriers
Don’t worry if you don’t speak Cantonese – English is one of the city’s official languages along with Cantonese. All of Hong Kong’s signs and  transport networks are bilingual in English and Chinese . Many locals are also fluent in  Mandarin. 

A Nature-filled City
You wouldn’t know it by looking at the towering skyscrapers and bright lights of Hong Kong, but the city is home to beautiful beaches and endless hiking trails. One only has to make a short journey away from the city to discover a completely different side to Hong Kong filled with nature and wildlife.  Although Hong Kong is one of the world’s largest metropolis, three-quarters of the 1,108 square kilometres of land is countryside.

International Education
Those with children will be happy to know that Hong Kong has over 50 international schools offering different international curricula. From kindergarten all the way to university, an international level of education is available to those seeking to maintain the educational consistency of their home country. 

Safe City
Hong Kong is listed as one of the safest countries in the world by different publications and organisations. The city is a relatively crime-free society where people rarely fear for their personal safety.

World Class Infrastructure

Hong Kong enjoys some of the most advanced business infrastructures in the world. Businesses and companies can take advantage of the leading business infrastructures in place to maximise their opportunities throughout the region.

International Access
The multi-award winning Hong Kong International Airport is the world’s busiest cargo gateway and one of the busiest passenger airports. Getting between the city and the airport only takes 23 minutes via the Airport Express and in-town check-in is available for those seeking maximum convenience. A Three-Runway System is being constructed to meet anticipated air traffic demand at least up to 2030. 

Convenient Public Transport
Hong Kong is one of the easiest cities to travel around thanks to its abundance of low-cost public transport options. With one of the world’s most reliable and efficient transport systems, commuters can choose from buses, ferries, taxis, trains and trams to reach their destination. Whether meeting clients or travelling to work, Hong Kong’s transport system has created a truly connected city that businesses can benefit from.  

Complete Internet Coverage
Businesses can enjoy reliable and secure communications throughout the territory. With the city having made great investments in its broadband and fiber-optic infrastructure, everyone is able to reap the benefits of a reliable, high-speed internet connection. 

World Leading Logistics
Hong Kong has long been one of the world’s leading sea and air cargo hubs. Advanced port and air cargo facilities has ensured Hong Kong’s place as one of the largest trading entities in the world whilst also servicing a large portion of cargo in and out of Mainland China. 

Express Rail Link
The Guangzhou-Shenzhen-Hong Kong Express Rail Link runs from the terminus at Hong Kong West Kowloon Station to the Shenzhen boundary in 14 minutes and shortens travelling time to Guangzhou to 46 minutes. 

Hong Kong-Zhuhai-Macao Bridge
The 55km-long bridge is the longest bridge-tunnel sea crossing in the world. It connect Guangdong, Hong Kong and Macao and brings the Western Pearl River Delta region to within a three-hour drive of Hong Kong.