GuideMe Hong Kong

Hong Kong’s Company Registry (HKCR) has recently announced that the number of companies that chose Hong Kong incorporation has surpassed the 900,000 mark in June 2011. As many as 912,242 company registrations were recorded as of last month, representing an increase of 48,480 registrations from 2010. Early this month, we have discussed how Hong Kong has seen unprecedented company incorporation from mainland China. The latest figures from HKCR show that the total number of overseas companies in Hong Kong has grown by almost 15% from 350 to 402 between the first half of 2010 and the first half of this year. Altogether, the number foreign-incorporated companies in Hong Kong has risen to 8,342 by the end of June 2011. 

It is not surprising that the growth in Hong Kong company incorporation has remained bullish this year in spite of the slew of “bad” news surrounding the city’s political and business climate in recent months. Although Hong Kong currently faces currency depreciation and fluctuations in the property market, it has consistently updated its policies to maintain its reputation as a business-friendly environment for enterprises, local and foreign alike.

For example, the Hong Kong government has recently announced its plans to update the Competition Bill. This move will ensure that the playing field for Hong Kong SMEs is levelled and the abuse of market power by larger companies is eradicated. This effort is therefore a testament to Hong Kong’s commitment to boost its economic competitiveness by way of addressing the needs of Hong Kong’s business community. The Hong Kong government has also announced its move to review the Companies Bill which was introduced into the HKLegCo (Legislative Council) early this year. The updated Bill, which will be presented during the 2011-2012 legislation session, is set to leverage Hong Kong’s already laudable position as a bustling business and financial center.

Additionally, in March this year, HKCR has introduced a new e-Registry platform to ease and speed up the process of company registration. The e-Registry demonstrates a “one face to the customer” approach, enabling businesses to receive both the Certificate of Incorporation and Business Registration Certificate within 24 hours. By the end of June, 5,576 companies have been able to achieve Hong Kong company incorporation via the e-Registry platform.

On top of adopting game-changing business policies, Hong Kong offers attractive incentives for enterprises to set up shop in the city.  Hong Kong offers an irresistible flat corporate tax rate of 16.5% on assessable profits. It also offers a liberal immigration policy that is aimed to attract highly-talented professionals and investors to relocate to the city. In fact, these two factors have been crucial in placing Hong Kong as the second most innovative economy in Asia in INSEAD’s recently published ‘Global Innovation Index 2011’.

Last but not least, Hong Kong’s connectedness to major economies worldwide have inspired business confidence in entrepreneurs who wish to set up a Hong Kong subsidiary or
Hong Kong branch office. Hong Kong has recently signed Free Trade Agreement (FTAs) with European Free Trade Association (EFTA) states – Iceland, Liechtenstein, Norway and Switzerland. The agreement, which will be in effect in mid-2012, will allow Hong Kong-incorporated enterprises to tap EFTA markets and conduct business without having to face discriminatory trade barriers. Hong Kong companies also have the advantage to access mainland China’s vast markets due to the Mainland-Hong Kong Closer Economic Partnership Arrangement (CEPA).

Altogether, Hong Kong’s ongoing prosperity in spite of varying odds is a product of a transparent and resilient jurisdiction that continually keeps itself abreast with the needs of its business community. Its zero-tolerance policy on corruption and its intimate partnerships with major economies are added anchors that make it a popular business destination and secure its imminent economic prosperity.