Hong Kong: Offshore Business Sectors
The chief factors driving Hong Kong's economic success are a combination of its non-discriminatory low tax regime under which only income derived from or arising in the jurisdiction is taxable and its geographical proximity and historical entrepot role for western trade with and investment into mainland China.
This section of the site describes the most important types of international business activity carried out from the SAR.
While Hong Kong has a large and vibrant local business community, it is also home to the largest community of multinational firms in Asia. This is in part due to the territory's colonial roots, which have for the past 150 years made it the natural hub in Asia for British companies, and, in part, to its consistent and longstanding reputation for openness, simplicity of operation and institutional familiarity. As a result, several thousand multinational companies maintain regional offices or headquarters in the territory.
Hong Kong is one of the world's leading centres for overseas firms. Over 200 of the Fortune 500 companies have a presence in the territory. The American Chamber of Commerce in Hong Kong, with more than 1,100 corporate members, is the largest American Chamber outside of North America. The Japanese Chamber in Hong Kong reports that more than 2,000 Japanese companies operate from the territory.
In July 2011, the Companies Registry reported that the number of companies registered under the Companies Ordinance had passed 900,000.
A total of 77,991 new local companies were registered during the first half of 2011, an increase of 8.53% over the second half of 2010, and 15.25% more than in the first half of 2010.
As regards non-Hong Kong companies that established a place of business in Hong Kong and were newly registered under Part XI of the Companies Ordinance, 402 were registered in the first half of 2011, up 14.86% from 350 in the corresponding period of 2010. The total number of non-Hong Kong companies registered stood at 8,342 by the end of June 2011.
"The first company in the history of Hong Kong was incorporated in 1865 and the number of company incorporations has been increasing rapidly. The 500,000th company was incorporated in 1994. It was only five years ago that the one-millionth company was incorporated in 2005," said the Registrar of Companies, Ms Ada Chung.
The total number of overseas and Mainland Chinese parent companies running business operations in Hong Kong recorded its highest level to date in 2011, as, in particular, did the number of those operating regional headquarters.
By June 2011, the total number of foreign parent companies with operations in Hong Kong had reached 6,948 companies, a 5.9% increase from 2010. Within that total, the number of regional headquarters was 1,340, an increase of 4.3%.
Hong Kong is a major transshipment and re-export centre, activities which in turn fuel strong demand for trade support services such as banking and financing. In the wake of the Asian financial crisis new laws were passed which encourage financial transparency such as the Organized and Serious Crimes (Amendment) Ordinance which came into operation in June, 2000. The law requires money changers and remittance agents to follow anti-money laundering measures such as customer identification and keeping transaction records for transactions over HKD8,000. It has helped to prevent criminals from using non-bank financial businesses as conduits for money laundering.