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Hong Kong Plugs Its Advantages To ASEAN

by Mary Swire, Lowtax.net, Hong Kong
05 August, 2014

On August 1, Hong Kong's Financial Secretary, John Tsang, attended the 7th Association of Southeast Asian Nations (ASEAN) and Asia Forum in Singapore, and outlined the multiple roles of the city as the gateway to China and a global business, financial, aviation, and logistics center.

He encouraged ASEAN entrepreneurs to do business "in Hong Kong, with Hong Kong and through Hong Kong." As Hong Kong is eager to enhance economic ties with ASEAN economies, he also welcomed the start of negotiations on the ASEAN-Hong Kong free trade agreement (FTA), the early and successful conclusion of which, he said, would enable entrepreneurs in Asia to reap the rewards of greater regional co-operation.

He noted that Hong Kong's bilateral trade with ASEAN "has seen a steady growth of ten percent per annum from 2009 to 2013. ASEAN is now our second largest trading partner in terms of goods, fourth largest partner in terms of services, fifth largest destination for foreign direct investment (FDI) from Hong Kong, and sixth largest source of FDI into Hong Kong."

Tsang also emphasized that Hong Kong is "the premier platform for Mainland capital and enterprises to reach out to world markets. Currently, some 60 percent of FDI into the Mainland originates from Hong Kong, and more than 50 percent of the Mainland's overseas FDI is destined to or channeled through our city."

He pointed out the fact that numerous leading indices and surveys highlight "that Hong Kong, like Singapore, is one of the best places to do business as well as a good partner for ASEAN firms to do business jointly in our region and beyond."

"Hong Kong has a low and simple tax system," he added: "We have no value added tax, no goods and services tax, no inheritance tax, no capital gains tax, no withholding tax on dividends or interest. We don't even tax our wine imports. … We are a duty-free port, and we encourage free flows of people, capital and information."

"What's more," Tsang continued, "foreign companies incorporated in Hong Kong can take advantage of our trade agreements with other economies. For example, ASEAN investors can also enjoy the benefits accorded the Mainland and Hong Kong Closer Economic Partnership Arrangement, [which] offers any qualified company registered in Hong Kong, irrespective of country of origin, preferential access to the Mainland market, including tariff-free exports to the Mainland for all goods made in Hong Kong, as well as over 400 preferential benefits to Hong Kong service providers engaged in a wide array of services."

"By eliminating trade barriers," he concluded, "the Hong Kong-ASEAN FTA will help facilitate the flow of goods, services and investment among all parties concerned. That will enhance the co-operation of ASEAN and Hong Kong in the essential global supply chains and raise our collective competitive edge on the global stage."

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