April 2011
Quarterly Issue : 2/2011
NEWSLETTER
The International Business Center … IBC is approaching its 25th Anniversary this year.
We are continuing with the second Newsletter issue of this New Year with a profile of Hong Kong together with some identified business opportunities chosen by industry category and have added some useful points to note when doing business in Hong Kong. We also explore why you need to set up a company in Hong Kong when transacting business in China and describe other professional services that we offer as part of being a long established International Business Center.
Profile of Hong Kong
The geographical, climatic, political, social, economic and demographic background of Hong Kong was described in our Quarterly Issue 1/2011 in January of this year.
Hong Kong is a city of 7 million inhabitants that has the 39th biggest GDP in the world, and is thus bigger than Israel, New Zealand and Singapore. The per capita GDP is USD45,600 with an estimated growth of 5.7% (est. 2010). The service sector accounts for over 90% of GDP. It is the world’s most service-oriented economy.
(Source of Information: The World Factbook, Central Intelligence Agency, British Consulate-General Hong Kong, and Census and Statistics Department, Hong Kong SAR Government)
Business Opportunities in Hong Kong
We previously discussed Financial & Professional Services, Construction & Engineering, and Education & Training in our Quarterly Issue 1/2011. In this new issue of our newsletter, we shall discuss three more industrial opportunities in Hong Kong:
- Environment Protection
- Aerospace Industry
- Railway Industry
The Hong Kong SAR Government has pledged to a 5-year USD12 million for a Cleaner Production Partnership Programme helping Hong Kong owned factories in the Pearl River Delta to adopt cleaner production technologies and practices.
Financial incentives are provided to Hong Kong companies to improve their technology, including a 100% tax deduction for capital expenditure on environmental protection machinery, and the reduction of the depreciation period for environmental protection installation from 25 years to just 5. Tax incentives are also applicable to electric vehicles.
In 2009, 46.1 million passengers and 3.35 million tonnes of air cargo made use of the Hong Kong International Airport. Every day, there are some 800 aircraft flying in and out with around 90 airlines in operation, linking Hong Kong with approximately 150 destinations globally, including more than 40 cities on the Chinese Mainland
The Hong Kong International Airport Authority is considering building a 3rd runway while it also has the exclusive right to manage and operate the Zhuhai Airport for 20 years commencing from August 2008.
The 3rd Hong Kong Asian Aerospace Expo & Congress was held on 8th – 10th of March, 2011. The status of Asian Aerospace as the region’s premier commercial air transport event has been dramatically demonstrated with the number of VIP delegates up more than 130% over the 2009 show and the number of Chinese delegations up over 50%. Overall attendance at Asian Aerospace over three days reached a record high of 12,300 delegates, with a further 5,300 attending the Asian Business Aviation event.
Hong Kong is spending USD17 billion on five railway projects. These are the new West Island Line, South Island Line (east), Shatin-Central Link, Kwun Tong Line Extension, and the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link. The Hong Kong MTR Corporation (MTRC) is the sole railway operator.
MTRC has an ongoing programme to renovate and upgrade the existing facilities. The corporation has a constant stream of procurement activity across the full range of railway-related products and services. It also provides consultancy services to China and overseas countries in the scope of operation & maintenance services, project management, rolling stock engineering, signaling engineering, infrastructure maintenance & engineering, non-fare business & marketing, safety & system assurance, transport planning & operations, and training services.
(Source of Information: UK Trade & Investment, Asian Aerospace International Expo and Congress 2011, and Mass Transit Railway Corporation)
Doing Business in Hong Kong
Following on from our last newsletter Quarterly Issue 1/2011 in January 2011, we can further share the business opportunities in Hong Kong. Not only is Hong Kong an attractive market in its own right and a springboard into the Mainland Chinese market, it is also an ideal base for regional operators.
Hong Kong is situated in a prime central position in East Asia, with half of the world’s population within a 5-hour flying time. Obvious strengths of the market are:
- It is an easy place to do business – strong rule of Basic Law (originated from English common law), open, transparent Government, and free flow of information.
- English is one of the official languages and is widely used in the business environment.
- It is a springboard to Mainland China and the wider Asia Pacific region.
- It is the world’s most service-oriented economy, with services accounting for over 90% of GDP.
- It has the world’s busiest airport for international cargo and the world’s 3rd busiest container port.
The growth of the Mainland Chinese market offers excellent opportunities for foreign businesses looking to internationalise while approaching this market directly can be a daunting prospect. As a major service gateway into China, Hong Kong is an attractive indirect route, offering significant trade advantages and easy access with CEPA. You will find similar business systems to the western world, intellectual property protection, proximity to the Pearl River Delta, with knowledgeable well established agents and distributors available to assist newcomers.
(Source of Information: UK Trade & Investment, Customs and Excise Department, Trade and Industry Department, Hong Kong SAR Government)
Gateway to China
First discussed in our Quarterly Issue 1/2011 in January, this year, Hong Kong is the best business “Gateway to China”. Despite its impressive economic growth over the past three decades, China still has concerns for many foreign enterprises. In general, the bureaucratic process, regulatory difficulties and the lack of transparency in a developing legal system, together with concerns over intellectual property rights protection encourage foreign companies to look for alternatives.
Hong Kong is thus regarded as the natural entry point for access to the Mainland Chinese market. There is abundant information and research facilities available with well qualified high caliber personnel who have experience in dealing with China and can bridge the cultural and linguistic barriers. In the realms of CEPA, businesses benefit from a growing number of free-trade tariffs and benefits specifically available only between Hong Kong and the Mainland.
Hong Kong taxes are low, simple, and straight forward. Salaries tax ranges from 2% to 17% while the profits tax rate is just 16.5% and property tax 16%. There is neither capital gains tax nor tax on dividends. Thankfully there is no GST or VAT so that Hong Kong is truly a shoppers’ paradise.
(Source of Information: Establish Hong Kong)
We Offer Helpful And Effeicent Professional Services
As a long established business center we provide information and support to our clients for matters related to all of the above mentioned topics. As our core business we offer business center facilities on very flexible term leases for a wide choice of fully serviced offices. In addition we provide Business Identity Programmes (BIP) to cater for the needs of those companies or individuals who simply require a virtual office. With support from the 14 IBC (International Business Center) Group Companies we are also able to render a comprehensive range of professional services:
- All Accountancy Services
- Secretarial services
- Business Plans / Marketing Plans
- Franchise Building & Development
- Brand Building & Development
- Marketing Services / Event Management
- Profitability Consultancy
- Mergers & Acquisitions
- Organisation & Methods
- Operating Procedure Manuals
- Due Diligence
- Internal Control Review
- Website Building & Maintenance
- Short Video Production
- 2D & 3D Media Design Services
- Data protection and Storage
Should you need to know anything more about Hong Kong and our International Business Center, please contact us at our website. Alternatively you are always welcome to call us at +852 2268 6888 (Hong Kong is GMT +8:00 hours).
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