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Hong Kong continues to be the top choice of location for overseas and Mainland companies to manage their regional businesses, according to annual survey jointly released by Invest Hong Kong and the Census and Statistics Department (C&SD) earlier today (October 6).
According to the results of the "2008 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong" conducted by the C&SD, Hong Kong was host to 6,612 overseas and Mainland companies representing parent companies located outside Hong Kong, as at June 2, 2008. This represents an increase of 2.7% from 2007. 3,882 of these companies served as regional headquarters or offices.
Mr Mike Rowse, Director-General of Investment Promotion at Invest Hong Kong welcomed the results. He said, "The figure of 6,612 companies is an all-time high. This is a strong vote of confidence in Hong Kong's role as Asia's leading business hub."
"In recent years, two emerging trends have further strengthened Hong Kong's status as a regional and even international hub: more multinationals have upgraded their Hong Kong operation by adding regional and even global responsibilities, while more and more Mainland companies have established local offices here to capture the business opportunities Hong Kong has to offer. ¡¨
"We at Invest Hong Kong cannot and will not be complacent. The competition is getting stronger in the region, so investors have more choices. Given the recent global financial difficulties and uncertain economic outlook, companies may delay overseas investments or even reduce the size of their operations. We therefore have to work even harder to attract and retain investors from all over the world," Mr Rowse added.
Survey Highlights
As at June 2, 2008, there were 1,298 regional headquarters (RHQs), 2,584 regional offices (ROs) and 2,730 local offices (LOs) in Hong Kong representing their parent companies located outside Hong Kong.
Regional Headquarters
The United States topped the list of countries/territories with RHQs in Hong Kong (311), followed by Japan (238), and the United Kingdom (119). The major lines of business of RHQs were wholesale, retail and import/export trades; business services (excluding information technology); and transport and related services. They employed some 142,000 persons in Hong Kong.
Regional Offices
The United States also topped the list of countries/territories with ROs in Hong Kong (612), followed by Japan (494) and the United Kingdom (234). The major lines of business of ROs were wholesale, retail and import/export trades; business services (excluding information technology); and finance and banking. They employed some 97,000 persons in Hong Kong.
Local Offices
The mainland of China topped the list of countries/territories with LOs in Hong Kong (499), followed by the United States (452) and Japan (440). The major lines of business of LOs were wholesale, retail and import/export trades; finance and banking; and business services (excluding information technology). They employed some 131,000 persons in Hong Kong.
Key favourable factors affecting the choice of Hong Kong as a location for RHQ/RO/LO (in descending order of favourableness rating)
(1) Simple tax system and low tax rate;
(2) Free flow of information;
(3) Absence of exchange controls;
(4) Corruption¡Vfree government;
(5) Communication, transport and other infrastructure;
(6) Free port status;
(7) Political stability and security;
(8) Geographical location;
(9) Rule of law and independent judiciary;
(10) Availability of business services and professional support services.
They were regarded by some 60% to 70% of the companies as favourable factors for Hong Kong.
Unfavourable factors for Hong Kong
Relatively more companies (about 30%) considered the availability and cost of residential and business accommodation, while over 10% of the companies regarded them as favourable factors.
Overall business environment
Some 70% of RHQ/RO/LOs considered that, comparing June 2008 with June 2007, the overall business environment in Hong Kong remained the same or had improved.
Survey Definitions
Regional Headquarters
- an office that has managerial control over offices in the region (i.e. Hong Kong plus one or more other places) on behalf of its parent company located outside Hong Kong.
Regional Office
- an office that coordinates offices and/or operations in the region (i.e. Hong Kong plus one or more other places) on behalf of its parent company located outside Hong Kong.
Local Office
- an office that only takes charge of the business in Hong Kong (but nowhere else) on behalf of its parent company located outside Hong Kong.
Survey Methodology
Owing to the lack of a complete frame of companies covered in the survey, the number of RHQs, ROs and LOs enumerated in each survey round represents only the best snapshot that could be taken at the time of the survey. Coupled with the voluntary nature of the survey, changes between years in the number of RHQs, ROs and LOs may be affected by the continuous improvement in the frame of companies and response rate, and hence should be interpreted with care. However, it should be noted that since 2003, a high response rate of 98% or above has been achieved in each round of the survey, so that the effect of response rate is relatively insignificant.
The survey only covers companies that manage business in Hong Kong on behalf of their parent companies located outside Hong Kong. It does not cover companies which are funded by investment from outside Hong Kong and manage the business in Hong Kong independently but not on behalf of the investors. Hence, the total number of RHQs, ROs and LOs in Hong Kong does not represent all companies with investment from outside Hong Kong.
The survey results are published in greater detail in the "Report on 2008 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong" by C&SD. The publication is now available for download free of charge at www.censtatd.gov.hk/products_and_services/products/publications/index.jsp. The print version of the publication will be available for sale at HK$33 per copy in early November 2008. Enquiries about the survey results may be directed to the Business Expectation Statistics Section of the Census and Statistics Department (Tel. 2805 6112).
About Invest Hong Kong
InvestHK is the award-winning department of the Hong Kong Special Administrative Region Government responsible for attracting and facilitating inward investment into the city, by providing free services and support to help overseas and Mainland companies establish or expand their business presence in Hong Kong. For more information, please visit www.InvestHK.gov.hk.
Ends/Monday, October 6, 2008
Issued at HKT 13:01
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