Hong Kong Remains Location Of Choice For Regional HQs
by Mary Swire, Tax-News.com, Hong Kong
22 October 2003

Despite the SARS outbreak earlier this year and the difficult economic environment both locally and internationally, Hong Kong has remained the location of choice for global corporations with an Asian presence, according to recent government statistics.

As of June 2, 2003, there were 966 regional headquarters in Hong Kong of companies incorporated outside the jurisdiction, according to results of the 2003 Annual Survey of Regional Offices Representing Overseas Companies in Hong Kong, which was conducted by the Census and Statistics Department. The corresponding figure for June 1, 2002 was 948 regional headquarters.

Among the factors affecting the choice of location for the establishment of regional headquarters and regional offices, a low and simple tax system was considered as the most important. Other important factors included free flow of information, political stability and security, corruption-free government, and rule of law and independent judiciary. All of these aspects were rated by more than half of the companies questioned as favourable in Hong Kong.

The major lines of business of the firms with regional headquarters in Hong Kong were wholesale, retail and import/export trades, and business services. Other major lines of business included finance and banking, manufacturing, and transport and related services.

As with regional headquarters, the United States also topped the list of countries with firms which have regional offices in Hong Kong. A total of 498 American companies had regional offices in Hong Kong in 2003. Japan was next, with 442 companies, followed by the United Kingdom, with 196.

"The fact that the number of regional headquarters and regional offices in Hong Kong has continued to increase demonstrates that Hong Kong's economy is on the track towards recovery," observed Mike Rowse, Director-General of Investment Promotion at Invest Hong Kong.

"The signing of CEPA also creates considerable potential for Hong Kong to strengthen its position as a centre for value-added manufacturing and high quality services for the China market," added Mr Rowse. "We expect that this will attract more companies to invest here and increase their presence in Hong Kong."

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