Hong Kong Attracted Record Numbers Of Foreign Firms in 2004

by Mary Swire, Tax-News.com, Hong Kong

10 January 2005

Hong Kong attracted a record number of foreign companies during 2004, the government body responsible for promoting the jurisdiction to multinational firms has announced.

In a press conference held last week, Mike Rowse, Director-General of Investment Promotion at Invest Hong Kong, explained that the department helped to assist 205 firms set up or expand operations in Hong Kong during 2004, representing a 44% rise on the 2003 figure – itself a record year.

These projects led to the immediate creation of more than 3,000 jobs, and the same companies plan to create an additional 4,600 jobs in the territory during the next two years, with more than HK$4.66 billion (US$598 million) already having been invested in Hong Kong by the firms.

“These investment projects do not only bring in capital, create job opportunities, but also bring along new ideas and technologies to enrich various industries in Hong Kong,” noted Mr Rowse.

"These companies have given their vote of confidence in our city and are committed to developing their business with our community,” he added.

The number of regional headquarters and regional offices in Hong Kong also reached an all time high in 2004.

As at 1 June, 2004, there were 1,098 regional headquarters (RHQs) and 2,511 regional offices (ROs) in Hong Kong of companies incorporated outside of the SAR, according to the results of the 2004 Annual Survey of Regional Offices Representing Overseas Companies in Hong Kong conducted by the Census and Statistics Department.

Looking back at the highlights of 2004, Rowse observed that one notable coup for the department was the decision by the world’s largest data storage company, EMC, to move its Asia-Pacific HQ to Hong Kong. The city also attracted many firms in the legal and investment fields, including SG Fafalen & Co, the first Swiss law firm to set up in Hong Kong, and Oppenheimer Funds, which intends to use the territory as a base to develop its Asia-Pacific business.

"These encouraging figures show that investors still regard Hong Kong as the ideal location to operate their businesses in the region. Hong Kong's fundamental advantages including the free flow of information and low tax regime remain major attractions for foreign companies,” commented Mr Rowse.

Furthermore, new figures have revealed that Hong Kong has maintained its position as one of the preferred destinations for Foreign Direct Investment (FDI), and the ‘World Investment Report 2004’, released by the United Nations Conference on Trade and Development (UNCTAD), shows that Hong Kong remained the second largest FDI recipient in Asia, after the Mainland.

Despite SARS and significant economic challenges, the FDI flow to Hong Kong in 2003 reached US$13.6 billion (HK$106.3 billion), up by 40% from an adjusted US$9.7 billion in 2002.

Recommended