InvestHK Assists Record Number Of Companies

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

23 January 2012

Invest Hong Kong (InvestHK) has announced that it assisted 303 overseas and mainland Chinese companies to set up or expand in Hong Kong in 2011 - the 11th consecutive year that it has beaten its annual target for the number of completed projects.

In announcing the results, InvestHK, which was established in July 2000 to take responsibility for foreign direct investment (FDI) and support overseas and Chinese businesses to set up or expand in Hong Kong, noted that it will closely monitor the rapidly changing global economy in order to prepare for any impact on FDI into Hong Kong.

"We are delighted to have had another record year. The numbers are testament to the enduring advantages of Hong Kong as the preferred location for overseas investors and present a substantial vote of confidence in our city," said the Director-General of Investment Promotion at InvestHK, Simon Galpin. "But looking ahead to 2012, it seems likely to be a challenging year for the global economy. This motivates us to work harder to encourage and support overseas and mainland companies to come to Hong Kong, and reinforces the importance of FDI to our economy."

In fact, the 303 completed projects last year came from 39 countries. Mainland China continued to be the largest single source of investment into Hong Kong with a total of 56 projects, followed by the US with 48 projects, the UK (30), Japan (23) and Australia (19). New additions to the place of origin list are Iceland, Mongolia, Peru, Samoa and Vietnam.

In terms of a breakdown by industry sectors, the top three sectors were tourism and hospitality, transport and industrial, and innovation and technology, respectively. Almost 31% of the 303 companies indicated that the China and Hong Kong Closer Economic Partnership Arrangement was one of their investment considerations last year.

InvestHK confirmed that Hong Kong's international business hub status continues to make it an ideal location in terms of attracting a broad spectrum of companies. For multinationals, 2011 saw the setting up in Hong Kong of global operations for General Electric and Schneider Electric, among others. However, Hong Kong also remained attractive to small and medium-sized enterprises from overseas, largely due to its ready pool of talent and simple business procedures.

Galpin added that the extent of any impact from the global economy on FDI into Hong Kong during 2012 remained uncertain.

"In one scenario, overseas-based investors will increase their presence in Asia Pacific because they are trying to offset tough economic times in their home countries,” he said. “But if the situation worsens so that they have difficulty getting funding, it may delay their expansion plans and hence could pose some impact on FDI into Asia, including Hong Kong."

However, despite this environment, he remains optimistic "on the back of the expansion of our overseas network into Singapore and Brazil, and the investment promotion unit in the new Hong Kong Economic, Trade and Cultural Office in Taipei, which will come online soon".

"This year we will also launch our revamped website, as well as further review and refine our services to ensure that we're responding to the needs of today's fast-moving companies,” Galpin concluded.

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