Although it has been a special administrative region of the People’s Republic of China since July 1997, Hong Kong is considered to be the freest market in the world. As such it is a central business hub, not just for East Asia but for the planet. Its proximity and relationship to China, combined with extremely business-friendly taxes and regulations, make it an ideal location for global business in the 21st Century.
Relationship with China
China is now the second largest economy in the world and its importance cannot be ignored. While some western companies have set up outposts on the Chinese mainland, strict regulations can make it an uncomfortable environment and one that is hard for foreign-owned businesses to break into. That is why many prefer to be based in Hong Kong, where a business trip to Beijing or Shanghai can be accomplished in a single day. Hong Kong is increasingly looking towards serving the Chinese economy, while maintaining a liberal economic and regulatory framework that is the envy of many western states.
Hong Kong is a world center for banking and finance, and money flows freely in and out of the country. It’s easy to send a secure money transfer to Hong Kong from the US, and there are no state controls on taking money out of the territory. The Hong Kong dollar is fully convertible and is pegged to the US dollar, making it one of the safest and strongest currencies in the region. Its value is allowed to fluctuate between 7.75 HKD to 7.85 HKD for every $1 US.
Alongside its role as a world finance center, Hong Kong is also extremely welcoming to both domestic and foreign-owned business ventures. The top rate of tax is a very reasonable 17%, with a flat 16.5% corporate income tax applied across the board. There are no restrictions on taking profits made in Hong Kong out of the country, or on converting them to other currencies. It’s possible to set up a company and be doing business in one to three days, and the city is known for its excellent infrastructure and tech support.
It’s just as easy to physically get in and out of Hong Kong as it is to transfer money. With one of the world’s leading international airports and close transport links to China and other territories in East and South-East Asia, Hong Kong is the perfect base for making connections throughout this increasingly important economic region. Developing countries across Asia are becoming more prosperous and are adopting a more open attitude to global business as their growing middle-class aspires to a more comfortable and technologically assisted lifestyle.
Despite recent unrest and political concerns, Hong Kong remains the most significant business hub in one of the most important economic regions of the world. As a doorway to both China and the South-East Asian economic community, Hong Kong is still one of the best business locations on the planet.