Hong Kong: The Gateway to China Hong Kong s Role in Growing Your Business in Asia

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1 Welcome to Hong Kong Hong Kong: The Gateway to China Hong Kong s Role in Growing Your Business in Asia Gus Franklyn-Bute

2 About InvestHK The Department for Foreign Direct Investment Support overseas, Mainland and Taiwanese businesses to set up and expand in Hong Kong Our aim is for companies to make an informed choice and put the right part of your business in Hong Kong for the right reasons in order to be more competitive and make more profit Provide free advice and customized services to help your business succeed Relevant up-to-date information Facilitation of set-up / expansion Matchmaking and networking support Public relations support for launch / expansion

3 3 Markets, 3 Opportunities for Estonian Businesses 1. Three (3) Markets Hong Kong > A dynamic consumer market Hong Kong + Mainland China Hong Kong + Asia 2. Business or Operational Functions - E.g. Sales and Marketing Research & Development Sourcing and Procurement Regional Office/Regional HQ Management Treasury Functions 3. Low Tax or No Tax

4 Hong Kong Dynamic consumer market Free port no import or export tariffs on most goods No sales tax maximise consumer business opportunities Hong Kong loves to shop total retail sales in 2010 at HK$324.9 billion, an 18.3% increase over 2009 Maximise brand and product exposure to more than 36 million (and growing!) visitors to Hong Kong With over 22 million Mainland Chinese visitors, Hong Kong is the shop window for Mainland consumers World-class logistics, infrastructure and financial services to support and help develop consumer activities in Hong Kong and Asia Large pool of tri-lingual and capable talent with international experience to help your consumer business Hong Kong a testing ground before entering Mainland China minimising risk

5 Hong Kong + China Gateway to the Mainland No other city in the world can help overseas investors manage the risks inherent in entering Chinese Mainland markets as well as Hong Kong Source: E.E. Scott, First Choice Hong Kong Your Asia Pacific Platform

6 China opportunities Supporting China s development Raising capital, upgrading corporate skills, international exposure, testing/tailoring products Leisure & business visitors 36 million visitors in 2010, fuelling retail, leisure, hospitality sectors 22.7 million from mainland China Closer Economic Partnership Arrangement (CEPA) Double Taxation Agreement RMB trade settlement, RMB Banking and RMB bond issue

7 Major Fund Raising Centre for Mainland Companies Source: HKEx

8 Hong Kong + Asia Opportunities

9 RHQs / ROs / LOs in Hong Kong No. 7,000 6,000 5,943 6,272 6,354 6,440 6,612 6,397 6,561 5,000 5,414 4,000 4,467 4,867 3,000 2,000 1, Year RHQs ROs LOs Total Source: C&SD

10 Hong Kong: How to use the Hong Kong Advantage Most common business activities by overseas businesses Sales and Marketing e.g. local and region sales and marketing operation to promote your own products and services to international buyers Research & Development e.g. HK Science Park, Cyberport, testing new retail product Sourcing and Procurement e.g. access of most dynamic exhibitions, fairs, and events to obtain newest products Regional Office/Regional HQ Management e.g. location to manage Far East agents, suppliers and manufacturing Treasury Functions e.g. Regional or Global Financial and Foreign Exchange Management

11 Hong Kong offers Business Freedom Level playing field for all No foreign ownership rules Rule of law, low corruption Freely transferable currency Freedom of information Advanced infrastructure Low tax or no tax!

12 Forbes Tax Misery Index 2009

13 Hong Kong Low Tax Regime Corporate Tax Cut to 16.5%; Income Tax Cut to 15% Hong Kong Singapore Mainland China Corporate tax 16.5% maximum rate 17% maximum rate Standard rate = 25% High/New Tech Enterprises (HNTE) = 15% HNTE some regions 0% Income tax 15% maximum rate (salaries) 20% maximum rate 5-45% VAT/GST Nil 7% Certain exemptions apply Income not subject to tax Withholding tax Offshore income; dividends; capital gains; tax exemption for interest income from deposits placed with authorised financial institutions Nil for dividends, management fees, interest, rent 5.25% for royalties Certain remitted income; certain shipping income; certain Singapore dividends; prescribed income of foreign investors arising from certain funds; capital gains Nil for dividends 10% for royalties 15% for interest 20% for directors 17% Certain exemptions apply All income subject to tax (certain preferential tax treatments for foreign-invested enterprises) 10% for dividends 10% for royalties 10% for interest 10% for capital gains

14 InvestHK Sector Specialist Teams Business & Professional Service Consumer Products Financial Services ICT Innovation &Technology Creative Industries Tourism & Hospitality Transportation & Industrial

15 Invest Hong Kong: how we can help Enjoy our free services Latest information on business environment and opportunities Contacts for all aspects of business establishment Arranging tailored visit programmes Support and assistance with visa applications, trade regulations etc. Public relations services during your launch/expansion Advice on settling in Hong Kong housing, schooling, healthcare

16 Thank you! InvestHK London Gus Franklyn-Bute +44 (0)