Hong Kong offers an unusually stable and efficient business environment with the modern infrastructure and telecommunications that could be expected of the world's 9th largest economy. The territory's economy could rightly be described as the most laissez faire economy in the world. The government's policy is strictly non-interventionist.
Government controls and disclosure requirements on businesses are minimal, except for public limited companies. There are only minimal capitalisation requirements for private companies and financial statements need not be filed if a company incorporates as a wholly-owned subsidiary in Hong Kong. Six month visas are normally granted to intending residents with employment, and holders of dependant visas (like spouses and children) are allowed to accept employment with no special consents. Hong Kong has no compulsory union membership and copyright laws essentially follow those of the United Kingdom, with Hong Kong a party to the Paris Convention.
Although a special administrative region of China the territory is a British common law jurisdiction which recognises the concept of a trust. British and Hong Kong company and trust law are virtually identical and the tight secrecy, minimal corporate disclosure and loose administrative requirements that characterise some offshore island common law jurisdictions either do not apply or have little significance in the territory. In any event Hong Kong does not consider itself an offshore centre in the traditional sense of the word.
Bankers, accountants, lawyers and other professionals who serve multinational firms have thrived in a community of local firms that has become increasingly transnational since the opening of the Mainland to foreign trade and investment in the late 1970s. This deep-rooted local familiarity with the needs of international business makes Hong Kong an easy place in which to find joint-venture partners and to find expatriate professionals. Local staff can easily be recruited from local companies which have a ready familiarity with the dispersed operating needs of a multinational business.
Hong Kong is unsurpassed in the extent to which it brings local and overseas firms together into a single business community. The constant interaction between thousands of overseas firms and local businesses in a supercharged business environment generates growth opportunities for both sides in setting up international networks, entering new lines of business, finding new sources of supply and new markets and linking up with business partners from Hong Kong, China and elsewhere.
According to the results of the 2007 Annual Survey of Regional Offices Representing Overseas Companies in Hong Kong, conducted by the Census and Statistics Department, there were 1,246 regional headquarters (RHQs) and 2,644 regional offices (ROs) of companies incorporated outside the territory located in Hong Kong as of June 1, 2007. This compares to 966 RHQs and 2,241 ROs at the same point in 2003, the survey noted.
The United States topped the list of countries/territories with companies that have RHQs in Hong Kong, with a total of 298, followed by Japan with 232, UK with 124 and mainland China with 93 firms.
There were 47,417 new local companies registered under the Hong Kong Companies Ordinance in the first six months of 2007, up 19.12% on the same period last year, 32 newly listed companies on the Main Board. The total number of live companies registered was 622,318,
Companies Registry statistics show that 316 new overseas companies established a place of business in Hong Kong and registered under Part XI of the Companies Ordinance in the first half of 2007, up 12.46% on the same period last year. The total number of overseas companies stood at 7,854.
In 2008 however, there was a slight dip in registrations. The number of new local companies registered in 2008 decreased by 2.1%, from 100,761 in 2007 to 98,645 at the end of 2008. By the end of 2008, the total number of live local companies registered under the Companies Ordinance was 710,766, up 55,728 from that in 2007.
As regards to non-Hong Kong companies that have established a place of business in Hong Kong, 872 had registered under Part XI of the Companies Ordinance in 2008, an increase of 16.58% from 748 in 2007. The total number of non-Hong Kong companies stood at 8,487 at the end of 2008, 406 more than in 2007.
Hong Kong is a relatively expensive jurisdiction. At the time of writing, professional charges for initial incorporation may be $1,400; and the provision in the first year of a registered office facility, nominee shareholders, nominee directors and nominee secretary costs $1,300. Thereafter annual running costs which include attendance to all statutory requirements, the provision of a registered office facility, nominee shareholders, nominee directors and nominee secretary stand at $2,250 per annum. Annual audit, accounting and taxation services are not included in the annual running costs fee since they vary, are charged on a time cost basis and so must be negotiated and billed separately.
After a slump in property values and costs in 2001-2003, in 2006 Hong Kong leaped up the global office occupancy costs league table and entered the top three most expensive office locations in the world, according to a survey by DTZ, the global property adviser.
DTZ’s ninth annual Global Office Occupancy Costs survey is a guide to accommodation costs in major prime office locations covering 117 business districts in 46 countries worldwide. It found that the West End of London maintained its position as the world's most expensive office location with occupancy costs of $18,740 per workstation per year. Washington DC climbed two spaces to become the second most expensive location with occupancy costs of $15,370.
However, according to DTZ, the most notable finding was the rate at which office occupancy costs have increased in Hong Kong, posting a 61% increase over the last decade to $15,000 per workstation per year. This resulted in the city climbing 13 places to become the world’s third most expensive location.
The report cites Hong Kong's positive business sentiment, especially among investment banks, who have displayed a greater willingness to pay for better quality offices, as one reason why office costs have soared in recent years. However, DTZ also blames the rising costs on a lack of new Grade A office space coming on to the market.