FDI in Hong Kong SAR
FDI in Figures
According to the “World Investment Report 2010," published by the United Nations Conference on Trade and Development, Hong Kong has risen to the fourth position in the world for foreign direct investments (FDI) in 2009 and maintained the second place in Asia after China.
The FDI fluxes, which have slowed down as an effect of the global recession, have again began to grow in 2010. This tendency will continue, due to the key role which the Asian reagion will play in global growth.
Hong Kong's attraction is due to a number of its strengths: its strategic position which makes the island the access gate to the Chinese market, its status as a free port, its simple and very incentive tax regime, its efficient infrastructure and legal security.
|Foreign Direct Investment||2007||2008||2009|
|FDI Inward Flow (million USD)||54,341||59,621||48,449|
|FDI Stock (million USD)||1,177,536||816,184||912,166|
|Performance Index*, Ranking on 141 Economies||5||2||4|
|Potential Index**, Ranking on 141 Economies||6||5||-|
|Number of Greenfield Investments***||150||216||253|
|FDI Inwards (in % of GFCF****)||130.3||138.9||3.0|
|FDI Stock (in % of GDP)||568.7||379.4||433.2|
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
FDI Inflows By Countries and Industry
|Main Investing Countries||2008, in %|
|British Virgin Islands||32.3|
|Main Invested Sectors||2008, in %|
|Investment Holdings, real-estate services and miscellaneous services||67.5|
|Banks and Deposit companies||11.0|
|Wholesale, retail trade and import/export||9.8|
- Form of Company Preferred By Foreign Investors
- Limited companies, limited partnerships or sole proprietorships.
- Form of Establishment Preferred By Foreign Investors
- Main Foreign Companies
- News on foreign companies established in Hong Kong on the Invest in Hong Kong website, News columns and Events.
- Sources of Statistics
Invest in HK
Why You Should Choose to Invest in Hong Kong
- Strong Points
Hong Kong is an international leader in terms of export and as a services center. The country is also the bridgehead to one of the largest production bases in the world, China. Hong Kong has a sound economy and an efficient financial and banking system.
Favorable tax measures, the transparency of local institutions, political stability, freedom of information, availability of qualified human resources as well as its advantageous geographical location in Asia, all constitute to make Hong-Kong a preferred place for company establishment, as witnessed by the millions of companies registered on the territory. In 2003, the Capital Investment Entrant Scheme (CIES) was launched by the Hong Kong Special Administrative Region (SAR) Government. This scheme aims to facilitate the entry for residence for Foreign investors through capital investment into permissible assets without the need to establish or join in a business.
- Weak Points
Hong Kong has few, yet consequential, negative points against setting up:
- High cost of real estate and work space (offices, shops,etc.);
- High cost of salaries, compared to other Asian countries such as Mainland China and India;
- The question of Hong Kong's future, especially when the town will be completely integrated with the People's Republic of China;
- The excessive importance of the financial sector.
Furthermore, on the whole of the 2008-2009 year, the Hong Kong stock market was highly disturbed. The stock market's main indicator fell by 45%, the lowest in 34 years.
- Government Measures to Motivate or Restrict FDI
- Hong Kong is a free territory for investments, which are in fact encouraged by the government with a favorable taxation policy and light legislation. Foreign companies can be set up freely, register their brands and the Director of the company doesn't have to be a citizen nor resident of Hong Kong.
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