Hong Kong’s legal framework and high per capita income attracts foreign franchisors looking to sub-franchise. It is relatively easy to set up a foreign franchise operation in Hong Kong as there is no specific legislation governing franchising operations, no foreign exchange controls, and no foreign equity participation or local management participation regulations.
Disputes arising from a franchise agreement are subject to common law (and specifically to contract law) and to legislation relating to licensing, protection of intellectual property rights, and registration of trademarks/service marks. In recent years, several U.S. franchises have established relationships with Hong Kongbased firms to develop the mainland China market. See Chapter 4: “Leading Sectors for U.S. Export and Investment” for more information on franchising in Hong Kong.