Foreign Direct Investment in Hong Kong SAR

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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.


Country Comparison For the Protection of Investors

  Hong Kong East Asia & Pacific United States Germany
Index of Transaction Transparency* 10.0 5.2 7.0 5.0
Index of Manager’s Responsibility** 8.0 4.5 9.0 5.0
Index of Shareholders’ Power*** 9.0 6.3 9.0 5.0
Index of Investor Protection**** 9.0 5.3 8.3 5.0

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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

Source: UNCTAD

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.

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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.
Bilateral Investment Conventions Signed By Hong Kong
Hong Kong has signed bilateral agreements for investments with 15 countries.
To see the list of countries, click here.
To see the agreements, click here.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Yes. Visit
Acquisition of Holdings
Acquisition is authorised, except in certain sectors of activity.
Obligation to Declare
A registration certificate should be requested from Inland Revenue Department (IRD). Foreign Investment Agency in the country keeps you informed about the authorisations necessary for the establishment.
Competent Organization For the Declaration
Companies Registry
Tax authority of Hong Kong (IRD)
Requests For Specific Authorizations
Only some sectors are closed for foreign investors, like communications or other areas of activity considered for public utility.
Find Investment Service Providers in Hong Kong on

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Investment Opportunities

Investment Aid Agency
Invest in HK
Tenders, Projects and Public Procurement
HK Government, E-Tender Box (ETB)
Tenders Info, Tenders in Hong Kong
DgMarket, Tenders Worldwide

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