Hong Kong

The Hong Kong Special Administrative Region (SAR) of the People's Republic of China sits on the eastern side of the Pearl River estuary in East Asia. One of the world’s most significant financial centres, with independent executive, legislative and judiciary powers, Hong Kong ranks as the most competitive global market in which to do business.1

Covid-19 latest information

This guide is an accurate reflection of the pre-Covid-19 business environment in Hong Kong. Please note that due to the current situation, some circumstances may have changed in this market. Figures and data in the guide were last updated in August 2020.

 

Welcome to Hong Kong

Topping the list of free economies of the world in the 2018 Index of Economic Freedom, Hong Kong provides a gateway to Asia’s fast-growing markets with opportunities across many industries.

The Hongkong and Shanghai Banking Corporation Limited opened its doors for business in Hong Kong in March 1865. By the end of the 19th Century, the bank was one of the most prominent financial institutions in Asia.

Our rich heritage and over 150 years of experience in the Hong Kong market means we have a deep understanding of how to do business here.

Today, HSBC operates from more than 100 branches in Hong Kong. Please get in touch to find out how we can help your business grow.

We’d be delighted to hear from you!

1 IMD World Competitiveness Center, 2017

Essentials

Population
7.5 million1
Size
1,104 sq km
Main languages
Chinese and English
Capital city
None, as Hong Kong is a Special Administrative Region of China
Other major cities
Not applicable
Currency
Hong Kong Dollar (HKD)
Dialling code
+852
GDP
USD37,927.13 per capita2
Top exports
Electrical machinery and appliances, textiles, apparel, footwear, watches & clocks, toys, plastics, precious stones and printed material3
Top imports
Raw materials and semi-manufactures, consumer goods, foodstuffs and fuel3
Unemployment rate
5.2%4
Profits tax
16.5% (15% for unincorporated businesses and a preferential rate of 8.25% for SMEs as of 1 April 2018)5
Typical office hours
9.00am – 6.00pm, Monday to Friday
Time zone
UTC +8
Emergency numbers
999 (police, fire and ambulance)

Hong Kong: Asia’s global city

Ranked

# 4

for ease of doing business (in a survey of 190 measured economies by The World Bank)

  • Access to Asia4

    Hong Kong provides easy access to Asia, the world’s largest continent which is home to half of the world’s population.

  • A free economy6

    Hong Kong has topped the Index of Economic Freedom for 23 consecutive years, ranking highest of 186 countries on financial freedom, property rights, rule of law and trade.

  • Mainland China’s global connector7

    From here you can plug into the fast-growing markets in mainland China. The territory is the most important source of investment for the Chinese mainland and vice versa. It’s also at the mouth of the Pearl River Delta, one of mainland China’s leading economic regions and a major manufacturing centre.

  • Wealthy in its own right8

    Not only is this Asian tiger one of the world’s most densely populated cities, it’s also home to a high concentration of wealthy individuals. The nearby cities of Shenzhen, Guangzhou and Dongguan, are now among the richest in mainland China and are sizeable and strong markets for goods and services.

  • Global trading and finance hub7

    Strategically located for business in the Asia-Pacific, Hong Kong is the second largest trading partner with the Chinese mainland after the US. It is also one of the most important financial services centres in the Asia-Pacific.

1 World Bank Group, 2019
2 Trading Economics, 2020
3 Central Intelligence Agency (CIA), 2018
4 Government of the Hong Kong SAR, 2018
5 PwC, 2018
6 The Heritage Foundation, 2020
7 Hong Kong Trade Development Council, 2021
8 Forbes, 2017

Market Profile

Hong Kong is one of the world’s most competitive economies. It’s a magnet for global business, with its own currency, legal framework and taxation system.

The autonomous territory is a long-standing bridge to mainland China and a rare blend of East and West, with large volumes of trade and investment flowing both ways.

Hong Kong is modern and international, with the broad protections of the rule of law. According to The World Bank it is also relatively easy and cost-effective to do business here1.

With free trade at its core, Hong Kong is situated in a prime location at the centre of Asia and its economy is one of the most open in the world.

Hong Kong has a three-fold appeal: it’s economically energetic, it has strong growth prospects, and it’s a major gateway to mainland China.

A good regional spot for expansion across the Asia-Pacific region, this multi-faceted city is also cosmopolitan, business-friendly and largely stable.

Read on to discover more about the dos and don’ts of doing business in Hong Kong. Also find out how trading in or with Hong Kong could help boost the future growth of your business.

1 World Bank, 2020

5 reasons to do business in Hong Kong1

  1. Made for business
    Hong Kong is a record-holder for being one of the planet’s freest economies, according to the Index of Economic Freedom. Largely market-driven with an independent judiciary, robust intellectual property protection and the use of English, the territory is a good place to do business.
  2. Low-and-simple tax regime
    The territory has a simple, predictable and low tax system. It imposes only three direct taxes and has significant allowances and deductions, which can reduce your taxes further, with no sales, capital gains or withholding taxes.
  3. Home of the small and medium enterprise
    Approximately 330,000 small and medium enterprises (SMEs) are currently based in Hong Kong, making up over 98% of all businesses and employing nearly half the private sector workforce.
  4. Start-up ecosystem buzzing
    Hong Kong is increasingly positioning itself as the start-up hub of the Asia-Pacific. As of November 2018, there were 2,625 start-ups in Hong Kong, an 18% increase from 2017.
  5. Support for new companies
    Foreign and local companies compete on equal terms, as there’s no protection of local businesses or trade barriers in Hong Kong. Overseas talent possessing specific skills, knowledge and experience can work here.


5 key challenges2

  1. 1

    New controllers register1

    Effective from 1 March 2018, all Hong Kong incorporated companies are now required to keep a significant controllers register (SCR) to maintain up-to-date beneficial ownership information.

  2. 2

    Registering property1

    Property registration takes an average of 27 days to complete in Hong Kong, which can be a long-winded process.

  3. 3

    Competition risks2

    Challenges, including Hong Kong’s limited ability to innovate, were highlighted as competiveness risks by the World Economic Forum’s World Competitiveness Report 2019.

  4. 4

    Understanding procedures2

    Navigating tax, legal and regulatory processes in Hong Kong can be difficult for those without a local understanding of these practices.

  5. 5

    A costly city3

    Hong Kong tops the list of most expensive cities for expatriates, according to Mercer's 2019 Cost of Living Survey. As a result, co-working spaces or virtual offices are increasingly popular.

1 Mondaq, 2018
2 Government of the Hong Kong SAR, 2018
3 ECA International, 2018