Hong Kong is a popular hub for international companies keen on setting up businesses in Asia. Its' physical and political proximity to China plus modern infrastructure, internationally accepted and clear legal system primarily based on English law and lower tariff structure have rendered it into one among the globe's leading money and business centres.
In line with an annual survey conducted by Invest Hong Kong and also the Census and Statistics Department, the region situated on the southern coast of China is wanted by multinationals and inland firms wanting to expand their business operations in East Asia. The survey identifies new investment trends whereby international corporations have created Hong Kong a focal purpose for his or her, each regional and worldwide operations whereas inland companies from China have relocated here to benefit from numerous business opportunities.
A versatile work culture adept in both English and Mandarin languages makes for easier transactions saving companies time and translation prices in the process. Besides, the free floating currency of Hong Kong dollar, the absence of products and services tax, and a flat profit tax rate of 17.five percent for company operations based in Hong Kong translate into hefty monetary gains for multinational corporations. Also, the Hong Kong based mostly companies gain from the provision of re-invoicing.
Re-invoicing involves international trading between the customer and seller companies through an intermediary company based mostly in regions that exempt tax on import and export processing. The businesses that wish to trade product and services from abroad to China or vice versa founded an intermediary company in Hong Kong, which invoices the shopping for or selling price at above the original production costs. This method they are in a position to show reduced or zero profit margins while at the same time masking the original procurement costs. Reduced or zero profit margins as recorded by the intermediary company allow it to retain most profit margins whereas minimizing the profit tax. The monetary gains are substantial particularly for the foreign companies keen to trade in goods and services in Chinese markets.
What boosts their business strategy further is the special trade agreement between Hong Kong and main land China. The bilateral free-trade agreement referred to as Closer Economic Partnership Arrangement (CEPA) allows Hong Kong based mostly businesses straightforward access and reduced tariff rates to sell merchandise within the Chinese markets. Tariffs on 273 classes of goods including textiles, electronic and electric merchandise, jewellery and clothing are exempted. More, ninety p.c of Hong Kong's total export to China has been waived off the tariff duty from year 2006. While China's ascension to World Trade Organisation (WTO) has warranted a string of trade liberalisation measures to allow business with different WTO members Hong Kong enjoys special privilege in being allowed the primary chance to capture mainland China's budding markets.
In addition the ongoing liberalization of various service sectors together with infrastructure development, housing, banking, logistics and commodities, and property promise newer opportunities for Hong Kong primarily based companies. Their business potential is gigantic considering a number of the advantages that Hong Kong based mostly corporations relish in China are accrued because of its' special relationship with China particularly since no such provisions are allowed by WTO within the long term. The continuing inward investment in the Folks's Republic of China let alone Hong Kong's zero-tariff standing can attract foreign companies particularly those selling service-sector based mostly goods to determine and operate their headquarters from this region.
Last but not the smallest amount the colourful and cosmopolitan culture of Hong Kong accommodates each native and Western tastes. Living in the town may be a pleasure for each native and expats as this southern port city of China celebrates Chinese New Year, Dragon Boat racing and mid-Autumn festival with as abundant aplomb as Christmas, Valentine's Day and Halloween. Besides, an efficient transport network, made night life and cultural waterholes make it an enticing destination for international firms trying to line up their business operations in East and South East Asia along with for their relocating staff. This enhanced by political stability, strong law and order, larger freedom of information, and availability of business and professional support services makes living in Hong Kong equal to living in any different metropolis within the world.
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