Hong Kong remains the preferred city in Asia for overseas and Mainland companies, according to the results of an annual survey released in October.

“Once again, Hong Kong is one of the most preferred locations for overseas and Mainland companies managing their operations in Asia Pacific. According to the survey results, of the 6,440 companies in Hong Kong representing parent companies located outside Hong Kong, 3,890 are regional offices or headquarters. This is an all-time high,” said the Director-General of Investment Promotion, Mike Rowse.

“For us at Invest Hong Kong, there is no better advertisement for our city than companies which do their due diligence and select Hong Kong as their primary office in the region,” added Mr. Rowse.

The Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong, conducted by the Census and Statistics Department of the Hong Kong Special Administrative Region Government, showed that as at June 1, 2007, there were 1,246 regional headquarters, 2,644 regional offices and 2,550 local offices in Hong Kong representing their parent companies located outside Hong Kong.

The United States topped the list of countries/territories with regional headquarters (298), followed by Japan (232), and the United Kingdom (124). The major lines of business of regional headquarters were wholesale, retail and import/export trades; business services (excluding information technology); and transport and related services. They employed 131,347 people in Hong Kong.

The United States also topped the list of countries/territories with regional offices (593), followed by Japan (516) and the United Kingdom (223). The major lines of business of regional offices were wholesale, retail and import/export trades; business services (excluding information technology); and finance and banking. They employed 94,803 people in Hong Kong.

Mainland China topped the list of countries/territories with local offices (480), followed by Japan (431) and the United States (394). The major line of business of local offices were wholesale, retail and import/export trades; finance and banking; and business services (excluding information technology). They employed 119,476 people in Hong Kong.

Key favorable factors affecting the choice of Hong Kong as a location for regional headquarters/regional offices/local offices for foreign or Mainland companies were: (1) A low and simple tax system; (2) Free flow of information; (3) Absence of exchange controls; (4) Corruption–free government; (5) Communication, transport and other infrastructure; (6) Free port status; (7) Geographical location; (8) Availability of business services and professional support services; (9) Rule of law and independent judiciary; and (10) Political stability and security.

Mr. Rowse recognized that Hong Kong could not rest on its laurels.

“We’re at the heart of a competitive, high-growth region and investors have more and more choices,” he said. “What I’m hearing from the international chambers in Hong Kong and during my trips overseas is that Hong Kong has three key challenges ahead. We need to focus on the high cost of office premises, on improving our air quality and on increasing the number of international school places. The Government is aware of these problems and is working to address them.”

Mr. Rowse emphasized the important role played by overseas and Mainland companies in Hong Kong. “Headquarters, regional offices and local offices together employ almost 346,000 people in Hong Kong, accounting for around one in 10 of our working population.”

Mr. Rowse said he was also delighted to see the healthy growth trend over the past 10 years. “Since the handover in 1997, the number of regional headquarters and regional offices has increased by 55 percent. It’s certainly silenced a lot the critics who predicted the demise of Hong Kong a decade ago.”

For purpose of the survey, a regional headquarters (RHQ) is defined as an office that has managerial control over offices in the region (i.e. Hong Kong plus one or more other places) on behalf of its parent company located outside Hong Kong. A regional office (RO) is an office that coordinates offices and/or operations in the region (i.e. Hong Kong plus one or more other places) on behalf of its parent company located outside Hong Kong. A local office (LO) is an office that only takes charge of the business in Hong Kong (but nowhere else) on behalf of its parent company located outside Hong Kong.

Details of the survey results can be downloaded free of charge from the Web site: [http://www.censtatd.gov.hk/products_and_services/products/publications/statistical_
report/commerce_and_industry/index_cd_B1110004_dt_detail.jsp].