Leveraging Hong Kongs Unparalleled Strengths and Unprecedented Opportunities
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Leveraging Hong Kong’s Unparalleled Strengths and Unprecedented Opportunities Dr Jimmy Chiang Associate Director-General of Investment Promotion September 2019 © Copyright Invest Hong Kong, HKSAR
HONG KONG A WORLD CLASS ECONOMY st 1 nd 2 Economic Freedom Competitivenes s Sources: The Heritage Foundation, International Institute for Management Development, UNCTAD rd 3 FDI Inflows
HEART of ASIA Over 120 airlines operate 1, 100 flights per day to over 220 destinations worldwide, including over 50 Mainland cities The busiest air cargo airport in the world – 5. 1 million tonnes of cargo handled in 2018 (Airport Authority Hong Kong) 4 hours Most of Asia’s key markets within four hours’ flight time 5 hours From half the world’s population
THE RULE OF LAW
LOW & SIMPLE TAX SYSTEM Corporate Income 32. 9% Two-tiered tax system 10. 5% Personal Income 7% 16. 5% 8. 25% Profits Above HK$2 M First HK$2 M of Profits 16% 20% 45% 17% 0% VAT 5% 5% 16. 5% HONG KONG 22% 17% 25% SINGAPORE SHANGHAI* ✗VAT/GST/Sales tax ✗Capital Gains Tax ✗Withholding tax on investments ✗Estate duty ✗Global taxation ✗Wine duty Employer Social Security Employee Social Security VAT * There is no standard rate across the Mainland China. Shanghai is used as an example. Hong Kong has signed Comprehensive Double Taxation Agreements (CDTAs) with 40 jurisdictions. Negotiations with 15 jurisdictions are in progress. (as of May 2019)
FREE & FAST FLOW OF INFORMATION in Asia for smartphone penetration rate 259. 9% (OFCA, Oct 2018)
MOST COMPETITIVE FINANCIAL CENTRE IN ASIA The Global Financial Centres Index (Sept 2018) Ranking City 1 New York 2 London 3 Hong Kong 4 Singapore 5 Shanghai 6 Tokyo 7 Sydney 8 Beijing 9 Zurich 10 Frankfurt Source: The Z/Yen Group of Companies
GREATER BAY AREA POPULATION CHINA 71. 1 mn >UK, Italy, South Africa LAND AREA 56, 000 km 2 GREATER BAY AREA >Ireland, Latvia, Panama, West Virginia (US) GDP Zhaoqing Guangzhou Foshan Huizhou Dongguan Zhongshan. Shenzhen Jiangmen Macao. Hong Kong Zhuhai US$1. 6 trillion >Indonesia, Netherlands, Turkey
COMPARISON WITH THE WORLD’S MAJOR BAY AREAS Guangdong-Hong Kong-Macao Bay Area San Francisco Bay Area 55, 905. 5 17, 886. 4 21, 478. 5 36, 898. 3 69. 6 7. 6 20. 2 44. 0 1, 513. 4 781. 2 1, 657. 5 1, 774. 2 Real GDP growth (%) 7. 0 5. 3 0. 9 1. 9 Per-capita GDP (US$) 21, 750 102, 230 82, 050 40, 360 Air passenger traffic (mn passenger-times) 201. 7 81. 3 132. 2 123. 9 7. 96 1. 18 2. 16 3. 58 Port container throughput (mn TEUs) 66. 48 2. 42 6. 25 7. 76 GDP share of tertiary industry (%) 65. 6 71. 9 83. 3 77. 0 Land area (sq km) Population (mn) GDP (US$ bn) Air freight traffic (mn tonnes) New York Tokyo Bay Metropolitan Area Source: Government statistical departments in the relevant jurisdictions, TDC
OUTLINE DEVELOPMENT PLAN https: //www. bayarea. gov. hk
DEVELOPMENT OBJECTIVES 1. A globally influential international innovation and technology hub 2. Expediting infrastructural connectivity 3. Building a globally competitive modern industrial system 4. Taking forward ecological conservation 5. A quality living circle for living, working and travelling 6. An important support pillar for the Belt and Road Initiative (BRI) 7. A showcase for in-depth cooperation between the Mainland Hong Kong and Macau
FOCUSES OF 4 CORE CITIES Coordinated and innovation-driven regional development with more seamless flows of people, goods, capital and information n National core city and integrated gateway city n Enhance functions as international centres for commerce and industry, transport, technology, education, and culture GUANGDONG Guangzhou Shenzhen Macao n World-class tourism and leisure centre n Commerce and trade cooperation service platform between China and Lusophone countries For the other 7 key node cities, main objectives are to develop towns with distinct characteristics and to promote integrated development of urban and rural areas n National economic core city and national innovation city n Develop as capital of innovation and creativity with global influence Hong Kong n International financial, transportation and trade centres n Global offshore RMB business hub and international asset and risk management centre n International legal and dispute resolution services centre n Develop high-end services, innovation and technology industries and emerging industries
BELT & ROAD n 60%+ of the world’s population n 30%+ of global GDP n 30%+ of the world’s total merchandise trade RUSSIA ITALY Beijing TURKEY IRAQ Urumqi CHINA IRAN Basra Khambhat OMAN BANGLADESH Quanzhou Guangzhou Hong Kong INDIA THAILAND Arabian sea Bay of Bengal Kollam KENYA Xi’an South China sea Andaman sea SRI LANKA Banda Aceh Indian Ocean Belttung INDONESIA Arrangement for Advancing HK’s Full Participation in and Contribution to the Belt and Road Initiative signed in Dec 2017 Silk Road Economic Belt 21 st Century Maritime Road Sources: China-US Focus, Xinhua Finance Agency
BELT & ROAD 11 -12 September at Hong Kong Convention and Exhibition Center
FINANCIAL/ TRANSPORT/ TRADE CENTRE
CORPORATE TREASURY CENTRE (Effective since May 2016) NEW TAX REGIME Function n In-house bank to provide treasury services n Intra-group borrowing and lending n Cash and liquidity management n Processing of payments to vendors n Supporting capital raising n Risk management n Hold the control function on behalf of headquarters n Help monitor changes in local regulations and market conditions Incentive 8. 25% n Profits tax rate reduced to n Interest deductions allowed for tax purpose
GREEN FINANCE § Subsidies for green bond issuance (Green Bond Grant Scheme) § Subsidies for first-time bond issuance (Pilot Bond Grant Scheme) § Inaugural government green bond of HK$100 billion (US$13 billion) issued in May 2019
INNOVATION & TECHNOLOGY
STRONG GOVERNMENT SUPPORT n Innovation & Technology Venture Fund n 300% Super Tax Deduction for R&D n Talent List & Technology Talent Admission Scheme (Tech. TAS) AI and robotics Smart city Fin. Tech Biomedicine/ healthy aging
KEY EVENTS
VIBRANT INTERNATIONAL BUSINESS HUB Overseas and Mainland companies 8, 754 8, 225 6. 4 % Regional headquarters 1, 530 8. 3 2018 % Sources: 2018 Annual survey of Companies in Hong Kong with Parent Companies Located outside Hong Kong, 2018 Startup Survey
HOW WE CAN HELP YOU GROW Whether you are new to Hong Kong or a long-standing investor Planning Set-Up Launch Expansion Information to aid Facilitation of visa / PR and marketing Ongoing support on planning and licence applications, support for launch business expansion evaluation schooling, introduction to service providers
GET in TOUCH Jimmy Chiang Associate Director-General of Investment Promotion JChiang@investhk. gov. hk hk. linkedin. com/in/jimmyhlchia ng @jimmyhlchiang (852) 3107 1000 investhk. gov. hk We. Chat ID: INVEST_HK Leonid Orlov Principal Consultant (Moscow) leorlov@investhk. com. hk e. weibo. com/investhk @Invest. HK www. linkedin. com/company/invest-hong-kong www. youtube. com/user/investhk www. flickr. com/photos/investhk © Copyright Invest Hong Kong, HKSAR
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