Overseas Business Operations in Hong Kong on the Rise

An annual survey of overseas businesses in Hong Kong reveals that the number of their regional headquarters and offices reached an all-time high in 2004. As of June 1, 1,098 overseas companies had regional headquarters in Hong Kong, up from 966 in 2003, while 2,511 companies had regional offices, up from 2,241 in 2003. Regional headquarters refer to operations that manage regional business without frequent referrals to its parent company, while regional offices refer to operations that manage their business in consultation with the parent company.

The United States, with 256 companies, led the number of regional business headquarters in Hong Kong, followed by Japan with 198 and mainland China with 106. U.S. businesses also operate the highest number of regional offices in Hong Kong with 557, followed by Japan with 515 and the United Kingdom with 211. Industries that retain regional bases in Hong Kong consist of manufacturers, wholesale businesses, retail and import/export trades, business services, transport and related services, finance and banking services.

The survey also reported an increase in the number of local business offices, which handle total operations for companies incorporated outside of Hong Kong. Among a total of 2,334 local companies, 402 were owned by Japanese businesses, followed by 401 by the U.S. and 373 by mainland China. Respondents to the survey cited the free flow of information as the most important factor in the establishment of Hong Kong offices. Other factors included Hong Kong's low and simple tax system, corruption free government and absence of exchange controls.

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