HK invests in its open regulation

An increasing number of mainland enterprises are hoping, through investments in foreign countries, to utilise the good system environments of the host countries, avoid the saturated mainland market, obtain advanced technology and management expertise, and expand their international influence. When selecting a destination, the enterprises mainly consider the local natural conditions, economic environment, political factors and socio-cultural environment.

In 2011, PRC domestic investors directly invested in a total of 132 countries and regions around the world, with Asia, Europe and North America being the areas where the investment was most concentrated. Among these, Hong Kong has been favoured by mainland investors due to its open investment attraction policies.

Springboard to go global

Many multinationals need to consider the issue of site selection for their holding companies or regional holding companies, and the main factors in such a choice are the reduction of tax costs and risks.

Hong Kong’s tax system is favourable to the business operations of multinational corporations. Corporate profits tax is a mere 16.5%; the maximum personal income tax rate is 15%; there is unlimited carry-over of losses; there is no value-added tax, sales tax or capital gains tax; and there is no withholding tax on dividends or interest.

Matt Hu is the head of North China investment promotion at InvestHK, a department of the Government of Hong Kong