Hong Kong is the most attractive investment destination worldwide: BMI Research

Thanks to highly developed logistics network.

As one of the world's major hubs for international trade, investment, and finance, it has been noted that Hong Kong offers among the most favourable operating environments of any state globally.

According to a research note from BMI Research, the Special Administrative Region (SAR) of China is a very low-risk location for businesses with no single, significant deterrent to foreign investors.

Hong Kong's position as a premier investment destination is boosted by a number of factors, namely its large pool of skilled labour, its highly developed logistics network, an open economy with few fiscal, financial or trade barriers, and its low crime rate.

Hong Kong receives the highest score in the overall BMI Operational Risk Index, at 81.6 out of 100, making it the most attractive investment destination out of 201 countries worldwide.

Here's more from BMI Research:

Hong Kong offers investors a highly developed and diverse logistics network that provides good access to international supply chains . In particular, its very well-developed trans port system with top-rated road, rail, port and airport infrastructure ensure that businesses enjoy efficient supply chains and excellent connections to major global economies.

The country has a high-quality and widespread road network, comprising nine highways. The utilities infrastructure also offers widespread coverage and a reliable supply, despite the dependency on imported fuel and water. However, utilities costs are relatively high and Hong Kong's role as a major global trade hub looks s et to be challenged by nearby mainland Chinese ports over the long term. These factors feed into a high score of 77 .2 out of 100 in the BMI Logistics Risk Index, which places Hong Kong fourth on a regional comparison of 38 Asian states.

Hong Kong's ample, skilled, and urbanised labour force means that there are minimal risks posed to investors in terms of recruiting suitable candidates, and nvestors can expect a highly skilled labour force and good labour availability. Both basic skills and more advanced qualifications are widespread in the labour market, ensuring that all areas of economic activity are catered for. The country also benefits from a flexible workforce, with a long statutory working week and a low statutory requirement for annual leave posing minimal risk of disruption to businesses.

However, Hong Kong's unemployment rate is extremely low at 3%, meaning near-full-employment, which creates a high risk of labour shortages. Importing foreign workers may therefore be necessary, particularly for businesses requiring workers with technical degrees such as science and engineering, which are in short supply. Due to these considerations, Hong Kong scores 72.1 out of 100 for overall Labour Market Risk, placing it third out of 38 states regionally.

Hong Kong has become one of the world's most popular investment destinations due to an open economy with low fiscal and trade barriers and minimal red tape. Investors in all sec tors will be encouraged by reduced costs due to a trans parent legal system, limited corruption and independent judiciary. The presence of deep and sophisticated financial markets, as well as major foreign banks with strong international links, ensures that financial products are readily available for both businesses and consumers.

Moreover, a highly favourable tax regime significantly increases potential profit margins for businesses and reduces bureaucratic obligations. For these reasons , Hong Kong is a regional outperformer in the BMI Trade and Investment Risk Index with a score of 87.9 out of 100 , ranking second in Asia behind only regional competitor Singapore.

Criminal risks in Hong Kong are low, and there is no systemic threat to foreign workers . Moreover, no significant threat is posed by terrorism owing to the fact that Hong Kong is a vibrant democracy with no history of domestic terrorism or insurgency. However, cyber-terrorism poses the most specific and serious risk to companies in Hong Kong, as they operate with data-sensitive systems . Cyber attacks could also target Hong Kong's smart infrastructure systems that regulate the city's transport, electricity and water supply.

The threat is mitigated by the fact that Hong Kong boasts terrorist attack contingency plans, a counterterrorism strategy and very professional operational security and counterterrorism units . The SAR is also protected by the considerable military power of parent state China, ensuring that any external attack will be met with strong resistance. Hong Kong therefore receives an overall score of 89.1 out of 100 in our Crime and Security Risk Index, placing second regionally behind New Zealand.