Hong Kong sees 5.9% increase in foreign companies operation

24% of the 6,948 respondents said they plan to expand their business in Hong Kong in the next three years.

The total number of overseas and Mainland Chinese parent companies running business operations in Hong Kong in the first half of the year was a record-high 6,948, representing a 5.9% increase from 2010, according to the results of an annual survey Invest Hong Kong and the Census & Statistics Department released Thursday.

As at June 1, there were 1,340 regional headquarters, 2,412 regional offices and 3,196 local offices in Hong Kong representing their parent companies located outside Hong Kong.

Director-General of Investment Promotion Simon Galpin said Invest HK had helped almost 200 overseas and Mainland companies to set up business in Hong Kong in the first half of the year.

“This level of activity supports our experience on the ground where we are seeing an increasing number of smaller, high-growth companies from all over the world choosing Hong Kong as the base for their regional operations,” he said.

Of the 6,948 companies that responded to the survey, 24% indicated they plan to expand their business in Hong Kong in the next three years, representing a 4 percentage point increase compared with 2010.

Roughly half of the parent companies come from four countries. The US tops the list with a total of 1,328 offices operating in Hong Kong, followed by Japan with 1,150, Mainland China with 805 and the UK with 562.

When choosing a location to set up offices, the top five factors were simple tax system and low tax rate, free flow of information, corruption-free government, political stability and security, as well as communication, transport and other infrastructure.

The overall business environment in Hong Kong as a location for setting up offices has remained more or less the same, according to 64% of the companies responded to the survey.