Rise in company formation reaffirms Hong Kong's dominance

Rise in company formation reaffirms Hong Kong's dominance

According to statistics recently released by Company Registry, 109,424 companies were incorporated in Hong Kong in 2009. This translates to an increase of nearly 11% over the corresponding figure for the prior year, which stood at 98,645. Hong Kong's rising company registrations in a challenging global economic environment are a testament to its continued appeal as an investment destination.

Further analysis of the statistics by GuideMeHongKong.com reveals that foreign firms are the main driver for company formation growth in Hong Kong. The majority of the firms incorporated in Hong Kong are representatives or local branches of parent companies from USA, Japan, UK, mainland China or the EU. Two factors can be attributed for this trend: a) the diverging tax policies of different countries as a consequence of the global financial crisis and b) Hong Kong's attractiveness as the launching point for firms that wish to enter China.

Hong Kong's unique advantage of location, low taxes, and business friendly climate makes it a premier location for business set-up and expansion in Asia. It is a preferred venue for MNCs and mid-sized companies who wish to gain access to the Asian markets as well as for Asian enterprises from China and India that are expanding out of their respective countries. Hong Kong provides local companies with preferential access to the China market under the China Hong Kong free trade agreement, CEPA. Other enabling factors such as a free economy, political and economic stability, an efficient legal system, and a talented readily available workforce, create a favorable business climate.

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