There is plenty of good news for Hong Kong in our cover story about regional headquarters. The number of RHQs located here has been growing steadily in recent years, and we are also seeing more start-ups being launched by people from overseas, reflecting our continuing attraction as a hub for international business.
Singapore and Hong Kong lead the way in terms of numbers of RHQs in Asia, and both offer similar advantages to global companies in key areas such as proximity to markets, efficiency and transparency. The experts we spoke to agree that Hong Kong is a great place to do business, and they do not think we are likely to be sidelined any time soon.
However, we should not be too complacent. Occasionally, we hear news of a company leaving Hong Kong – for example luxury carmaker Infiniti recently relocated its global headquarters to Japan, the home of its parent company Nissan. These moves are rare, but we should not ignore them.
When it comes to competition from other cities, we know that many of our Southeast Asian neighbours are now offering tax concessions in an effort to attract RHQs. Most ASEAN cities are far behind Hong Kong when it comes to having a mature, sophisticated and transparent environment for doing business. And the tax regime is only one component of Hong Kong’s broad appeal.
But we have all seen how rapidly the Mainland has changed over the past few decades. Some of our ASEAN neighbours have also been enjoying remarkable growth in recent years and are developing very quickly. The Hong Kong business community should look to the long term, when other cities may start to nip at our heels when it comes to attracting global companies.
As an externally focused economy, Hong Kong is vulnerable to issues beyond our control. The ongoing tensions between the United States and Beijing are putting a strain on Hong Kong businesses as we are caught up in all the uncertainty.
The recent demonstrations on Hong Kong’s streets have also been cause for concern. The protests were mostly peaceful, and the large numbers who turned out highlight the fact that Hong Kong is a pluralist society with strong regard for the rule of law.
Despite these recent challenges, Hong Kong’s key attractions remain the same: our simple and low tax system, free flow of information, excellent legal and banking networks, and our efficiency.
But negative news headlines may have an impact on sentiment that will be hard to correct. Perhaps we need to shout a little bit louder to ensure that the world knows it is business as usual in Hong Kong.