The perfect place to do business

A simple tax system, few restrictions and professional business networks mean investing in Hong Kong is easy 

The marriage of Hong Kong's world class financial, marketing and technical expertise and sophisticated infrastructure with the mainland's rapidly developing manufacturing and services base has created a win-win situation. 

Mainland China is now Hong Kong's largest trading partner and thousands of international companies _ including companies from New Zealand involved in China trade _ have chosen to establish their beachhead in Hong Kong. 

The city is a major corporate and banking centre as well as a conduit for China's burgeoning exports. Its deepwater port is one of the world's busiest.    

Organisations such as the Hong Kong Trade Development Council (HKTDC) and InvestHK, an award winning investment and promotion agency, offer assistance and solutions to companies wishing to invest in Hong Kong and aftercare services to inward investors throughout all stages of the investment process. 

The HKTDC's customised business matching service also helps companies identify business partners. This service is backed by professional matching and industry specialists with years of market experience and the HKTDC's   database of 620,000 international trade contacts.

As a place to set up a business Hong Kong offers a number of competitive advantages. It is one of the most Internet-savvy cities in the world.  

The government does not seek to censor internet access through mandatory filtering software or other measures. Broadband connectivity is available to more than 98 per cent of households and more than 95 per cent of business buildings. 

Hong Kong's workforce is computer-literate, resilient, flexible and entrepreneurial. The culture is one of industriousness underlined by a hunger among individuals to better themselves.

Richard Sun, head of the capital market services group for PricewaterhouseCoopers (Hong Kong) said overseas firms, as well as individuals, could freely incorporate their operations in Hong Kong, register branches, or set up representative offices without undue regulation. 

"There is no restriction on the ownership of such operations,'' he says. "Company directors are not required to be citizens of, or resident in, Hong Kong. Reporting requirements are straightforward and not onerous." 

The most common form of enterprise used for commercial purposes is the limited liability company. The Hong Kong Companies Ordinance governs all such companies, setting out the rules and regulations under which such companies must comply. People may also carry on business as sole proprietors or form partnerships, either of which must be registered under the Business Registration Ordinance.  There are no statutory requirements for annual audits, but annual tax returns must be accompanied by financial statements. 

Taxation is uncomplicated and Hong Kong companies are based on a territorial source principal - only income which is sourced in Hong Kong is taxable. Income which is sourced outside of Hong Kong, even if remitted to Hong Kong, is not subject to tax. 

Last year, in the first of a series of initiatives to help New Zealand business take advantage of export opportunities in Hong Kong and mainland China, New Zealand Trade and Enterprise (NZTE) set up a New Zealand Concept Centre.

Named "New Zealand Focus", and located in the heart of one of Hong Kong's busiest shopping districts, the centre features displays by Fisher & Paykel Appliances and New Zealand Natural Ice Cream and acts as a showcase for New Zealand food and beverage and natural health products. There is also space for business presentations and functions and exhibitions of contemporary New Zealand art and design. 

"We will host decision makers and buyers from China at the centre, giving them the chance to experience New Zealand products through food and wine tastings, demonstrations or at art exhibition openings,'' said Tim Gibson. NZTE chief executive. 

New Zealand capital commitment in Hong Kong is directed principally at infrastructure relating to the marketing, sales and distribution of New Zealand produce, and the establishment of holding companies for onward investment into mainland China and the region. 

Examples include Fonterra and Carter Holt Harvey. In early 2004, New-Zealand-invested anti-spam and security service provider MailProve Limited set up its regional headquarters at Cyberport, one of Hong Kong's state-of-the-art science parks. 

Main exports to Hong Kong include seafood, kraft paper, milk powder, sheep meat, frozen beef, non-alloy steel and race horses. 

Products that pass through Hong Kong to New Zealand include machinery parts, computers, jewellery articles, unrecorded media, toys and models, books, electronic integrated circuits and household products.