Hong Kong's Advantages Plugged In France
03 June 2013
Posted by: Author: Mary Swire
Author: Mary Swire
During a speech on May 29 at the Hong Kong Trade Development Council business luncheon in Paris, the Secretary for Commerce and Economic Development Gregory So extolled the advantages of Hong Kong as a business hub in Asia and the premier gateway to Mainland China.
He firstly noted that more French people and companies are moving to Hong Kong. For example, the number of expatriates from France in Hong Kong has doubled since 2006 to around 16,000, making it the largest French community in Asia.
While he pointed to the economic downturn in Europe coupled with the relatively bright economic prospects in Asia as one reason for French entrepreneurs looking to the region and to Hong Kong for their business expansion, he also saw Hong Kong as an ideal showcase for French firms to promote their goods and services across Asia, and especially in Mainland China.
Under "One Country, Two Systems" framework, he commented to his French audience, Hong Kong continues to be a free and open business hub, maintains its own fully-convertible currency, has no restrictions on the flow of capital, maintains its own common law system with an independent judiciary, and has a low and simple tax regime.
With taxes including profits tax of no more than 16.5 percent and salaries tax capped at 15 percent, and no capital gains tax, inheritance tax, value added tax or goods and services tax in Hong Kong, So confirmed that Hong Kong maintains a level playing field for business: "International firms, including French firms, enjoy the same low tax rates as local companies."
He also gave Hong Kong's zero tariffs on wine imports as one of the main reasons why France has been its largest source of fine wine for many years. Since eliminating tariffs on wine in 2008, the value of French wine imports into Hong Kong has increased by about three times to EUR468m (USD607m) last year.
Furthermore, he confirmed that French companies can take advantage of the Closer Economic Partnership Arrangement (CEPA), or free trade treaty, with the Mainland. Products made in Hong Kong that comply with CEPA rules of origin criteria enjoy tariff-free entry to the Mainland, while CEPA also provides preferential access to Mainland markets for companies in 48 services sectors, such as financial services, legal, tourism, information technology and trade and logistics services.
Finally, So explained that Hong Kong is a leading asset management center with a fund management business of over HKD9 trillion (USD1.16 trillion) at the end of 2011, and a stock market that is the second largest in Asia and the sixth largest in the world with a market capitalization of over USD2.8 trillion. Furthermore, Hong Kong is "the primary testing ground and launch pad" for the internationalization of the renminbi.
So concluded that Hong Kong would "welcome more French businesses to take advantage of Hong Kong's potential as a capital-raising center … (and) French firms can be part of the action by using Hong Kong as their offshore center for RMB business."