Hong Kong, the young metropolis and populous modern city located on the continent of Asia, has the highest population and employment density in the world, with approximately 7.1 million and 6.788 people per square kilometres. Known to be one of the world’s leading financial centres, Hong Kong’s service-oriented economy is characterized by its low taxation, practically free port trade and a well-established international financial market.


 

On Hong Kong’s economic freedom. Hong Kong’s economic freedom is among the highest in the world, topping the economic freedom index by the Heritage Foundation for 20 years. As a competitive financial hub and business centre, Hong Kong continues to be one of the world’s resilient economies. The high-quality legal framework provides effective security of property rights and unequivocally bolsters the rule of law. There is little to no tolerance for corruption, and a high level of transparency enhances government integrity. The efficient practice of regulations and openness to global commerce uphold a dynamic entrepreneurial climate in Hong Kong. The linkage with mainland China is most visible with the finance and trading sectors.

The financial market. Positioning number one in the World Economic Forum’s Financial Development Index, Hong Kong carries a substantial and well developed financial system, composed of an integrated network of institutions and markets which provide an extensive range of products and services to local and international clients and investors. Hong Kong’s financial markets are portrayed as having a high degree of liquidity and operate under compelling and transparent regulations by the four financial regulators namely the Hong Kong Monetary Authority (HKMA), the Mandatory Provident Fund Schemes Authority (MPFA), the Office of the Commissioner of Insurance (OCI) and the Securities and Futures Commission (SFC). The regulators oversee the banking, the Mandatory Provident Fund (MPF), insurance as well as securities and prospect enterprises individually, and help to maintain the financial stability of Hong Kong.

Hong Kong has a well-developed and dynamic exchange market, the development of which has been stimulated by the absence of exchange controls in Hong Kong and its favoured time zone area. The currency market in Hong Kong consists primarily of the sizeable and dynamic interbank market where wholesale Hong Kong dollar reserves are transacted among banking establishments.

Hong Kong’s stock market was the 6th largest in the world and the third largest in Asia in terms of market capitalization recognized at the end of the year 2016. Hong Kong is known for raising IPO (“Initial Public Offering”) funds. The insurance sector in Hong Kong is large and diverse. Hong Kong’s insurance sector was ranked 4th for market penetration and 7th for insurance density ($4,719 per capita). The insurance sector includes 160 licensed insurers as of March 2018 and is mostly owned by organisations overseas.

 

So why do business in Hong Kong? Advocating free press, freedom of speech and abolishing economic barriers, such as tariffs, quotas and limitations on ethnic groups, Hong Kong maintains a list of non-restrictive rules and regulations and is accessible to the wide public. Some other significant advantages include the free flow of information, a skilled workforce, the infrastructure, taxes, geographical location, and a vibrant international lifestyle. The policy of minimum intervention towards the business industry makes Hong Kong a favourable region for doing business.

 

 

By Ismail el Kadiri


References

https://www.censtatd.gov.hk/m/o.jsp

https://www.heritage.org

http://www.scchk.com.hk/index.php?option=com_content&view=article&id=47&Itemid=67

http://hong-kong-economy-research.hktdc.com/business-news/article/Hong-Kong-Industry-Profiles/Insurance-Industry-in-Hong-Kong/hkip/en/1/1X000000/1X003UWM.htm

 

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