Israelis Encouraged to Set up Shop in HK at Latest IDEX Online/UBS Event

Hong Kong offers a friendly business environment, according to Michael J T Rowse, director general of the Hong Kong governmental organization Invest Hong Kong (InvestHK). Rowse spoke at the latest IDEX Online and UBS partnership event, held on Sunday evening.

Rowse described how a foreign company, in this case Israeli, could benefit from setting up business there.

He stressed that, in his opinion, there is only one reason why an Israeli company should come to Hong Kong for business – to make a profit. Hong Kong, he said, although not a cheap place to do business, is a profitable place.

Rowse explained why Hong Kong in particular is such a good place for business at five different levels:

• Hong Kong’s proximity to Korea, Japan, China, the Philippines, Thailand and Vietnam makes it a good place for business as a base for the East Asian region.
• As a result of being, up until the last ten years, a British colony, the official language of Hong Kong is English, and it operates under the British legal system.
• There is no VAT, and business taxes are both low and simple – there is only one tax.
• Hong Kong’s population is almost 7 million, and in 2006, it received 25 million visitors, mostly from mainland China.
• The level of ethics in the Hong Kong market makes it an attractive place for retailers as well as consumers.

Rowse said that as a branch of the government, with a representative office in Israel, it provides free assistance and in a number of ways.

In an effort to make doing business in Hong Kong successful, Invest HK aims to, “minimize the risks and maximize the opportunities” of setting up a business. Forms of assistance include information assistance – about anything from the legal structure and tax system in Hong Kong, to sector-specific information, including direct communication with InvestHK’s sector team in Hong Kong.

Once a business owner decides to set up a business or branch in Hong Kong, InvestHK provides connections, a prepared visit program, with contact appointments in the relevant business sector, and logistical and absorption  assistance to help smooth the transfer process.

When answering questions, Rowse also addressed Hong Kong’s tax system. Hong Kong has no VAT tax, and many people from mainland China come to Hong Kong to buy things that are available in China, tax free.

Furthermore, for a business, the government taxes only that business activity that arises in Hong Kong. Corporate profits are taxed at a rate of 17.5 percent, and in April 2008, this will drop to 16.5 percent.