Hong Kong remains a magnet for international companies to oversee their regional operations. Both the number of regional headquarters and regional offices in Hong Kong again reached all-time highs this year.

According to a latest report which released here Monday by the Census and Statistics Department (C&SD) of Hong Kong government, there were 1,167 companies that were regional headquarters (RHQs) and 2,631 companies that were regional offices (ROs) in Hong Kong set up by their parent companies outside Hong Kong, as at June 1, 2005. The corresponding numbers as at June 1, 2004 were 1,098 and 2,511 respectively.

The Director-General of Investment Promotion at Invest Hong Kong, Mike Rowse, was pleased with the results.

He said, "It is very encouraging to see that the number of regional headquarters, regional offices and local offices have all increased during the past year. Hong Kong now is host to over 6,200 overseas and mainland companies -- strong evidence that international business continue to prefer managing their regional operations from our city."

The government said the report indicates that investors from traditional markets, including the US, Japan and the UK, continue to see Hong Kong as the key strategic location to manage regional businesses.

The United States topped the list of countries/territories with companies having RHQs in Hong Kong. A total of 262 American companies had RHQs in Hong Kong in 2005. This was followed by Japan, with 204 companies, and the United Kingdom, with 115 companies.

At the same time, mainland companies are playing an increasingly significant role in the business community as the largest source of local offices in Hong Kong.

The mainland topped the list of countries/territories with companies having LOs in Hong Kong. A total of 443 mainland companies had LOs in Hong Kong in 2005. This was followed by Japan,with 439 companies, and the Untied States of America, with 395 companies.

Rowse believes that the results point to Hong Kong's traditional advantages -- including a low and simple tax system, free flow of information and absence of exchange controls -- as the most important reasons that investors choose Hong Kong for their regional operations.

The latest report on economic freedom by Fraser Institute of Canada, the Cato Institute of the US and 67 other research institutes around the world also confirmed Hong Kong retains its position as the world's freest economy.

"We are well aware of the keen competition for investment in the region, and the need to continue to improve the business environment in Hong Kong to retain our leading position," said Rowse.

"We at Invest Hong Kong are currently working with many overseas and mainland companies to establish and expand their operations in Hong Kong. With the implementation of the investment facilitation policy for mainland enterprises to invest in Hong Kong, the broadening of scope of products and services under CEPA and the upcoming CEPA , we are expecting a steady growth in our investment projects this year." Rowse added.

Source: Xinhua