Hong Kong: Unleashing Opportunities in Asia’s Premier Business Hub

Strategically located at the heart of Asia, Hong Kong is one of the world’s best places to do business. Its free economy, transparent regulations, strong talent pool, robust infrastructure, and unique blend of East and West make ‘Asia’s World City’ an attractive destination for companies from around the globe to set up their bases.

Demonstrating its economic strength, Hong Kong’s GDP exceeded USD383 billion in 2023,¹ representing an average annual growth of about 2.8% since 1997, outpacing the 1.9% average growth in other advanced economies over the same period.² As of the end of 2023, the city had a high GDP per capita of USD50,889³. It was also ranked as the third most competitive economy in Asia and seventh globally in 2023 according to the International Institute for Management Development in Switzerland.⁴

The city’s commitment to free trade, free markets, and free enterprise presents an abundance of growth opportunities for businesses.⁵ Hong Kong has also continued to be ranked top in freedom to trade internationally in the Economic Freedom of the World Annual Report 2023.⁶ Establishing a business in Hong Kong is a streamlined procedure, with processes that can be completed within 24 hours.

Renowned for its long-standing status as an international financial centre, Hong Kong’s strategic location at the heart of Asia enables businesses to reach half of the world’s population within five hours by plane. Coupled with a simple and low tax regime, the city facilitates the efficient setup of regional treasury centres for international organisations.⁷

Hong Kong’s attractive geographic location, robust financial system, trade facilitation capabilities and well-developed infrastructure make it a vital ‘super connector’ for Asia-Pacific trade, particularly between the Association of Southeast Asian Nations (ASEAN) and the Guangdong-Hong Kong-Macao Greater Bay Area (GBA).

The rapid growth and development of the GBA continues to open up new opportunities for those looking to expand their presence in the region and beyond. With a total economic output exceeding USD1.97 trillion in 2023, accounting for approximately one-ninth of China’s GDP,⁸ the promise of this region is only set to grow.

As one of Asia’s leading trade hubs, Hong Kong is ASEAN’s second-largest trading partner, trailing only mainland China. Total merchandise trade between Hong Kong and ASEAN amounted to USD113 billion in 2023, representing 12.8% of Hong Kong’s global total.⁹ As China moves up the value chain and supply chains within Asia continue to shift, this connectivity has become increasingly important. Hong Kong’s strategic advantages and strong economic ties position it as a vital link between ASEAN and the GBA, fostering a dynamic and interconnected business landscape that extends beyond these regions.

Hong Kong’s labour force is highly regarded, with the IMD World Competitiveness Booklet ranking it 16th in 2023 in terms of talent.¹⁰ Impressively, 67.5% of the population have obtained advanced education,¹¹ with many people bilingual and attuned to international business practices.

The city’s deep pool of financial expertise and high-quality legal, accounting, consulting and other advisory services facilitate cross-border transactions, investments, and business collaboration in Asia, providing essential support for companies seeking to expand their operations in the region.

Emerging as a vibrant innovation and technology hub, the city also offers a conducive environment for startups and research institutions, promoting knowledge exchange, talent mobility, and technology-driven entrepreneurship. These synergies enhance innovation and strengthen the competitiveness of local tech firms and international companies based in Hong Kong.

Regarding Environmental, Social and Governance (ESG) factors, Hong Kong has made significant strides to open up opportunities around sustainability¹² in line with the city’s well-defined climate action plan and various incentives aimed at cutting carbon emissions. The city is also a hub for sustainable finance in Asia, with 219 authorised ESG funds with AUM of USD169.6 billion as of 31 December 2023.¹³

Despite the many positive aspects of expanding into Hong Kong, local laws and customs do vary and should be carefully understood and adhered to.

For example, it’s necessary to be familiar with the city’s new labour laws, including those around hiring and paying employees as well as those focused on governing and running a business. Navigating the range of tax, legal and regulatory processes, can be difficult for those without a local understanding of these practices. Fortunately, Hong Kong, as a global financial centre with common law jurisdiction, supports businesses with a thriving professional services sector and specialists to help organisations set up and operate effectively.

Hong Kong also tops the list of the most expensive cities for expatriates,¹⁴ and these costs are reflected in commercial rents, with co-working spaces and virtual offices becoming increasingly popular as a result.

Finally, organisations will need a local account to do business in Hong Kong and may benefit from the help of a trusted banking partner when it comes to handling the paperwork.

When a business is exploring expanding into new regions, working with people who can offer an international approach as well as vast experience with other global businesses is imperative.

HSBC’s International subsidiary banking (ISB) offering can help you to navigate the nuances of markets such as Hong Kong, where the opportunities are vast. Our ISB team is dedicated to supporting our clients in starting and developing their businesses here and enabling them to capture the growth opportunities in the region.

We offer dedicated contacts and bespoke solutions that deliver cost efficiencies, better use of working capital and reduced risks. We are exceptionally proud of our consistent service and deep local expertise. When dealing with global businesses, we take a global approach. We also provide you with a central technology platform and communicate across our HSBC network to create real-time insights and connections, enabling new opportunities.

HSBC was founded in Hong Kong more than 150 years ago. We have deep roots in the local market, which provides us with unique insights. Our extensive international network, spanning 62 countries and territories,¹⁵ complements our local expertise, meaning that we can offer a wide range of products and services that reflect specific market conditions and requirements.

All this also means that we never evaluate the needs of a subsidiary in a vacuum but are instead able to take a holistic, big-picture view. Cross-border banking is a delicate process and requires a unique set of skills – ones that our entire team are well versed in, helping organisations move or allocate financial resources swiftly across borders supported by our top-notch fintech capabilities.

Hong Kong is an important trade back office of HSBC. We’re able to speak to suppliers across Asia in their local language and in real-time. Our ISB team is diverse and well-rounded, as well as has the experience needed to help you succeed.

Our teams can provide clients with a broad range of products and services to support your international expansion. By partnering with HSBC, companies looking to move into this region can lean on us for extensive support.

We offer a comprehensive structured trade solution and help simplify your operations, as well as support you when it comes to securing permits for new premises. Our experience can help you reduce logistical and supply chain issues, be more responsive to the market and achieve your business goals. Through our solutions, you can also enjoy oversight over your payments across the globe. All of this support is carried out by specialists with vast experience working with multinationals.

Hong Kong is an exciting place to do business, with the potential to open up opportunities throughout Asia. Yet, we know first-hand how challenging running a global business can be. As your trusted partner, we can help you approach doing business in Hong Kong with confidence.

If you’re looking to expand into new markets, we can help connect you to opportunities and support you every step of the way.