David Parker Welcome to Hong Kong Hong Kong: The Gateway to China Hong Kong’s Role in Growing Your Business in Asia Norrbotten Delegation to London, Thursday April 26 th 2012

About InvestHK  Our aim is for companies to make an informed choice and put the right part of your business in Hong Kong for the right reasons in order to be more competitive and make more profit  Part of Economic Trade Office London (covering UK, Baltics, Russia & SCANDINAVIA).  Provide free advice and customized services to help businesses succeed in setting up operations in Hong Kong. The Department for Foreign Direct Investment Relevant up-to-date information Facilitation of set-up / expansion Matchmaking and networking support Public relations support for launch / expansion

1.Three (3) Markets Hong Kong > A dynamic consumer market Hong Kong + Mainland China Hong Kong + Asia 2.Business or Operational Functions - E.g. Sales and Marketing Research & Development Sourcing and Procurement Regional Office/Regional HQ Management Treasury Functions 3.Low Tax… or No Tax 3 Markets, 3 Opportunities for Businesses

One Country, Two Systems

Hong Kong – Dynamic consumer market Free port – no import or export tariffs on most goods No sales tax – maximise consumer business opportunities Hong Kong loves to shop – total retail sales in 2010 at HK$324.9 billion, an 18.3% increase over 2009 Maximise brand and product exposure to more than 40 million (and growing!) visitors to Hong Kong With over 28 million Mainland Chinese visitors, Hong Kong is the shop window for Mainland consumers World-class logistics, infrastructure and financial services to support and help develop consumer activities in Hong Kong and Asia Large pool of tri-lingual and capable talent with international experience to help your consumer business Hong Kong a testing ground before entering Mainland China – minimising risk

China’s Global Financial Centre Global leader in IPOs since 2009 Asia’s asset management hub with funds under management in excess of US$1 trillion First and largest offshore RMB platform – handles 86% of China’s global RMB trade World’s largest securitised derivatives market in 2011 Home to 70 of the world’s 100 largest banks Pool of financial expertise (more CFAs than anywhere else in Asia Pacific) RankingCity 1London 2New York 3Hong Kong 4Singapore 5Shanghai, Tokyo 7Chicago 8Zurich 9Geneva 10Sydney, Toronto The Global Financial Centres Index (GFCI) 9, The Z/Yen Group, March 2011

World Class ICT - Connecting People Ranked 4 th in the world and 2 nd in Asia in the Global Innovation Index Report INSEAD, Mobile phone penetration rate 193.2% OFTA Feb th most e-ready economy in the world EIU rd highest average broadband connection speed US-based network provider Akamai Technologies 2009

Quality Education Home to Asia’s leading universities and business schools –HKU 2 nd and in the world’s Top 50 Times Higher Education World University Rankings –World’s Top eMBA in 2010: Kellogg - HKUST EMBA Programme –MBA run by HKUST ranked 1 st in Asia and 6 th in the world in 2011 Rankings by the Financial Times 48 international schools serving students of more than 30 nationalities

World's busiest cargo airport Third busiest international passenger airport Connections to about 160 destinations worldwide 900 daily flights by over 95 airlines 23 minutes to Central Business District from Airport One hour from GPRD, the “factory of the world” Heart of Asia and Gateway to China

Greater Pearl River Delta Exports would rank 7 th globally GDP would rank 18 th globally Population55.26Mn > Spain, Canada ExportsUS$387Bn> Italy, UK, Canada (more than 27% of China’s exports) GDPUS$665Bn> Indonesia, Sweden, Saudi Arabia Land area56,000 sq. km< Ireland, Panama (less than 1% of China’s land area)

“No other city in the world can help overseas investors manage the risks inherent in entering Chinese Mainland markets as well as Hong Kong” Source: E.E. Scott, First Choice Hong Kong – Your Asia Pacific Platform Hong Kong + China Gateway to the Mainland

Supporting China’s development –Raising capital, upgrading corporate skills, international exposure, testing/tailoring products Leisure & business visitors –40+ million visitors in 2011, fuelling retail, leisure, hospitality sectors – 22.7 million from mainland China Closer Economic Partnership Arrangement (CEPA) Double Taxation Agreement RMB trade settlement, RMB Banking and RMB bond issue China opportunities

Hong Kong + Asia Opportunities

Hong Kong: How to use the Hong Kong Advantage Most common business activities by overseas businesses Sales and Marketing e.g. local and region sales and marketing operation to promote your own products and services to international buyers Research & Development e.g. HK Science Park, Cyberport, testing new retail product Sourcing and Procurement e.g. access of most dynamic exhibitions, fairs, and events to obtain newest products Regional Office/Regional HQ Management e.g. location to manage Far East agents, suppliers and manufacturing Treasury Functions e.g. Regional or Global Financial and Foreign Exchange Management

Level playing field for all No foreign ownership rules Rule of law, low corruption Freely transferable currency Freedom of information Advanced infrastructure Low tax … or no tax! Hong Kong offers “Business Freedom”

Hong KongSingaporeMainland China Corporate tax16.5% maximum rate17% maximum rateStandard rate = 25% High/New Tech Enterprises (HNTE) = 15% HNTE some regions 0% Income tax15% maximum rate (salaries) 20% maximum rate5 - 45% VAT/GSTNil7% Certain exemptions apply 17% Certain exemptions apply Income not subject to tax Offshore income; dividends; capital gains; tax exemption for interest income from deposits placed with authorised financial institutions Certain remitted income; certain shipping income; certain Singapore dividends; prescribed income of foreign investors arising from certain funds; capital gains All income subject to tax (certain preferential tax treatments for foreign-invested enterprises) Withholding taxNil for dividends, management fees, interest, rent 5.25% for royalties Nil for dividends 10% for royalties 15% for interest 20% for directors 10% for dividends 10% for royalties 10% for interest 10% for capital gains Hong Kong Low Tax Regime Corporate Tax Cut to 16.5%; Income Tax Cut to 15%

InvestHK Sector Specialist Teams Business & Professional Service Consumer Products Financial Services ICT Innovation &Technology Creative Industries Tourism & Hospitality Transportation & Industrial

Enjoy our free services Latest information on business environment and opportunities Personalised service from our European Office in London Contacts for all aspects of business establishment Arranging tailored visit programmes hosted by InvestHK Support and assistance with visa applications, trade regulations etc. Public relations services during your launch/expansion Advice on settling in Hong Kong – housing, schooling, healthcare Invest Hong Kong: how we can help

InvestHK London David Parker +44 (0) Thank you!