1. Welcome to Hong Kong Asia’s Business Capital A Secure Base to Access Opportunities Simon Galpin Director-General 15 April 2010

2. RIGHT PLACE Hong Kong’s Enduring Advantages

3. One Country, Two Systems Rule of law and independent judiciary Level playing field and no foreign ownership restrictions Political stability and pro-business governance The World’s Freest Economy for 16 consecutive years Hong Kong negotiates and signs its own economic and trade agreements and is a full and separate member of the WTO and APEC

4. Hong Kong’s Strategic Location: Gateway to China & Heart of Asia The world's 4 th busiest international passenger airport Around 90 scheduled airlines operating some 750 flights per day to about150 destinations One of the world’s busiest container ports - projected to reach 27.9 million twenty-foot equivalent units (TEUs) in 2010

5. Hong Kong continues to have the lowest tax misery in Asia Pacific and 3 rd lowest in the world, scoring 41.5 Forbes Tax Misery Index 2009

6. Hong KongSingaporeMainland China Corporate Tax16.5% maximum rate17% maximum rate Standard rate = 25% High/New Tech Enterprises (HNTE) = 15% HNTE some regions 0% Income Tax 15% maximum rate (salaries) 20% maximum rate5 - 45% VAT/GSTNil 7% 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 Tax Nil 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 A Comparison of Tax Rates

7. World-Class Infrastructure Fully liberalised telecom sector and advanced telecommunications networks The world’s most affordable internet and mobile phone services with penetration rates among the highest in the world. Ranked the 8 th most e-ready economy in the world by Economist Intelligence Unit. Ranked Asia’s most innovative economy by Global Innovative Index. Ranked the 3 rd highest average broadband connection speed by US-based network provider Akamai Technologies.

8. Asia’s Regional Finance Centre China’s International Financial Capital Home to 68 of the world’s 100 largest banks Asia’s 3 rd largest stock market, 7 th in the world World’s 6 th largest foreign exchange centre Largest venture capital fund centre in Asia Ranked 1 st worldwide in capital raised in IPOs in 2009 Unrestricted capital inflow and outflow Full currency convertibility; independent of RMB Source: HKEx, HKTDC, World Federation of Exchanges, Time Magazine RankingCity 1London, New York 3Hong Kong 4Singapore 5Tokyo 6Chicago 7Zurich 8Geneva 9Shenzhen, Sydney 10Shanghai 11Toronto … 15 Beijing, San Francisco The Global Financial Centres Index (GFCI) 7, City of London Corporation, March 2010

9. Multilingual, Highly Trained, Flexible and Mobile Workforce Mix of international market savvy and Chinese/Asian business culture English the usual language of business Strong work ethic and integrity Home to Asia’ leading universities and business schools Quality Migrant Admission Scheme

10. Cosmopolitan Lifestyle & Easy Living Environment Countryside – Over 40% is protected country parks and beaches Sports – mix of Asian and Western sports, plus calendar of international events Arts/culture – world-class venues; major events and annual festivals Food – local, regional, international restaurants/ supermarkets Education – more than 50 international schools

11. RIGHT TIME New Opportunities

12. Increasing Foreign Direct Investment Hong Kong is the world’s 7 th and Asia’s 2 nd largest FDI recipient. It has the highest FDI stock in Asia In 2008 Hong Kong’s FDI inflows increased 15.9% year-on-year when for some developed economies FDI inflows halved Ranked top of UNCTAD’s FDI Performance Index Hong Kong is also the second biggest outward investor in Asia, after Japan Year2003200420052006200720082009 FDI inflows to HK (US$ billion) 13.634.033.645.154.463.048.4* FDI outflow from HK (US$ billion) 5.545.727.245.061.1 59.9 51.9* Source: Annual World Investment Reports released by UNCTAD United Nations Conference of Trade & Development *Provisional figures

13. Asia’s Leading City for International Business 3,580 regional headquarters and offices Source: 2009 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong, Census & Statistics Dept, HKSARG

14. CEPA Brings Benefits to Trade in Goods and Services Trade in GoodsTrade in Services CEPA applies to: All finished goods Goods exported direct from Hong Kong to the Mainland 42 service sectors Benefits vary per sector Benefits: Removes all export duties Greater market access than WTO rules: –Lower market entry criteria (capital, trading history etc.) –Can establish wholly owned providers Eligibility: “Made in Hong Kong” products, under specified ‘Rules of Origin’ Companies must have “substantive operations” in HK Must obtain certification from relevant HK authorities

15. Increasing Visitor Arrivals Source: HKTB

16. Renminbi (RMB) Businesses in HK Hong Kong has been allowed to conduct RMB business for individuals, including RMB deposits, remittances, exchange business and RMB bank cards in the territory since early 2004 RMB deposits in HK increased to RMB 64 billion as of January 2010 Hong Kong is the first place outside the Mainland that possesses a RMB bond market Qualified Domestic Institutional Investor (QDII) Mainland launched a pilot programme for Hong Kong and five Mainland cities to settle cross-boundary trade in RMB Potential for Hong Kong as a regional Renminbi clearing centre

17. Of the 1,267 companies listed in HK, 470 or 37% originated from Mainland (April 2009, HKEx) Of the US$1,469 bn market capitalisation, US$864 bn or 59% from Mainland (April 2009, HKEx) As at end 2009, 4,792 Mainland companies with subsidiaries in HK, involving a total investment amount of US$29.3 bn (MOFCOM) 96 Mainland companies with regional headquarters in Hong Kong; 127 companies with regional offices in Hong Kong to oversee business activities in the region (June 2009, Census & Statistic Dept.) 934 new investment projects approved in 2009, with an investment amount of US$8.5 bn (MOFCOM) Mainland Companies in Hong Kong

18. Investment in Infrastructure

19. Business and Professional Services Financial Services Four Pillar industries Tourism Trade and Logistics

20. Testing and Certification Medical Services Innovation and Technology Cultural and Creative Industries Environmental Industry (in particular solar energy and R&D) Educational services Opportunities in 6 New Areas: Other Opportunity: Wine

21. Italian Community in Hong Kong The Italian community of 1,800 in HK More than 400 Italian companies in HK representing a vibrant and diverse group In 2007, Italy was the third largest EU exporter to Hong Kong’s, with two-way trade totaling US$8.3billion Italian companies in Hong Kong include Assicurazioni Generali, Banca Monte Dei Paschi di Siena, Banca Popolare- Societa Cooperativa, UBI BANCA, Benetton, Bvlgari, Costa Crociere, Diadora, Diesel, Dolce & Gabbana, Ferragamo, Ferrari, Furla, Gas, Geox, Giorgio Armani, JAS, Prada, Sacmi, Snatt Logistica, Tod’s, UniCredito Italiano, Valentino, Versace …

22. InvestHK : How can we help? Support overseas, Mainland and Taiwanese businesses to set up and expand in Hong Kong Our aim is for companies to make an informed choice and put the right part of their business in Hong Kong for the right reasons in order to be more competitive and make more profit Provide free advice and customised services to help your business succeed The Department for Foreign Direct Investment Relevant up-to-date information to aid planning Facilitation of set-up / expansion Matchmaking and networking support PR and marketing support for launch / expansion

23. Get in touch ! www.investhk.gov.hk Email: enq@InvestHK.gov.hk Tel: (852) 3107 1000 VIDEO