1. 2007 SCoRP P. 1 2007 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong

2. 2007 SCoRP P. 2 (i)Survey conducted annually since early 1990s: Covers RHQs and ROs (ii)Since 2001: Also covers LOs (iii)Since 2004: Also collects views of LOs (iv)Since 2006: Survey name revised Definitions of RHQ, RO and LO revised Background

3. 2007 SCoRP P. 3 (i)To enumerate number of RHQs, ROs and LOs in HK representing parent companies located outside HK (ii)To obtain basic information of these companies (iii)To seek their views on HK as a location for setting up RHQs/ROs and LOs Survey Objectives

4. 2007 SCoRP P. 4 Covers companies in HK taking charge of business/operations in HK or in the region on behalf of parent companies located outside HK  Reference date: 1 June 2007 Survey Coverage

5. 2007 SCoRP P. 5 How is a company classified as an RHQ, RO or LO? Taking charge of business/operations on behalf of its parent company located outside HK? Non-RHQ/RO/LO No Yes Geographical responsibility ? LO HK only RHQ Yes In the region Any managerial control over offices in the region? RO (i.e. only coordinates offices and/ or operations in the region) No

6. 2007 SCoRP P. 6 Country/Territory of Location of Parent Companies No. of companies

7. 2007 SCoRP P. 7 Geographical Responsibility of RHQs and ROs in the Region (other than HK) No. of companies

8. 2007 SCoRP P. 8 No. of companies Major Line of Business of RHQs, ROs and LOs

9. 2007 SCoRP P. 9 Major Line of Business of Parent Companies No. of companies

10. 2007 SCoRP P. 10 Views on Importance of Factors for Choosing Location for Setting up RHQs/ROs and LOs *In descending order of importance RHQs/ROs * 1.Low and simple tax system 2.Free flow of information 3.Corruption free government 4.Absence of exchange controls 5.Rule of law and independent judiciary 6.Political stability and security LOs * 1.Low and simple tax system 2.Free flow of information 3.Corruption free government 4.Political stability and security 5.Absence of exchange controls 6.Rule of law and independent judiciary

11. 2007 SCoRP P. 11 Factor FavourableUnfavourable Views on Favourable Factors for HK as a Location for Setting up RHQs/ROs Low and simple tax system Free flow of information Absence of exchange controls Corruption free government Communication, transport and other infrastructure 68% 67% 64% 63% 1% <0.5% 1% <0.5% 1%

12. 2007 SCoRP P. 12 Factor FavourableUnfavourable Views on Unfavourable Factors for HK as a Location for Setting up RHQs/ROs Availability and cost of residential accommodation Availability and cost of business accommodation 16% 20% 28%

13. 2007 SCoRP P. 13 Factor FavourableUnfavourable Views on Favourable Factors for HK as a Location for Setting up LOs Low and simple tax system Free flow of information Absence of exchange controls Corruption free government Free port status 64% 61% 59% 58% <0.5% 1% <0.5%

14. 2007 SCoRP P. 14 Factor FavourableUnfavourable Views on Unfavourable Factors for HK as a Location for Setting up LOs Availability and cost of residential accommodation Availability and cost of business accommodation 16% 20% 24%

15. 2007 SCoRP P. 15 Views on Overall Business Environment in HK as a Location for Setting up RHQs/ROs and LOs Deteriorated 6% No comment 17% Improved 29% Same 49% Deteriorated 5% No comment 19% Improved 29% Same 47% RHQs/ROsLOs Comparing June 2007 with June 2006

16. 2007 SCoRP P. 16 Views on Effect of CEPA Implemented since January 2004 on RHQs/ROs and LOs Very much beneficial 3% Negatively affected 1% To some extent beneficial 27% Not affected 52% No comment 17% RHQs/ROsLOs Very much beneficial 3% Negatively affected 1% To some extent beneficial 23% Not affected 54% No comment 19%

17. 2007 SCoRP P. 17 Effect No comment 17% No 73% Yes 10% Setting up new business expansion plans Advancing business expansion plans Views on Effect of CEPA on Investment Activities of RHQs/ROs and LOs Whether investment activities affected ? No comment 20% Yes 8% No 73% RHQs/ROsLOs

18. 2007 SCoRP P. 18 2007 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong