HSBC Treasury Management Profiles 2018 -

Current section, Introduction

Introduction

Hong Kong is the world’s most services-oriented economy, with the services sector contributing more than 90 per cent of GDP1. An attractive location for foreign direct investment – in 2016, the territory received total inflows of USD108 billion2 – Hong Kong serves as the regional headquarters (1,413) or regional offices (2,339) multinational companies managing operations in Asia Pacific3, and in particular the Chinese mainland. Of the 3,371 companies, 77 per cent were responsible for business in the Chinese mainland4. Hong Kong is becoming increasingly integrated with China, its largest export and import partner. Hong Kong is the largest source of overseas direct investment in the Chinese mainland (44.7 per cent of all overseas funded projects in China in 20165), while the Chinese mainland is a leading investor in Hong Kong. In June 2017, it signed the Economic and Technical Cooperation and Investment Agreement under the framework of CEPA (Closer Economic Partnership Agreement, signed by the two countries in 2003)6. This latest agreement gives preferential treatment to local companies in both service and non-service sectors. Hong Kong’s GDP grew 4 per cent year-on-year in the first half of 20177, supported by robust trade figures (the value of total exports of goods increased 8.8 per cent year-on-year8), strong employment figures (the unemployment rate was 3.1 per cent9) and an upturn in the global economy.

To read the detailed report, please click on the Download PDF option

Legal and regulatory

  • Foreign exchange accounts and domestic currency (HKD) accounts can be held by residents both domestically and abroad. Resident domestic currency accounts are freely convertible
  • Non-resident bank accounts are permitted in both foreign and domestic currency. Non-resident domestic currency accounts are freely convertible
  • Residents and non-residents are permitted to hold RMB accounts
  • Hong Kong does not apply exchange controls

To read the detailed report, please click on the Download PDF option

Taxation

  • Hong Kong adopts the ‘territorial-source principle’ in charging profits tax. Both resident and non-resident companies pay tax on Hong Kong-sourced income
  • The corporate tax rate is 16.5 per cent. Unincorporated businesses are taxed at a standard rate of 15 per cent
  • There is no withholding tax on interest and dividends paid to resident or non resident companies

To read the detailed report, please click on the Download PDF option

Payment instruments and systems

  • Electronic credit transfers and cheques are used for both high-value corporate and low-value retail payment transactions. Credit transfers and cheques can be denominated in HKD, USD and RMB. A cross-border, one-way, e-check clearing service of HKD, USD and RMB e-Checks between Hong Kong-Guangdong and Hong Kong-Shenzhen was launched in July 2016. Nine banks offer the e-Cheque issuance service via their internet/mobile banking platforms. E-money schemes are hugely popular – 99 per cent of all residents use e-money cards
  • Hong Kong operates a number of national payment systems: HKD, USD, EUR and RMB payments are cleared by their respective CHATS RTGS payment systems. There is a CLG system for cheques and an ECG system for low-value payments

To read the detailed report, please click on the Download PDF option

Cash management

  • Domestic and cross-border notional pooling and cash concentration is permitted between resident and non-resident companies
  • A range of collections services are available, including lockbox services

To read the detailed report, please click on the Download PDF option

Electronic banking

  • Electronic banking is commonplace in Hong Kong. There is no bank-independent electronic banking standard
  • Internet and mobile banking services are provided by all of Hong Kong’s banks for both corporate and retail purposes
  • An EBPP platform allows individuals and companies to make payments via online or mobile bank accounts. Nineteen banks provide the EBPP service at present

To read the detailed report, please click on the Download PDF option

 

 


To read the full report on Hong Kong and to discover more on these and other topics, including banking and trade, please click on the Download PDF option.

Sources:

1 http://hong-kong-economy-research.hktdc.com

2 UNCTAD World Investment Report 2017

3 https://www.censtatd.gov.hk/hkstat/sub/sp360.jsp?productCode=B1110004

4 http://hong-kong-economy-research.hktdc.com

5 http://china-trade-research.hktdc.com

6 http://www.info.gov.hk/gia/general/201706/28/P2017062800631.htm

7 http://www.info.gov.hk/gia/general/201708/11/P2017081100489.htm

8 www.censtatd.gov.hk: External merchandise trade statistics for June 2017 [27 Jul 2017]

9 HKSAR Census and Statistics Department; Unemployment and underemployment statistics for April - June 2017 [18 Jul 2017]

 

Additional sources:

  • UNCTAD World Investment Report 2017
  • Invest HK. Hong Kong: The Regional Business Hub
  • Hong Kong Economy: The Government of the Hong Kong Special Administrative Region
  • HKSAR Census and Statistics Department

The materials contained on this page were assembled in June 2017 (unless otherwise dated).

 

Disclaimer

This document has been produced by HSBC Bank plc and members of the HSBC Group (“HSBC”), together with their third-party contributor, WWCP Limited. We make no representations, warranties or guarantees (express or implied) that the information in this document is complete, accurate or up to date. We will not be liable for any liabilities arising under or in connection with the use of, or any reliance on, this document or the information contained within it. It is not intended as an offer or solicitation for business to anyone in any jurisdiction. The information contained in this document is of a general nature only. It is not meant to be comprehensive and does not constitute financial, legal, tax or other professional advice. You should not act upon the information contained in this document without obtaining your own independent professional advice. The information contained in this document has not been independently verified by HSBC.

This document contains information relating to third parties. The information does not constitute any form of endorsement by these third parties of the products and/or services provided by HSBC or any form of cooperation between HSBC and the respective third parties.

Under no circumstances will HSBC or the third-party contributor be liable for (i) the accuracy or sufficiency of this document or of any information, statement, assumption or projection contained in this document or any other written or oral information provided in connection with the same, or (ii) any loss or damage (whether direct, indirect, consequential or other) arising out of reliance upon this document and the information contained within it.

HSBC and the third-party contributor do not undertake, and are under no obligation, to provide any additional information, to update this document, to correct any inaccuracies or to remedy any errors or omissions.

No part of this document may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of HSBC and the third-party contributor. Any products or services to be provided by HSBC in connection with the information contained in this document shall be subject to the terms of separate legally binding documentation and nothing in this document constitutes an offer to provide any products or services.