While embracing its proud heritage, Hong Kong is looking firmly to a future that looks set to rival its glittering past.

A city of contrasts and colour, of gleaming skyscrapers and flashing neon lights, Hong Kong is visually stimulating; it is also culturally rich and socially interesting. Residents and visitors enjoy some of the world’s best shopping and dining, and an array of local and international cultural and sporting events rounds out the busy social calendar. The heart of the city is bustling, packed as Hong Kong is with seven million souls, but one does not have to venture too far afield to find peace and quiet and a patch of green.

British rule and capitalist fervour have left a legacy of colonial architecture and charming idiosyncrasies. But beneath the glitz, Hong Kong’s heart is pure Chinese. Blue chip multinationals defer to Fung Shui masters and incense-rich temples welcome worshippers offering prayers and fruit to ensure good fortune.

Hong Kong is also one of the world’s safest cities, with a crime rate of less than 1300 cases per 100,000 people, and declining. The 28,000-strong police force is rated among the world’s best. And the Independent Commission Against Corruption uses investigation, prevention and education to ensure Hong Kong is one of the least corrupt places in the world.

A place for doing business

In addition to its enviable quality of life, which is not to be discounted as a pull for investment, the city holds many advantages as a place for doing business. These include low and simple taxes, a sound legal system, a level playing field for foreign and local companies, and a skilled workforce – and have helped make Hong Kong the second largest FDI recipient in Asia-Pacific, with $34bn in 2004.

“We are growing from nearly all directions,” reports Mike Rowse, director-general of investment promotion at Invest Hong Kong. The agency saw a 44% increase in completed projects going into Hong Kong last year, a dramatic rise that has been sustained with another all time high in 2005. “We are seeing huge numbers of regional headquarters coming here and even some relocations. And the already attractive low and simple tax system is becoming more appealing. Effective in February 2006, the estates duty will be abolished.”

A perennial favourite location for Asian regional headquarters, Hong Kong’s location in the heart of Asia makes it an excellent choice as a regional centre for all manner of management, sales and logistics operations. Through its top-notch transport infrastructure, Hong Kong provides easy access to the whole of the Asia Pacific region, not just China.

Ideal situation

Thanks to the unique political structure and business environment of Hong Kong vis-à-vis mainland China (being one country yet two systems), Hong Kong is ideally situated to serve as the official gateway to the mainland and as the hub of the booming Greater Pearl River Delta region. This status has only been enhanced by the Closer Economic Partnership Arrangement (CEPA), a free trade agreement with China from which investors in Hong Kong can also benefit greatly. The opportunity to be in close proximity to China’s vast market while being based in the home of the world’s freest economy, with unfettered information flow and a business-friendly, clean government, is a highly tempting opportunity for foreign companies.

Equally, for Chinese companies looking to expand abroad, Hong Kong provides language and cultural affinity, international experience and expertise, and a strong capital market for raising funds. “Investment from the mainland is our fastest growth market right now,” says Mr Rowse. “This is driven by the Chinese government encouraging Chinese companies to go out there into the world and by the good relationship between Hong Kong and the mainland.”

Here too, CEPA can only help. The third leg of the agreement, recently implemented, deals with trade and investment and should make it even easier for Chinese companies to invest in Hong Kong by simplifying regulations and speeding up processes. “The combination of Chinese culture and experience found here in Hong Kong coupled with our international business practices is invaluable for these mainland companies as they expand outward,” Mr Rowse says.

Highly trained workforce

They, and other investors from around the world, can also make use of Hong Kong’s well-educated, hardworking and highly trained workforce. Each year Hong Kong’s 11 institutions of higher education, including the Hong Kong University of Science and Technology, the University of Hong Kong and the Chinese University of Hong Kong, enrol some 14,000 first-year students.

Strong research support institutions help to spin technologies and projects out of these well-regarded universities. These include Hong Kong Applied Science and Technology Research Institute Company Ltd, which provides world-class support for R&D projects; Hong Kong Jockey Club Institute of Chinese Medicine Ltd, for R&D and the commercialisation of traditional Chinese medicine; Hong Kong Science and Technology Parks Corporation, which provides infrastructural support and business development programmes to technology-based companies; and Cyberport, a $1.5bn centre for the development of wireless applications, digital technology and software.

Blessed with countless competitive advantages, the one area where Hong Kong faces a serious challenge is in overcoming a perception that it is too expensive. But, although it cannot compete with many other Asian locations on sheer cost, it can on cost effectiveness. In other words, the costs in Hong Kong are not high given what one gets in return, not least of which is peace of mind. “You know things will run smoothly here,” Mr Rowse says. “It’s value for money.”

Access to Asia’s exciting markets, plus skilled workers, low taxes, a free economy, world-class infrastructure, a strategic location, a stable and safe environment and an unrivalled quality of life – that is indeed quite a value proposition.

Interested parties should contact:

Invest Hong Kong a Tel: (+852) 3107 1000

Fax: (+852) 3107 9007

E-mail: enq@investHK.gov.hk

Website: www.investHK.gov.hk