Why Do Foreign-Invested Enterprises Favor Hong Kong? Unveiling the Unique Advantages and Opportunities

Why Do Foreign-Invested Enterprises Choose Hong Kong? Exploring Its Unique Advantages and Opportunities

In today’s evolving global economic landscape, foreign-invested enterprises increasingly look to a familiar yet vibrant city - Hong Kong - when choosing a regional headquarters or a gateway to the Asian market. Despite recent global uncertainties, Hong Kong has maintained its status as an international financial center, thanks to its unique institutional advantages, mature legal system, and highly efficient business environment that continue to attract investment from around the world.

1. A Free and Open Economic System The Key Attraction for Foreign Companies

Hong Kong’s appeal to foreign investors is largely due to its highly liberalized economy. According to the World Bank’s 2025 Doing Business Report, Hong Kong ranks among the top globally, particularly excelling in key indicators such as cross-border trade and contract enforcement. This efficient and user-friendly business environment provides immense operational convenience for foreign enterprises.

Hong Kong maintains a low tax regime, with a corporate profits tax rate of only 16.5%, and imposes no value-added tax VAT or sales tax. For multinational corporations, this represents an attractive tax structure. Moreover, capital flows freely in and out of Hong Kong with minimal foreign exchange controls, offering companies greater flexibility in managing global resources and investments.

2. Rule of Law and Professional Services Foundations for Stable Growth

The rule of law remains one of Hong Kong’s most critical competitive advantages. As a common law jurisdiction, it boasts an independent judiciary and transparent legal procedures, which provide foreign investors with predictable legal protections. Hong Kong's courts and arbitration institutions are internationally recognized for their credibility in handling contract disputes and intellectual property issues.

At the same time, Hong Kong hosts a wealth of world-class professional service providers in fields such as law, accounting, auditing, and consulting. These services offer comprehensive support to businesses. For instance, the Big Four accounting firms - PwC, Deloitte, EY, and KPMG - all have offices in Hong Kong, providing foreign companies with integrated solutions in compliance, finance, and risk management.

3. A Gateway Between China and the Global Market

One of Hong Kong’s most distinctive roles is that of a super connector. On one hand, it is part of China and benefits from the One Country, Two Systems framework; on the other, it operates under an internationalized market mechanism and enjoys linguistic and cultural compatibility with both East and West. This dual advantage makes Hong Kong the preferred entry point for many foreign companies seeking access to mainland China.

Take the technology sector, for example. Numerous U.S. and European tech firms establish regional headquarters in Hong Kong before expanding into the Greater Bay Area and the broader Chinese market. Recently, Apple announced plans to open a new research center in Hong Kong, recognizing its strengths in talent availability, research resources, and proximity to mainland supply chains.

With the advancement of the Guangdong-Hong Kong-Macao Greater Bay Area strategy, Hong Kong’s synergies with cities like Shenzhen and Guangzhou are growing stronger. Improved infrastructure, including the Hong Kong-Zhuhai-Macau Bridge and the Guangzhou-Hong Kong Express Rail Link, further enhances its regional hub function.

4. A Talent Hub with an International Lifestyle

Talent is a core driver of enterprise development. Hong Kong is home to a world-class higher education system, with institutions like the University of Hong Kong and the Hong Kong University of Science and Technology consistently ranked among the top universities globally. These schools produce a steady stream of professionals with international perspectives.

Moreover, Hong Kong’s bilingual advantage - fluency in both English and Mandarin - combined with its high quality of life and strong public safety record, attracts a large number of overseas professionals. According to government data up to mid-2025, the number of expatriate professionals in Hong Kong increased by more than 12% year-on-year. Particularly in sectors such as fintech, biotechnology, and green energy, Hong Kong is emerging as a globally competitive talent hub.

5. New Opportunities in Post-Pandemic Recovery

After navigating the challenges brought by the pandemic, Hong Kong is accelerating its recovery as a global financial and commercial center. Since 2025, the Special Administrative Region has introduced a series of measures to attract investment, including streamlined immigration policies, expanded tax incentives, and the establishment of dedicated investment funds aimed at drawing more foreign enterprises to set up operations.

Notably, in early 2025, Hong Kong successfully hosted the Global Investment Summit, attracting hundreds of representatives from multinational companies across Europe, the Middle East, and Southeast Asia. This event not only demonstrated Hong Kong’s openness to foreign investment but also provided global investors with deeper insights into the local market.

Conclusion

In summary, foreign-invested enterprises choose Hong Kong because it offers a free and open market environment, a robust legal system, and efficient administrative processes. More importantly, Hong Kong serves as a vital bridge connecting China and the world. As the global economic center continues to shift eastward, Hong Kong’s strategic importance becomes even more pronounced. Whether multinational companies looking to expand into Asia or local enterprises aiming to enhance their global competitiveness, Hong Kong will remain an indispensable player on the world stage.