10 March 2023 in news

Significant growth opportunities in Hong Kong for Greek export companies

Interview with Mr. Henry Tsoi, Deputy Representative, Hong Kong Economic and Trade Office, and Ms. Paula Kant, Head, Investment Promotion, Invest Hong Kong to Ms. Vicky Makrigianni, Director of International Relations & Regional Policy, SEV

Makrigianni: Dear Mr. Tsoi, Greece is currently trying to intensify its bilateral relations and broaden its trade opportunities. Do you believe there are opportunities for the Greek companies in Hong Kong? If so, in which sectors?

Henry Tsoi: Hong Kong offers ample opportunities to overseas companies and talents, including those from Greece in various sectors.  We are an ideal place for Greek and other foreign companies to do business here as we have a low, simple and competitive tax system, open business environment, world-class infrastructure and multicultural talent pool.  According to latest survey, there were 8,978 Mainland Chinese and foreign companies set up in Hong Kong (i.e. their parent companies are located outside Hong Kong).  The 2022 Startup Survey of InvestHK (a HKSARG department responsible for attracting and retaining foreign direct investment) also revealed that there were 3,985 startups in Hong Kong, reaching a new record high.

These figures are encouraging testament to Hong Kong’s attractiveness to foreign businesses and startups for reasons of our advantages to offer a business-friendly environment, accessibility to funding, and proximity to international and regional markets.  Strategically located in the heart of Asia, Hong Kong has been playing the prime role as a gateway between East and West.  We are the stepping stone for Greek businesses which aspire to explore the fast-growing Mainland Chinese market especially the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) and the rest of Asia.

Hong Kong’s distinctive edges, including the rule of law, free flow of capital, a free trade and investment regime and an efficient and clean government are kept under the “One Country, Two Systems” principle.  We have strong support from the Mainland China for the development of Hong Kong while enjoy close link with the world.

The National 14th Five Year Plan has supported the development of Hong Kong in eight key areas, i.e. the international financial centre, international innovation and technology centre, East-meets-West centre for international cultural exchange, international trade centre, international shipping centre, international aviation hub, centre for international legal and dispute resolution services in theAsia‑Pacific region as well as regional intellectual property trading centre.  Hong Kong welcomes businesses from Greece and other parts of the world to grasp the opportunities in Hong Kong’s latest development.

Makrigianni: Do you see investment opportunities with mutual interest? And if so, in which sectors?

Henry Tsoi: Our mutual interest lies in Greek and other foreign companies investing in Hong Kong and using us as the priority platform of expert professional services, may it be legal, financial, accounting, project management or consultancy services, etc., to grow and expand businesses hand-in-hand.

Taking shipping industry which is an important sector for both Greece and Hong Kong as an example.  Hong Kong has established itself as a premier international maritime centre, ranks the 4th globally in the 2022 Xinhua-Baltic International Shipping Centre Development Index.  The Hong Kong Shipping Register also ranks the 4th globally where over 11% of the deadweight tonnage of the world’s merchant fleet is owned or managed by Hong Kong ship owners.  The presence of a vibrant maritime cluster with nearly 900 shipping-related companies in Hong Kong offers investors a full range of quality professional services for maritime and shipping businesses to advance:

  • Many of the world’s leading ship brokers have established offices in Hong Kong, such as Clarksons and Simpson Spence Young. We are also the home to numerous well‑established professional ship management services providers.
  • Hong Kong has a cluster of international marine insurance companies and a high concentration of banks providing professional ship financing services to fund the businesses. As at end September 2022, there were 84 authorised ship insurers in Hong Kong, of which 32 were foreign insurers while renowned maritime finance banks, such as HSH Nordbank and Credit Agricole, have had a presence in Hong Kong.
  • Hong Kong is an international maritime legal and arbitration centre, supported by a well‑established legal system and a plenty of international law firms in our legal services sector to offer maritime legal services. The High Court of Hong Kong maintains specialist lists to deal with admiralty disputes with its own Admiralty Court Judge.  In 2022, the Hong Kong International Arbitration Centre (HKIAC) received 515 new cases, with 12.5% involving maritime disputes.

Besides, Hong Kong provides preferential tax regimes for businesses related to the shipping industry.  For details, please check the website of Hong Kong Maritime and Port Board – https://www.hkmpb.gov.hk/en/competitive-tax-regime.html . We welcome Greek shipping companies and other businesses to run in Hong Kong so that our professional services sectors have more opportunities to help you close the deals, draft the contracts, get the finances, expand the international connections and hence grow stronger together.

Makrigianni: Dear Ms. Kant, are there any specificities (tax-oriented etc.) that should be taken into consideration by a Greek company potentially doing business in Hong Kong?

Paula Kant: Hong Kong is an open economy embracing Greek and foreign companies from all over the world.  Setting up in Hong Kong is relatively quick and easy, setup costs are low and the overall environment encourages businesses to thrive.  Regarding tax, Hong Kong adopts a territorial source principle of taxation.  All businesses and talents in Hong Kong enjoy one of the most tax-friendly systems in the world.  There are NO sales tax nor value-added tax; NO withholding tax on dividents and interest; NO capital gains tax; NO tax on dividends and NO estate tax in Hong Kong.  Only three direct taxes are imposed with tax allowances and deductions available to eligible tax payers.

The three direct taxes are:

  • Profits tax for the first HK$2 million of profits of corporations is 8.25%. Profits above that amount will be subject to the tax rate of 16.5%. For unincorporated business (i.e. partnerships and sole proprietorships), the two-tiered tax rates will correspondingly be set at 7.5% and 15%.
  • Salaries tax with standard rate of 15%.
  • Property tax of 15%.

Makrigianni: Is Hong Kong a gateway to other Asian markets, which ones and in what way?

Paula Kant: The Mainland Chinese market is undoubtedly the one where no investor can neglect in Asia.  As mentioned above, Greek companies could take Hong Kong as the springboard to get access into the Mainland Chinese and also Asian markets because we know and we can bridge the business practices in different places.  Hong Kong companies are also granted preferential market access into Mainland China under the Mainland and Hong Kong Closer Economic Partnership Arrangement (CEPA).  By setting up a presence in Hong Kong or investing into Hong Kong companies, Greek businesses can benefit from CEPA as well.

On the other hand, Greek businesses can easily reach out to a handful of Mainland Chinese and Asian companies right in Hong Kong as they establish bases in Hong Kong for going international.  There is a remarkable number of companies in Hong Kong which have their parent companies in Japan, Singapore, Taiwan, Korea, etc, alongside those from Mainland China, the US, the UK and a number of European countries.

In a broader sense, Hong Kong is the global gateway connecting between Mainland Chinese, Asian and the overseas markets including Greece.  Hong Kong is within a four-hour flight of major Asian cities and a five-hour flight from half the world’s population.  The Hong Kong International Airport holds leading position in cargo handling as the World’s Busiest Cargo Airport in 2021 (Airports Council International) and the Airport of the Year 2022 (Air Cargo Week: World Air Cargo Awards 2022).  Hong Kong port is among the busiest and most efficient container ports in the world, handling nearly 18 million TEUs in 2021. Every week, about 270 international container vessel sailings connect to nearly 600 destinations worldwide, of which nearly 190 shipping services connect different ports in Asia.

As a free economy with high degree of connectivity, Hong Kong is Asia’s world city – a place where businesses and talents from Greece and around the world come to explore opportunities in the region and grasp the chance to succeed.

Makrigianni: What advice would you give to a Greek exporter who considers exploiting the market of Hong Kong?

Paula Kant: Hong Kong upholds free trade policy and a multilateral trade system.  We are a free port and does not levy any customs tariffs on imports or exports, though there are excise duties on hard alcohol (distilled spirits), tobacco, hydrocarbon oil, and methyl alcohol.  Our customs and licensing procedures, if applicable, are straight-forward for importers/exporters:

===================================

Hong Kong Economic and Trade Office in Brussels (HKETO, Brussels)

The Hong Kong Economic and Trade Office in Brussels (HKETO, Brussels) is the official representation of the Hong Kong Special Administrative Region (HKSAR) Government to the European Union and 15 countries in Europe, including the Greece.  HKETO, Brussels is responsible for promoting Hong Kong in Europe, including bilateral relations between the Greece and Hong Kong.

The following organisations also stand ready to help Greek companies grow their businesses in Hong Kong and Asia at large:

InvestHK

A department of the HKSAR Government helping foreign companies establish a presence in Hong Kong.  InvestHK help with information about setting up, cost models, detailed sector information, lists of corporate service providers, business contacts, networking, etc.

InvestHK has 31 overseas offices and 9 specialised sector teams in Hong Kong.

InvestHK services are customised, confidential, and FREE.

The InvestHK team in Brussels stands ready to help Greek companies!  Over the years we have helped Greek companies from many different sectors – F&B, personal care, shipping and engineering, etc. – set up in HK.

More info on: www.InvestHK.gov.hk

Hong Kong Trade Development Council (HKTDC)

HKTDC helps business-matching when you are looking for a distributor or supplier in Hong Kong.  In addition, HKTDC organises a broad range of trade fairs in Hong Kong.

For more info: www.HKTDC.com

Greek Chamber of Commerce in Hong Kong

Hear from the Greek companies already in Hong Kong: www.greekcham.hk

Makrigianni: Thank you both for this fruitful and interesting interview.