| Why Hong Kong?
Guest Comment is by Jack W. Flader, Jr., managing director & general counsel, Zetland Financial Group Ltd. Hong Kong.
Dear A-Letter Reader:
I've been asked: "Why Hong Kong?" Simple - It's the freest place in the world for people seeking to do international business!
Volumes have been written about Hong Kong's past and future success as the "Gateway to China". However, it's equally important to note that this Special Administrative Region of the People's Republic of China is much more than a conduit for people seeking riches in the Middle Kingdom. It is, quite simply, the freest place in the world for people seeking to do international business.
The "intelligent" people say thumbs up to Hong Kong: The Heritage Foundation in Washington, D.C. and The Wall Street Journal jointly released their Index of Economic Freedom for 2005 where they, yet again, ranked Hong Kong as the world's freest economy (11 years running!). The Cato Institute in Washington, D.C., also has ranked Hong Kong, yet again, "number one" in economic freedom.
Hong Kong is ALL business: There is a joke to describe Hong Kong people that goes "In most parts of the world, people greet each other by saying how are you? In Hong Kong, people greet each other by saying 'How is your business? I have this wonderful business idea,' while they are shaking hands and subsequently exchange business cards." This gives a general idea how Hong Kong people operate in daily life. Seven million people, who, over the centuries and decades, moved to Hong Kong to start a new life or to seek business opportunities, resulted in a hard working, business-minded, determined and creative population. There is no shame in working hard, making money and enjoying the fruits of one's labor...despite the fact those fruits may be gold nuggets!
Government small, tax smaller: The Hong Kong Government seeks to play a cost-effective (translation: limited ) role in the everyday business of Hong Kong with a chief executive, two tier legislative regime and efficient civil service that employs less than 5% of the entire working population. Hong Kong offers a low and fairly simple tax regime with low salary taxes (standard rate of 16%) and corporate profits taxes (17.5%) and property tax. Hong Kong does not tax dividends, capital gains or offshore income/profits and has tax exemption for interest income from authorized financial institutions. Not only are taxes low, but they are only assessed on profits or income derived from doing business within Hong Kong. This "territorial source principle" of tax, which also excludes tax on moneys remitted into Hong Kong, provides an excellent platform from which to administer offshore companies.
Freedom is Hong Kong: Hong Kong enjoys a convertible currency, negotiates and signs economic/trade agreements in its own name, maintains an independent judiciary, police force and immigration/customs department, issues its own passports and an active and free-wheeling media (ranked the highest in Asia for press freedom by Reporters without Borders) with more than 50 daily newspapers and 800 periodicals. Hong Kong also hosts some of the most active trade shows in the world. When people are unhappy with government, they have a right to demonstrate and do so in a civilized fashion.
Top-notch professional services: Over the years, Hong Kong has attracted many international law, accounting, company secretarial, and financial services firms that have laid the foundation for what is recognized as one of the world's leading international professional services industry. New York, London and, yes, Hong Kong!!!
Unparalleled infrastructure: Well planned roads, world-renowned bridges, time effective tunnels, internationally recognized airport, clean, efficient and inexpensive train and subway systems and more buses and taxis than you ever knew existed. Hong Kong has it all and at a standard people expect, but rarely receive in their home cities.
Play hard as well: The old adage "all work and no play makes Jack (yikes!!!) a dull boy" does not apply to Hong Kong. Yes, Hong Kong people work very hard. However, Hong Kong people play hard as well. Whether you want the best Chinese food from every province or Italian, Japanese, French, Thai, Indian...or just about any kitchen available, you will find it in Hong Kong. Nightlife? Although it is far from cheap, it is lively, varied and everywhere! Outdoors? Finish work in the 50th floor of an ultra-modern office building, hike the trails to Victoria Peak, lose yourself in nature, take the Peak Tram to your hotel in Central and eat at a restaurant of virtually any type and at the highest quality. That's what Hong Kong calls "eco-tourism"!!!
Economic freedom, business-minded, non intrusive government, friendly tax regime, the right to do what you like, professional environment, easy movement throughout the city and a lot of good food and great fun. And now there is a Hong Kong Disneyland!!!
Does it get any better than this? That is "why Hong Kong"!
Jack W. Flader, Jr.
E-mail: jflader@zetland.biz
Web site: http://www.offshore.com.hk/
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