Hong Kong also offers export privileges to China under its bilateral Closer Economic Partnership Arrangement with the mainland.

Hong Kong Trade Development Council executive director Fred Lam said Hong Kong offered wide opportunities for new investors, particularly in the services sector.

"Hong Kong has free-market policies and offers high flexibility in operations. Although it is under the control of the Chinese government, the city is independent in terms of its strong economic fundamentals and its highly developed education and infrastructure," he said.

Hong Kong was returned to Chinese rule in 1997 and became a special administrative region. It operates under the "one country, two systems" principle, which means it has an independent administration and a separate legal system. China has given Hong Kong 50 years to operate independently.

Foreign investors are able to hold 100-per-cent ownership of business ventures, and corporate taxes range from zero to 17 per cent.

Lam said Hong Kong was an ideal place for most services, especially for small- and medium-sized companies. Tax rates are very low, and there are innovative ideas for risk management.

Businesses that can best take advantage of the closer economic partnership pact with China include finance, tourism, entertainment and pharmaceutical ventures.

Tourism companies are highlighted for Thai investors, because Thailand has highly competitive advantages in this sector, Lam said.

On average, Hong Kong attracts about 24 million tourists a year, even though the city has only 7 million residents.

The Thai consul-general in Hong Kong, Vichai Varasirikul, said Thai restaurants, hotels and related businesses had a high potential for success in both Hong Kong and Macau.

Both cities have strong demand for services from tourists and residents alike.

Authentic Thai food is greatly appreciated, he said, adding that Thai enterprises could succeed easily because of the competitive advantages of Thai business operations.

He said Hong Kong had about 100 Thai restaurants but that few were Thai-owned.

The city's per-capita gross domestic product is US$26,000 (Bt928,000), one of the highest among Asian cities.

Its economic growth is expected to reach 6.5 per cent this year. In the first three quarters, the figure exceeded 6.8 per cent.

Vichai also advised Thai enterprises to consider investment in hotels and restaurants in Macau, since it attracts up to 18 million high-income tourists per year - an advantage seldom recognised by Thai investors.

Invest Hong Kong's associate director-general Mark Michelson said the city was among the world's top 10 services providers. Investors would gain many advantages, not only in terms of business benefits but also business knowledge from the world-class enterprises.

Invest Hong Kong reports that 24 Thai companies have so far invested in Hong Kong.

The city's largest investors are Chinese, accounting for 20 per cent of Hong Kong's total foreign direct investment. They are followed by investors from the Netherlands, the US, Japan, Singapore and the UK.

Hong Kong's Census and Statistics Department says the inflow of foreign direct investment rose significantly last year, to $35.8 billion. Foreign direct investment in Hong Kong reached $20.66 billion in the first half of this year.

Petchanet Pratruangkrai

The Nation

Hong Kong