Inversió estrangera directa (IED) a Hong Kong SAR, Xina

FDI in Figures

Global foreign direct investment (FDI) flows in the first half of 2021 reached an estimated USD 852 billion, showing stronger than expected rebound momentum, with an increase of 78% of the partial-year growth rate on the previous year according to UNCTAD’s Investment Trends Monitor released on October 2021. The global FDI outlook for the full year 2021 has also improved from earlier projections. The current momentum and the growth of international project finance are likely to bring FDI flows back beyond pre-pandemic levels. Nevertheless, the duration of the health crisis and the pace of vaccinations, especially in developing countries, as well as the speed of implementation of infrastructure investment stimulus, remain important factors of uncertainty. Other important risk factors, including labour and supply chain bottlenecks, energy prices and inflationary pressures, will also affect final year results. (UNCTAD, October 2021). Covid’s impact on developing markets and shifting investment from China are major trends that will impact foreign investment in 2022.

According to the 2021 World Investment Report released by UNCTAD, Hong Kong received USD 119 billion of FDI in 2020, almost 62% more than in 2019 (USD 74 billion), driven mainly by an increase in intracompany loans and reinvested earnings. While representing a small share of FDI, the rebound in cross-border M&A sales to USD 11 billion (from - USD 1 billion in 2019) also contributed to this increase, thanks to many cases of Chinese MNEs consolidating affiliates in Hong Kong. Given the economy's sizeable intra-company flows and its close ties with China, which contributes 28% of its FDI stock, the rise in FDI in Hong Kong reflects corporate restructuring, particularly by Chinese multinationals, rather than new investment. It ranks third in terms of FDI inflows after the US and China in 2020. It is also the fourth largest country in terms of FDI outflows, registering USD 102 billion in 2020. The stock of FDI reached USD 1 884 billion in 2020. Hong Kong is a hub for foreign MNEs' regional headquarters, inflows were mostly invested in services sector operations (including regional headquarters and finance functions that facilitate indirect FDI flows). The main investing countries are China, the British Virgin Islands, the United Kingdom, Bermuda and Japan. The vast majority (around three-quarters) of investments are intended for financial activities: holding, real estate, finance, insurance, banking, etc.

Hong Kong is attractive due to several strong factors: its strategic position (it is a gateway to the Chinese market), its status as a free port; its simple tax system that provides many incentives, good infrastructure and judicial security. According to the last Doing Business 2020 ranking issued by the World Bank, Hong Kong ranks 3rd out of 190 countries in business climate, rising one spot compared to last year. Hong Kong has one of the world’s best regulatory systems for paying taxes. In 2019, Hong Kong made dealing with construction permits easier by enhancing its risk-based approach to inspections.

The latest United Nation Asia-Pacific Trade and Investment Trends Report provides additional information on FDI in Hong Kong and Asia-Pacific in 2021 and 2022.

What to consider if you invest in Hong Kong SAR, China

Strong Points

Hong Kong is an international leader in terms of international trade, a services centre with high added value and the bridgehead to one of the largest production bases in the world, China. Hong Kong has a sound economy and a stable and efficient financial and banking system. Key strong points for FDI in Hong Kong include:

• Favourable tax measures
• The transparency of local institutions 
• Freedom of information 
• Availability of qualified human resources  
• Its advantageous geographical location in Asia

Weak Points

Disadvantages for FDI in Hong-Kong include:

• High cost of property and work space (offices, shops, etc.)
• High cost of salaries, compared to other Asian countries such as Mainland China and India
• The excessive importance of the financial sector in national economy

Government Measures to Motivate or Restrict FDI

Hong Kong is a free territory for investments, which are in fact encouraged by the government with a favourable taxation policy and light legislation. Foreign companies can be set up freely, register their brands and the director of the company doesn't have to be a citizen nor a resident of Hong Kong. The government has also put in place numerous initiatives to support business innovation.

Bilateral investment conventions signed by Hong Kong SAR, China

To see the list of investment treaties signed by Hong Kong, consult UNCTAD's International Investment Agreements Navigator.