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This publication is available at https://www.gov.uk/government/publications/exporting-to-hong-kong/exporting-to-hong-kong
1. Hong Kong export overview
Hong Kong is the world’s eighth largest trading economy and one of Asia’s leading financial and business centres.
It has been ranked as the world’s freest economy in the Index of Economic Freedom for 20 consecutive years.
Contact a Department for International Trade (DIT) Hong Kong export adviser for a free consultation if you’re interested in exporting to Hong Kong.
About 120 British companies have regional headquarters in Hong Kong. Another 200 have regional offices.
Benefits for UK businesses exporting to Hong Kong include:
- open, transparent and competitive market
- largely English speaking
- strong intellectual property rights protection
- well established and familiar rule of law
- proximity to Pearl River Delta (PRD), an important Chinese region
Strengths of the Hong Kong market include:
- popular base for hosting regional headquarters or representative offices
- leading telecommunications hub for Asia Pacific region
- premier offshore centre for trading in the Renminbi (RMB) Chinese currency
- world’s busiest airport for international cargo
- one of the world’s busiest container ports
- the second largest private equity centre in Asia
- the third largest stock market in Asia and the seventh largest in the world
Hong Kong is ranked third in the World Bank’s Ease of Doing Business index. It presents fewer challenges for UK companies than most overseas markets.
3. Growth potential
3.1 Economic growth
Hong Kong is an open economy and an international financial centre that acts as a conduit into and out of China for both goods and capital.
Hong Kong’s growth has averaged 4.5% over the last 10 years. The growth forecast for 2015 is 1 to 3%.
The economy grew 2.5 % (year-on-year) during 2014. Growth in 2015 is expected to be constrained by the slow global economic recovery impacting on exports of goods. Domestic demand will remain stable.
The 4 main economic sectors of Hong Kong are:
- financial services
- trade and logistics
- professional services
These sectors combined provide 57% of Hong Kong’s Gross Domestic Product (GDP). The services sector now accounts for 93% of Hong Kong’s GDP.
The economy was boosted by 61 million visitors in 2014 which included 48 million from Mainland China. This is equivalent to around 8.4 times Hong Kong’s population.
Hong Kong’s economy is separate from that of Mainland China. It has its own:
- legal system
However, Hong Kong’s economy is becoming increasingly connected with mainland China’s through the Closer Economic Partnership Agreement (CEPA).
The Hong Kong economy has been transformed over the past 2 decades. Much of its manufacturing has moved to the neighbouring PRD region of southern China.
Hong Kong is a springboard into the Chinese market. It is also a business hub for the Asia Pacific region. Hong Kong is:
- situated in a central position in east Asia
- within 5 hours flying time of half the world’s population
- a major base for the regional operations of international businesses
Hong Kong is the second largest Foreign Direct Investment (FDI) recipient in Asia, after mainland China. It has held this position for 14 consecutive years. Annual FDI into Hong Kong amounted to USD 77 billion in 2013.
3.3 Free Trade Agreements (FTAs)
CEPA is the first free trade agreement ever concluded by mainland China and Hong Kong. It aims to liberalise markets for goods and services.
All products of Hong Kong origin, except for a few prohibited articles, can be imported into the mainland tariff free under CEPA. Hong Kong service suppliers enjoy preferential treatment in entering into the mainland market in various service areas. There are also agreements or arrangements on mutual recognition of professional qualifications.
4. UK and Hong Kong trade
UK goods exports were £6.3 billion in 2014, an 11% increase on 2013. Hong Kong is the UK’s second largest market for goods in Asia Pacific (after Mainland China), and 11th largest worldwide.
The top UK exports to Hong Kong in 2014 were:
- miscellaneous manufactured articles
- power generating machinery and equipment
- telecommunications and sound recording and reproducing equipment
- non-ferrous metals
- electrical machinery and appliances
- professional, scientific and controlling instruments and appliances
- beverages, spirits and vinegar
- plastics and plastic products
- clocks and watches
- meat and meat preparations
The majority of these items are ultimately destined for other markets in Asia and around the World. In 2013 the value of goods re-exported by Hong Kong was 86% of the value of goods that it imported.
5. Opportunities for UK businesses in Hong Kong
Department for International Trade (DIT) provides free international export sales leads from its worldwide network. Search for export opportunities.
Visit the website of the Treasury Branch of the Financial Services and Treasury Bureau for details of government tenders for goods and services. It also provides a guide to government procurement in Hong Kong.
Department for International Trade (DIT) has identified 7 High Value Opportunities (HVOs) for British business in Hong Kong with opportunities worth well over £5billion a year.
5.1 Hong Kong Airport
Hong Kong’s Chek Lap Kok international airport was opened in 1998. However, it’s nearly operating at capacity as the region becomes an ever busier global hub for business, trade and tourism.
A third runway expansion project is now underway at a cost of over £11 billion to provide essential capacity beyond 2023 when it’s expected to be completed. Construction of the third runway on reclaimed land and the redevelopment of Terminal 2 are expected to commence in 2016.
Project requirements include:
- reclamation of 650 hectares of land
- construction of the third runway, major concourse building and related taxi systems
- redevelopment and extension of Terminal 2
- enhanced and extended baggage handling systems
- extension of the automated people mover system and new interchange
- new airport security and air traffic control facilities and systems
Contact the Department for International Trade (DIT) Hong Kong at firstname.lastname@example.org for more information on opportunities at Hong Kong’s international airport.
Hong Kong’s government is currently developing a strategy to tackle environmental issues. This is through the development of schemes for:
- landfill expansion
- Organic Waste Treatment Facilities (OWTF)
- integrated waste management facilities
- electric vehicles and their associated support infrastructure
- green buildings
Contact the Department for International Trade (DIT) Hong Kong at email@example.com for more information on environmental opportunities.
Hong Kong has a rapidly aging population. It’s interested in increasing cooperation on healthcare offering strong commercial opportunities for UK companies.
Increased dialogue and research collaboration between the UK, Hong Kong and Mainland China can also lead to longer term opportunities.
Opportunities to develop partnerships include:
- hospital building and redevelopment projects worth £4.9 billion (from now to 2022)
- promotion of UK expertise present in Hong Kong to win business in PRD region of Mainland China
Contact the Department for International Trade (DIT) Hong Kong at firstname.lastname@example.org for more information on healthcare opportunities.
5.4 Kai Tak Development (KTD)
KTD is a huge and highly complex urban regeneration development project. The area’s being transformed into a green and quality environment with major sporting, leisure and tourism facilities. It spans 320 hectares covering the:
- former Hong Kong airport site
- adjoining hinterland districts of Kowloon City, Wong Tai Sin and Kwun Tong
Major projects include:
- multi-sports stadium complex
- ‘hotel belt’ with 6 potential sites for high end hotels adjacent to the cruise terminal
- elevated mono-rail system
- landscaped open spaces
Contact the Department for International Trade (DIT) Hong Kong at email@example.com for more information on opportunities at KTD.
5.5 West Kowloon Cultural District (WKCD)
WKCD is one of the world’s largest cultural projects covering 40 hectares. It will comprise 17 venues under the management of the West Kowloon Cultural District Authority including:
- a new museum of visual culture
- numerous theatres
- concert halls
- other performance venues
- large green space
UK companies are directly involved across the supply chain for this project.
Opportunities for UK companies include:
- design and installation of entertainment attractions
- audio visual technologies
- digital media content, audience engagement and development
- interpretation and exhibition design
- artistic and cultural content
- management and operation of world class multi-use stadia and venues
Contact the Department for International Trade (DIT) Hong Kong at firstname.lastname@example.org for more information on opportunities at WKCD.
5.6 Hong Kong-Zhuhai-Macau bridge
The 30 kilometre (km) long Hong Kong-Zhuhai-Macau bridge will be the longest sea bridge in the world when it’s completed. It’s a highly technical project which includes a 6.7km underwater tunnel section.
The new link will be a 6 lane expressway with boundary crossing facilities built on artificial islands at each end. The bridge will:
- bring closer economic ties with the Pearl River Delta (PRD) region
- allow 24/7 border crossings
Contact the Department for International Trade (DIT) team in Hong Kong at email@example.com for more information on remaining opportunities relating to the Hong Kong-Zhuhai-Macau bridge.
The Shatin to Central link is a major railway network extension project consisting of 2 sections and the construction of 10 new stations. The East-West line will run for 11 km between Tai Wan and Hung Hom. The North-South line will run 6 km between Hung Hom and Hong Kong Island.
Hong Kong has a 15 year railway development programme. Future plans include a:
- Northern Link
- South Island Line (West)
- North Island Link
- West Express Line linking Hong Kong International Airport with Shenzhen Airport
UK companies that get involved in these projects at an early stage can expect numerous follow-on opportunities.
Hong Kong’s 2 large bus companies operate an extensive network of routes as well as several ferry and helicopter operators.
Contact the Department for International Trade (DIT) team in Hong Kong at firstname.lastname@example.org for more information on rail and other opportunities in Hong Kong.
6. Start-up considerations
Hong Kong is a highly competitive and mature market.
A local presence is needed such as an agent or distributor to successfully develop your business in this market. You will need to visit the market to establish a personal relationship with a business partner and underpin a long-term relationship.
Licensing or franchising may also be viable options for some products and services.
Contact the Department for International Trade (DIT) team in Hong Kong to help find tax and legal advisers before entering into agreements.
7. Legal considerations
The legal framework in Hong Kong is very similar to that of the UK. Many of the lawyers operating in Hong Kong have been trained in the UK and almost all are fluent in English.
You can find a full list of lawyers operating in Hong Kong and the areas they cover on the Law Society of Hong Kong website.
7.1 Standards and technical regulations
The Customs and Excise Department is responsible for consumer protection for consumer goods, toys and children’s products.
The Centre for Food Safety provides information on regulations relating to food and drugs labelling.
Pre-packaged foods must be labelled with mandatory nutritional information. Any nutritional claims about the contents must comply with the regulations. Food and formula consumed by children under the age of 36 months and food for special dietary uses are exempt.
7.2 Intellectual property
The importance and need for protection of intellectual property (IP) has long been recognised in Hong Kong, and has been crucial in its development as an international trading centre.
The Intellectual Property Department (IPD) has responsibility for registrations and has an electronic filing system.
8. Tax and customs considerations
Hong Kong has one of the lowest tax rates and simplest tax structures in the world.
There are only 3 direct taxes which are on:
None exceed 17% and there are multiple deductions. There is no sales tax.
The Inland Revenue Department gives clear instructions on payment and procedures relating to tax.
The Customs and Excise Department has responsibility for customs procedures and revenue collection in Hong Kong.
Hong Kong is a free port so goods are not subject to import duty with the exception of:
- liquors (30% and above alcohol by volume)
- hydrocarbon oil
- methyl alcohol
If you are importing these items you will need to obtain an import and export licence from the Customs and Excise Department, and you will also need a removal permit should you wish to re-export them.
There are a number of goods which cannot be imported without a licence, but are not subject to duty. These include pharmaceutical products and certain foodstuffs. You can find a full list of these items on the Customs and Excise Department website.
Visit the Customs and Excise Department website for details of the trade related documents needed to get your goods into Hong Kong.
Some businesses require a license or registration to operate. You can get a complete list of the licenses required from the Business License Information Service of the Hong Kong Trade and Industry Department.
9. Business behaviour
Business culture in Hong Kong is quite similar to western culture.
The official languages of Hong Kong are Chinese (Cantonese dialect) and English. English is widely spoken in the business world and in urban areas of Hong Kong.
Sales and marketing material in English is generally sufficient, but in some cases, they may be advantages in having material prepared in Chinese.
The traditional form of written Chinese is used in Hong Kong. A simplified form is used on the Mainland. Any Chinese language materials you prepare for the Hong Kong market should use traditional Chinese. This means any material prepared for the Mainland China market will not be suitable, and vice-versa.
10. Entry requirements
UK passport holders do not require a visa to enter Hong Kong. As a visitor you can normally be allowed to stay for up to 90 days.
You should get a visa or entry permit to work in Hong Kong via the Hong Kong Immigration Service.
10.1 Travel advice
If you’re travelling to Hong Kong for business, check the Foreign & Commonwealth (FCO) travel advice beforehand.
Contact the Department for International Trade (DIT) team in Hong Kong for more information and advice on opportunities for doing business in Hong Kong.