22/03/2018

1

Thessaloniki, March 20, 2018

Paula Kant

Head, Investment Promotion

YOUR!

Hong Kong: Your ideal

Regional Asia hub!Setting up your company in HK: Why & How?

Services of HKTDC and InvestHK

Creating opportunities for

international trade.

Assist companies with potential to

contribute to HK’s economy to set

up a company and expand in HK.

Hong Kong Trade Development Council.

Invest Hong Kong

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The four topics of today

1. Hong Kong: still relevant?

2. Latest developments and focus sectors

3. HK as a key piece of your Asia Mkt & Sales strategy

4. Setting up in HK and How InvestHK can help

Even though HK’s position in Greater China has changed,.........

1980: HK represented 50% of China’s GDP

2016: HK represented 2.85% of China’s GDP

Hong Kong plays a key role in 2 major Chinese policy initiatives:

1) “One Belt, One Road” Inititative

2) Greater Bay Area or GBA

Is Hong Kong still relevant?

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One Belt One Road Initiative

Greater Bay Area (GBA) initiative

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Development of the Greater Bay Area

• Concept dates back to 2011 in a study on coordinated development of the city

cluster in the Pearl River Delta

• The Greater Bay Area was first brought up in the 13th FYP (2016-2020)

• Announced as national policy in Premier Li Keqiang’s report to the NPC

meeting in March 2017 on the work of the government

• Aim to promote deeper integration between the two SARs and the mainland

cities to form a global city cluster and facilitate China’s economic integration with

the world

Key Areas of collaboration in the GBA MoU

• Promote infrastructure connectivity

• Enhance market integration

• Build a global Technology and Innovation hub

• Create a system of modern industries through synergistic development

• Build a quality living circle ideal for living, working and travelling

• Foster international cooperation

• Support the establishment of major collaboration platforms

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Hong Kong,……means Business…

in line with CE’s 2017 Policy Address!

Priority Areas 2018 covered by NINE SECTOR TEAMS

Nine Sector Teams Priority Sub-sectors 2018Four Traditional Pillar

Industries

Business & Professional Services (BPS)

• Education •Professional services

Creative Industries (CI) • Design

Consumer Products (CP) • E-retail •Trading & logistics

(trading)

Financial Services (FS) • Aircraft Leasing •Financial services

Financial Technology (FinTech)

Innovation & Technology (I&T) • Biomedicine

Information & Communications Technology (ICT)

• Big Data / AI

Transport & Industrial (T&I) • Maritime•Trading & logistics

(logistics)

Tourism & Hospitality (T&H) • Food trading (Green, Sustainable) •Tourism

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1) Creative Industries

The value added of Cultural and Creative Industries (CCI) was $108.9 billion

and the contribution to GDP of Hong Kong was 4.7% in 2015, with 213,880

employment, which was 5.6% contribution to the total employment of Hong

Kong in 2015. (Source: Hong Kong Monthly Digest of Statistics in June 2017)

Policy Address 2017:

Creative Industries are recognised as

‘a powerhouse that will drive the economy,

add value and make Hong Kong a more

attractive international city.’

It is among the most dynamic economic

sectors in Hong Kong, contributing to both

economic growth and job creation.

Priority Sector: Design

Why Hong Kong?

Quotes from our design clients:

“Hong Kong’s low tax rates, reliable legal system and

proximity to other Asian hubs are attractive, the

presence of a select group of premium global clients in

Hong Kong is key to our business success.”

Experience the Pulse

(Immersive experience design/creative studio)

“The easy recruitment of highly skilled, well educated

local talents and the proximity to strategic markets such

as Mainland China, Japan and the ASEAN countries

have been key factors in the choice of Hong Kong as our

regional head office.”

Gruppo Pozzi (Interior, retail design)

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Key Areas of Design

Branding and Communications:

Analog Folks, R-CO Brand, Agence 1969, RFI Daylight, Jump Willy

Multimedia/Interactive Design:

The Pulse, Spinifex, GoAnimate, Indestry, Shadow Factory

Architecture:

Jet Architecture, CallisonRTKL, Buro Ole Scheeren, K plus K, Zaha Hadid Architects

Interior/Spatial:

Gruppo Pozzi, Studio X, Alt254

Product:

Studio Dott, Mabu Design, Do It- Ideas into things

Lead 8SpinifexMichael Young StudioStartJG

2) Innovation & R&D

• Develop propositions with

stakeholders

• University research funding -

$10 billion

• “Technology Talent Scheme” -

$500 million

• Innovation and Technology

Venture Fund Scheme -

$2 billion

• Smart City development -

$700 million

AI

RoboticsFinTech

Smart City

Healthy Aging

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Hong Kong-Shenzhen I&T Co-operation Zone

Shenzhen I&T Zone 167 hectares

Adjoining Areas 182 hectares

Lok Ma Chau Loop 87 hectares Ready by 2021

Shenzhen

Hong Kong

Economic and Technical Targets

• Land area: 87 hectare

• Total floor area: 1,200,000 sq meter

• Land use: Research,Education (basic and translational

research), Culture and Creative Industries (digital media)

• Working population: around 50,000

• Development works: 2018 Q2

• First Batch completion: 2022 Q2

Hong Kong-Shenzhen I&T Co-operation Zone

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3) Fintech Ecosystem in Hong Kong

Major Focus:

• AI

• InsurTech

• Blockchain

• Cyber Security

• RegTech

• WealthTech

Upcoming HK FinTech Week

31 Oct to 2 Nov 2018

5) a. Food & Beverage Trading

Photo Credit: The Dawn, Mr WONG CHI KEUNG

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Key Sector / Region Trends -

Natural Ingredients

Key Sector / Region Trends -

Health Consciousness

0

20

40

60

80

100

120

0 20 40 60 100 120

Age

Units Turmeric

Probiotics

More

HEALTHconscious!!

Tend to eat more

green and sustainable

protein

Chia Seeds

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5) b. Restaurant / Bar / Retail

Photo Credit: Discover Hong Kong

MEALS CONSUMED

OUTSIDE HOMEWEEKLY

Breakfast

Source: School of Hotel & Tourism ManagementThe Hong Kong Polytechnic University

3.04

Dinner

LunchTimes

4.7 Times

2.8 Times

TOTAL: 10.5 Times!

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RESTAURANT, BAR AND RETAIL –LOCAL TRENDS

1 CHOPSTICK FOOD

14%

30%

Newly Opened Restaurants

Chinese

Japanese

KoreanSoutheast

AsianLocal

American

Western

Others

22%

18%

7%

5%

2%

2%

in 2017 in core

areas by cuisine

Source: CBRE

66%

CHOPSTICK FOOD

Source: CBRE Research

RESTAURANT, BAR AND RETAIL –LOCAL TRENDS

1000

1200

1400

1600

1800

2000

2200

2400

2600

2800

3000

2013 2014 2015 2016 2017* 2021*

(1000+ partners)

(1000+ partners)

(2000+ partners)

2 FOOD DELIVERY

Source: Euromonitor, CBRE Research

*forecasted

PER CAPITA ANNUALLY

HKD$

on ONLINE FOODSERVICE

100% HOME DELIVERY/ TAKEAWAY

813

%

%

in SALES VALUE

in SALES VOLUME

Online Consumer Foodservice Value

850590 $(2021)(2016)

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RESTAURANT, BAR AND RETAIL –More small takeaway shops

Central Kitchen

Craft BeerSpecial Tea

3 Takeaway Shops Fruit Tea

6) Specific Opportunities

• CTC - Corporate Treasury Centre

• Aircraft leasing (dedicated tax regime)

• Maritime

• Dispute resolution; arbitration, etc.

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Services of HKTDC and InvestHK

Creating opportunities for

international trade.

Assist companies with potential to

contribute to HK’s economy to set

up a company and expand in HK.

Hong Kong Trade Development Council.

Invest Hong Kong

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Hong Kong Trade Development Council

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HKTDC

A Hong Kong statutory body established in 1966

Helps international businesses explore opportunities in and through Hong Kong

Promotes Hong Kong as Asia’s business platform and services hub

More than 40 offices globally, including 13 on the Chinese mainland

Assists international companies and investors to explore and enter new markets on the Chinese mainland and throughout Asia

Facilitates Chinese outbound investment in both mature and emerging markets

Connects businesses worldwide with Hong Kong partners, including product suppliers and services providers

Provides market intelligenceTel: (852) 1830 668

Email: hktdc@hktdc.org

www.hktdc.com

https://www.linkedin.com/company/hong-kong-trade-development-council

@hktdc

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HKTDC: Business Matching

Matching business partners

A customised service tailored to your business needs

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HKTDC: Global Network

46 offices worldwide

Beijing

Hong Kong

TokyoNew York

Bangkok

Dubai

London

Frankfurt

Sydney

L.A.

Chicago

Kuala Lumpur

Jakarta

Singapore

Ho Chi Minh City

28 along the Belt and Road, including13 on Chinese mainland, 5 in ASEAN

Seoul

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World-class

Trade Fairs

Product Magazines covering various Industries

Trusted

Online Marketplacewww.hktdc.com

Mobile ApplicationsAnytime, Anywhere

The HKTDC Integrated Marketing Solution

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HKTDC: Marketing & Sourcing Trade Fairs

30+ world-class trade fairs

Around 37,000 exhibitors, over 760,000 buyers a year

Forming 11 largest marketplaces in Asia

Gifts & Premium

Electronics (Autumn) + electronicAsia

Houseware

Fashion Fall/Winter

Electronics (Spring)

FILMARTLicensing

Watch & Clock

Toys & Games

Jewellery +Diamond,Gem & Pearl

Lighting (Autumn)+Outdoor Lighting

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HKTDC: hktdc.com Online Marketplace

1.7M+ registered buyers

130,000+ quality suppliers

5M monthly user sessions

24M+ business connections generated annually

New language options

Deutsch

Español

Français

Italiano

Português

Русский

Latest awards:

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HKTDC Marketplace App

Latest awards:

The HKTDC 4-in-1 Marketplace in one app

• HKTDC trade fairs

• Product Magazines

• hktdc.com Online Marketplace

• hktdc.com Small Orders

Hong Kong’s role in your Marketing & Sales strategy

1) Selling in the Hong Kong market

- 7.5 million inhabitants

- 57 million visitors per yr; of which 75% from mainland China

2) Hong Kong as a Gateway to China,..........

- using HK to showcase your products & services

- taking time & hiring staff for China market entry

3) Hong Kong as a Regional Marketing & Sales hub

4) Hong Kong as a location for your sourcing office

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BUSINESS-TO-

CONSUMER

5.1Min Asia Pacific

142,000 HNWIs in HK,

up 281% (2009-2015)

42.8Mfrom Mainland China

56.6 million visitors

in 2016

84%of the world’s

leading luxury and

fashion retailers

are in HK

US$63bnsales

600people

One restaurant every

ONE COUNTRY TWO SYSTEMS

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LOW & SIMPLE TAX SYSTEM

• VAT/GST/Sales tax

• Capital Gains Tax

• Withholding tax on

investments

• Estate duty

• Global taxation

• Wine duty

HONG KONG

SINGAPORE

SHANGHAI*

Corporate Income

Personal Income

Employer Social

Security

Employee Social

Security

VAT

* There is no standard rate across the Mainland China. Shanghai is used as an example.

Hong Kong has signed

Comprehensive Double

Taxation Agreements (CDTAs)

with 38 jurisdictions.

Negotiations with

13 jurisdictions are in progress.

25%

45%

37%

11%

17%

17%

20%

16%

20%

7%

16.5%

15%

5%

5%

0% VAT

(as of Jan 2017)

HOW INVESTHK CAN HELP

Expansion

Launch

Planning

Set up

Everything you can do before actually going to HK,….get in touch

with InvestHK re. sector-specific opportunities, tax and business

regulations, relevant meetings in HK, visit programme, etc.

Facilitating the actual set up of your business in HK,…advice re.

service providers: accountants, lawyers, recruitment firms, real

estate agents, etc. Making contacts with business partners.

Helping to make your launch a success: PR events, press

releases, featuring your company in the bimonthly InvestHK

Newsletter, etc.

• Even when you are up and running, InvestHK is still there

when you need us

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San Francisco

Mexico City

Bogotá

Toronto

New York

London

Brussels

Paris

Berlin

Milan

Istanbul

Jerusalem

Dubai

Moscow

Gothenburg

Mumbai

Chengdu

Bangkok

Seoul

Wuhan

Guangzhou

Shanghai

Osaka

Tokyo

Beijing 1

Taipei2

Kuala LumpurSingapore

Rio de Janeiro

Sydney

Hong Kong

Investment Promotion Units inHong Kong Economic and Trade Offices

Consultants

Note:1 Beijing Office2 Hong Kong Economic, Trade and Cultural Office (Taiwan)

Office locations are subject to change. For the latest version, please refer to InvestHK’s website.

INVESTHK’S WORLDWIDE

NETWORK

• InvestHK Overseas: 30 country offices

• InvestHK HQ: 9 sector teams

• InvestHK’s services are free!

Priority Areas 2018 covered by NINE SECTOR TEAMS

Nine Sector Teams Priority Sub-sectors 2018Four Traditional Pillar

Industries

Business & Professional Services (BPS)

• Education •Professional services

Creative Industries (CI) • Design

Consumer Products (CP) • E-retail •Trading & logistics

(trading)

Financial Services (FS) • Aircraft Leasing •Financial services

Financial Technology (FinTech)

Innovation & Technology (I&T) • Biomedicine

Information & Communications Technology (ICT)

• Big Data / AI

Transport & Industrial (T&I) • Maritime•Trading & logistics

(logistics)

Tourism & Hospitality (T&H) • Food trading (Green, Sustainable) •Tourism

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StartmeupHK Team,....and Annual Festival

• Launched in 2013, StartmeupHK is an

initiative by InvestHK to promote the Hong

Kong startup ecosystem and connect

entrepreneurs in local and overseas startup

communities. At its core are the mission to

promote Hong Kong as a startup destination,

bring global entrepreneurs to the city, and

attract innovative, scalable and high impact

ventures to set up in Hong Kong.

• StartmeupHK Festival 2018 - 29 Jan to 2 Feb

2018@HKCEC. Key themes:

- Smart city

- Health Tech

- Internet of Things (IoT)

- Retail Tech

- Fintech

5 STEPS to set up in Hong Kong

1) Select Company Type and Company Name

2) Register and Incorporate a Company- Shareholders can be foreigners, company secretary must be HK resident

3) Opening a bank account

4) Choosing a business premises

5) Immigration and Visas

,…………………InvestHK can help every step of the way

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Success story 2018: Baunat,

diamonds, B-2-C, “Smart in every way”

• Baunat: the leading online

diamond jewellery brand,..... with 9

showrooms around the world.

• “Smart in every way”

• HK office and showroom is the

first Baunat opening in Asia.

Why HK? Cosmopolitan culture,

and Asia’s centre for diamond

and jewellery trade

• InvestHK helped with:- Company set-up

- Marketing & Sales support to Baunat

in HK; access to trade fairs,

networking events, etc.

- Support on visa application for staff

Success story 2018: LaLiga

• Spanish football league LaLiga is the

world’s leading football league

• LaLiga has set up a company, and

currently has a small team in HK to

identify new opportunities

• Why set up in HK? LaLiga believes

HK is a territory of great

opportunities and a key city for the

league’s development, since

football is fast becoming one of

HK’s - and Asia’s - favourite sports

• InvestHK helped with:- Company set up

- Work visa for Spanish staff

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Actual “live” projects

1) Company A:

* Country of origin: Spain

* Established in 2013

* Type of company: Startup, SME

* Sector: Fintech (video technology for identification of persons,)

This company has contracts with a range of European banks

* Why set up in Hong Kong? Find clients amongst HK banks,

use HK office to service other customers in APAC region

2) Company B:* Country of origin: Luxembourg

* Type of company: Data Centre company

* Sector: ICT

* Why set up in Hong Kong? Regional Asia Marketing & Sales office,

Provide sales & service support to clients in various Asian countries. In future,

data centre in Hong Kong.

GET IN TOUCH

Tel: (32) 473 97 81 96

www.investhk.gov.hk

Email: paula_kant@hongkong-eu.org

Hong Kong Economic & Trade Office

Brussels

Rue d'Arlon 118

B-1040 Brussels

BELGIUM

www.flickr.com/photos/investhk

www.linkedin.com/company/invest-hong-kong

#InvestHK

www.youtube.com/user/investhk

https://be.linkedin.com/in/paulakant

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THANK YOU!

• Convergence of information and healthcare /

Digitalization of Healthcare

– Preventive care and Health Informatics

• Health Data

• Preventive care (vaccines, nutrition)

• Smart well-being / medical device

• Advanced therapies (gene editing, stem cell therapy)

• OMICs Diagnostics (genomics, behaviors)

4) I&T Priority Sector: Biomedicine

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Tele-health (Heartisans, Rehab Robotics)

Smart Pill / Personalised Drug

(Given Imaging, Roche)

Genetic Test / DNA screening

(Xcelom, Angsana,

Sanomics, BGI)

Advanced Medical Equipment, like 3D Holographic Diagnosis

Tissue Engineering(living Tissue, Novoheart)

Biomedicine

R&D in HK: Government support 2018-19

$500MMTechnology Talent Scheme

R&DGDP

Double spending on R&D

as percentage of GDP in

WITHIN 5 YEARS

Including the set-up of a

Postdoctoral Hub, to fund

enterprises to recruit

postdoctoral talent for R&D

$1.5 BillionInnovation and Technology Fund

Offered through 10+ funding schemes. HK$13 Billion funding approved since launch

300%for first $2m

Additional tax deduction for R&D expenses by firms

200%for remainder

$2 BillionInnovation & Technology Venture Fund

Co-invest in start-ups with selected VC partners, targeted matching ratio of 1:2 (Government/VC)

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2) Aircraft leasing,.....special tax break

1) First: the tax rate.

Profit tax rate cut by half, meaning from 16.5% to

8.25%

2) Second: the taxable amount.

Only 20% of qualifying aircraft leasing activities

will be chargeable to profits tax after deducting

allowable expenses

Effective tax rate for aircraft leasing activities in

Hong Kong will be down to 3.37%

© Copyright Invest Hong Kong, HKSAR

Dedicated Tax Regime for Aircraft Leasing

Key Features Aircraft Lessor Aircraft Leasing Manager

Profits tax rate 50% of corporate tax rate, i.e. 8.25% 50% of corporate tax rate, i.e.

8.25%

Aircraft

depreciation

Nil Not applicable

Tax base

concession

Tax base = 20% x (gross rentals –

deductible expenses)

No such concession

Qualifying entity Special Purpose Vehicle engaging in

qualifying aircraft leasing activities only

Standalone corporation engaging

in qualifying aircraft leasing

management activities, with safe

harbours

Qualifying

activities

• Leasing to aircraft operators

• Tax ownership incl. funding lease,

hire-purchase, and conditional sale

Management activities carried our

for qualifyling aircraft lessors (providing finance, procuring aircraft,

marketing leases, managing leases, etc.)

Other

requirements

* Central management and control exercised in HK (CMC requirement)

* Profit generating activities carried out in HK (Substantial activity

requirement)

Source: Inland Revenue Department, HK

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Dedicated Tax regime for Aircraft Leasing:

A calculation example

Source: PwC