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 (). The services sector now accounts for 93% of Hong Kong’s. 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
The Hong Kong economy has been transformed over the past 2 decades. Much of its manufacturing has moved to the neighbouring region of southern China.
Gateway to Asia
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 recipient in Asia, after mainland China. It has held this position for 14 consecutive years. Annual into Hong Kong amounted to USD 77 billion in 2013.
Under the principle of ‘One Country, Two Systems’, Hong Kong’s legal framework is based on common law and the independence of the judiciary. The Hong Kong’s constitutional document, the Basic Law, ensures that the city retains its previous capitalist system and way of life for 50 years. The rights and freedoms of people in Hong Kong are based on the impartial rule of law and an independent judiciary.
The Basic Law provides the constitutional framework for the legal system in Hong Kong.
Learn more about Hong Kong’s legal system here.
Learn more about Hong Kong as a dispute resolution centre here.
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.
Tax and customs
Hong Kong is one of the most tax-friendly economies in the world according to the 2014 Paying Taxes study commissioned by the World Bank and the International Financial Corporation which compared the tax rates of 189 economies.
- Hong Kong’s corporate profit tax is capped at 16.5%
- Salaries tax is a maximum of 15%
- Property tax is 15%
- More information on Hong Kong’s tax system
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.