Foreign, mainland Chinese firms in Hong Kong hit record high, says InvestHK
7,250 foreign, mainland businesses set up shop in city, but economic turbulence may affect them
The number of foreign and mainland companies that have set up offices in Hong Kong has hit an all-time high of 7,250, but global economic uncertainties may have a short term negative impact on the multinationals' overseas expansion, says InvestHK.
As of June, the number of overseas firms in the city had risen 4.3 per cent from a year ago, according to an annual survey jointly announced by InvestHK and the Census and Statistics Department.
Simon Galpin, director-general of InvestHK, the government department in charge of foreign direct investment, said the number of people employed by these firms had also edged up 5.7 per cent to 388,000, an increase of about 20,000 compared with a year ago.
"We have to recognise a difficult global economy and the slowdown in the mainland economy may have a negative impact on the number of foreign companies setting up in Hong Kong in the short term," he said. "We are confident, though, that in the long run, Hong Kong will continue to attract investors who plan to start or strengthen their operations in the region."
Galpin also expressed confidence that InvestHK would reach this year's target of attracting 310 foreign firms to set up operations in the city.
It would take about three or four years of discussion before these firms finalised their decisions, he said. If the global economic outlook turned sour, their overseas expansion plan might be deferred by a year or so.
Galpin noted that Hong Kong's enduring advantages such as its low and simple tax regime, free market principles and strong rule of law should continue to attract overseas and mainland investors.
Of the 7,250 companies that have set up offices here, 1,367 operated as regional headquarters, up two per cent from 1,340 a year ago, according to the survey.
US companies topped the list with 1,388 firms in Hong Kong, followed by 1,218 from Japan and 853 from the mainland.
In the survey, almost 40 per cent of respondents indicated the availability and cost of residential and business accommodation as an unfavourable factor for setting up office in Hong Kong.
Meanwhile, a survey conducted by the Grant Thornton International Business Report indicated that 60 per cent of Hong Kong businesses had at least a quarter of its workforce under the age of 30, up from 52 per cent just six months ago.