'Japanese companies are closing down office operations in Hong Kong because of the recession at home, according to a survey conducted by the Census and Statistics department. The study found 471 Japanese companies had regional offices in the SAR on June 1, down from 533 at the same time last year. However Mike Rowse, director-general of investment promotion at Invest Hong Kong, remains optimistic about the future. 'Hong Kong's tax rate will continue to make it an attractive business centre,' he said. 'The tax-rate gap between Hong Kong and Singapore is still good enough to hold foreign companies in the SAR. Even if the profit tax rises a bit, investors will still be able to swallow it.' The number of foreign companies with regional headquarters in Hong Kong remained stable, but the number of 'less-autonomous' regional offices fell by 5.32 per cent. Despite the year-on-year fall, Japanese firms still had the most regional offices in Hong Kong. The number of regional headquarters in the SAR increased slightly in the year to June 1, to 948 from 944. The survey found the number of local offices had increased 42.11 per cent in the year to June 1 to 1,748 from 1,230. A local office is defined as an office that solely takes charge of business in Hong Kong on behalf of its overseas-based parent. The census department's senior statistician Gregory Chiu Fook-ching attributed the rise in the number of these offices to a better statistics framework. 'Some of them might have set up their local offices a long time ago,' he said. Mr Rowse said he did not know how many local offices had been operating for more than a year.