Hong Kong Foreign Direct Investment Issue 1 ... - Invest Hong Kong

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market focus australia/new zealand 6 Mining and resources are big money businesses, so while Hong Kong was famously described by the British as a “barren rock” in the 1840s, it is far from lacking in financial commodities. In the past two years alone, the number of mining, energy, resources and infrastructure companies opening offices, raising capital and consolidating Asian operations in the city has surged. Finance, Legal and Professional Services To support resource-related companies, in 2010 Hong Kong’s stock exchange updated its listing and capital-raising rules. Today, more than 150 such companies are listed on the exchange, with a combined market cap close to US$380 billion. Mainland Chinese resource companies, ranging from the giants of the industry to the smaller players, have converged on Hong Kong over the past 10 years to raise a massive US$177.6 billion in initial public offerings. These include CNOOC, PetroChina, China Petroleum, China Coal, Jiangxi Cooper, Chalco and Zijin Mining. Foreign companies soon followed suit, including major resource groups from Russia, Canada, Mongolia and Brazil. Consolidating Asia-wide Business Functions Opportunities in Hong Kong are not limited to finance. Companies are also using the city’s legal, engineering, HR, insurance and procurement services. Many of the mineral companies have projects in multiple locations across Asia and Hong Kong allows them to consolidate business functions in one city. Major firms minimise risk by structuring contracts in Hong Kong and their CFOs and stakeholders rarely overlook the appeal of the city’s famously low corporate tax. Similarly, mining related professional services companies including Australia’s Runge and Mining Associates are increasingly using Hong Resource and Engineering Firms Find a Home in Hong Kong InvestHK is reaching out to engineering and resource fi rms in Perth, the capital of Western Australia and of Australia’s booming mining industry, to update them on opportunities in Asia Kong as a base to provide technical support across the region. Another aspect that shouldn’t be underestimated is the lifestyle that Hong Kong offers. Given the typically remote locations of most mining and resource projects, senior executives would rather locate their families in the city, while they manage projects around the region. With regular flights to a wide range of locations, Hong Kong does make running a regional business and having family time a viable option. Proximity to Your Customers Another major business driver is proximity to potential customers. Mainland China is currently the world’s largest consumer of coal and iron ore and companies with operations across the region are well-positioned to finance and organise trade deals with the Mainland from the commercial security of a Hong Kong-based company. This rings true for Aramco Overseas Company (AOC), which describes its Hong Kong office as its “intelligence hub in Asia”. AOC manages joint ventures in Korea and Japan from its Hong Kong office and also supports its China-based subsidiary (SASC) with financial, legal and administrative functions. Rusal, the world’s largest producer of aluminium, and the first Russian firm to list in Hong Kong, also chose to open its Hong Kong office based on growth prospects for the region. Majority owner, Oleg Deripaska, told shareholders ahead of its IPO that, “Hong Kong is the gateway to Asia,” adding simply that, “I focus more and more on Asia because I believe we can do better business here than in struggling economies.” Hong Kong: Where Global and China Advantages Converge 9 February, Perth, WA InvestHK is hosting an afternoon seminar in Perth to update companies on business opportunities in Hong Kong. There will be a strong focus on the city’s role in raising finance and investor relations for resource and engineering companies. The event will be followed by a networking Chinese New Year reception. For more information, contact Yin Robards: yin_robards@hketosydney.gov.hk
Familiar Market – with an Added Advantage for Singaporean and Malay Firms Singaporean companies have been quick off the mark to appreciate what Hong Kong has to offer and Malay fi rms now increasingly have their sights set on regional opportunities in Asia’s business capital As major East Asian economies with strong expatriate business communities, Hong Kong, Singapore and Malaysia enjoy many cultural and economic similarities. All three, for example, are considered easy places for international companies to set up. Singapore and Hong Kong hold the top two spots in The World Bank’s Ease of Doing Business annual survey, while Malaysia’s ranking has improved rapidly in the past 12 months moving up five places to 18th. On a community level, all three share a cross-cultural appreciation for Asian and western influences, as well as a strong and internationally-focused work ethic. Spectacular Growth Between 2006 and 2010, a period marked by economic uncertainty in Europe and North America, the average annual growth rate in bilateral trade between Hong Kong and Singapore and Hong Kong and Malaysia both rose by eight percent. InvestHK has expert teams in both Singapore and Kuala Lumpur to encourage and support companies from their markets to expand into Hong Kong. Hong Kong offers a familiar business environment, with its affluent local consumers and serviceoriented businesses which allows for an easy transition for Malaysian and Singaporean companies. “But Hong Kong offers a lot more than its domestic market,” Olivia Quah, InvestHK’s Kuala Lumpur Consultant, commented. “Hong Kong also plays a valuable role in allowing Malaysian companies to introduce their products to millions of Mainland Chinese visitors who come to Hong Kong every year.” In 2011, for example, more than 28 million visitors came from Mainland China to Hong Kong. Savvy business people from Singapore and Malaysia also understand the role Hong Kong plays in developing a business strategy for key cities in Mainland China. “Mainland China can be a large and complex market for newcomers, so building contacts in Hong Kong can be a good way to start,” Quah explained. Several hundred Singaporean companies have already moved into Hong Kong, including BreadTalk, Hour Glass, Helutrans, EMC Corporation, Frasers Hospitality and Imaginasia Group. “Hong Kong is the gateway to the Mainland and there’s an increasing economic force that is benefiting the Hong Kong market,” Dick Chia, GroupCEO of art storage and logistics company Helutrans Group, said. “We have expanded into Hong Kong to capitalise on the market vibrancy as well as to pave our way into the Mainland,” he added. According to a 2011 annual survey of overseas companies, the trend market focus singapore/malaysia towards Hong Kong looks strong. The number of Singaporean companies setting up in the city, for example, has risen by over 90 percent since 2001 to over 330. “We’ve been delighted to be able to support some of these companies as they go through the process of setting up in Hong Kong,” Willie Tan, InvestHK’s Manager in Singapore, said. Hong Kong plays a valuable role in allowing Malaysian companies to introduce their products to millions of Mainland Chinese visitors Olivia Quah, InvestHK’s Kuala Lumpur Consultant 7
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Hong Kong Foreign Direct Investment Issue 1 ... - Invest Hong Kong

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