The strong annual growth in the total number of regional headquarters, regional offices and local offices (RRLs) in Hong Kong whose parent companies are located in other parts of the world, alongside the flourishing startup ecosystem in the special administrative region, paints a compelling picture of a city that continues to evolve and thrive despite global uncertainties.
It also reflects international businesses’ strong optimism for Hong Kong’s economic future, contrary to the negative predictions about the city peddled by some doomsayers in recent months.
According to a recently released report, about 9,960 companies were registered, as of June 3, to be operating in Hong Kong with parent companies located elsewhere; of these, 1,410 were regional headquarters, 2,410 were regional offices and 6,140 were local offices. The total number represents a 10 percent increase from last year. Meanwhile, 4,694 startups were recorded in the same period, also marking a 10 percent uptick from last year.
These figures are more than just statistics; they reflect Hong Kong’s enduring ability to adapt, innovate and maintain its pivotal role as a global business hub and international financial center. These developments affirm the city’s economic vitality and underscore its unique strengths in fostering international business and entrepreneurship, a feat that is both impressive and intriguing to the global audience.
At the core of Hong Kong’s success in attracting external businesses lies its unique role as a gateway between the Chinese mainland and global economies. Over a quarter of the firms in Hong Kong with parent companies located outside the city hail from the mainland, underscoring the city’s position as the preferred platform for mainland enterprises seeking global expansion. Hong Kong offers these companies unparalleled access to international markets, financial networks and expertise.
Conversely, for foreign enterprises, Hong Kong provides a strategic foothold for entering the vast and dynamic mainland market and profiting from its economic growth. This dual function — bridging the global and mainland economies — is a key factor that sets Hong Kong apart from other regional business hubs.
Equally impressive is the diversity of companies that have chosen Hong Kong as their operating base. While mainland firms dominate the numbers, enterprises from Japan, the United States and Europe are also well-represented. This diversity demonstrates that Hong Kong’s appeal extends beyond its immediate geographical proximity to the mainland; and that businesses worldwide value the city’s open market, efficient infrastructure, and deep integration into global trade and finance networks, as well as its unique status in China and close ties with the mainland. These figures reflect a pragmatic choice by companies seeking stability and growth opportunities in an increasingly unpredictable world.
The startup ecosystem in Hong Kong is another credible indicator of its economic dynamism. The 10 percent year-on-year increase in startups, which now total 4,694, showcases a thriving entrepreneurial environment that is both innovative and future-focused. Particularly noteworthy is the rapid growth of startups in the health technology and green technology sectors, which surged by 54 percent and 82 percent respectively. These sectors are emblematic of global priorities and trends, and Hong Kong’s ability to attract and nurture businesses in these emerging areas reflects its adaptability and foresight in aligning with international trends.
The factors driving this startup boom are apparent. Hong Kong has cultivated a supportive ecosystem that empowers entrepreneurs through funding programs, tax incentives and access to global investors. These measures have lowered barriers to entry and created a fertile environment for innovation. The city’s strategic location, robust infrastructure and diverse talent pool have further fueled this growth. Hong Kong’s startup boom is not just about numbers but also about the quality and diversity of startups flourishing in Hong Kong, contributing to its reputation as a city that embraces forward-thinking industries.
The growth in company registrations and startups is a testament to Hong Kong’s enduring relevance and strategic importance in the global economic landscape. The city’s ability to attract new investment, foster innovation, and create opportunities underscores its role as a critical driver of global and regional economic activity
Doomsayers have cited increasing integration between the Hong Kong and mainland economies, as well as global economic uncertainties and geopolitical tensions, as the reasons for their gloomy forecast for Hong Kong’s economic prospects. However, the numbers of new firms set up in the city over the past year tell a different story. The increased numbers of foreign-funded companies and startups demonstrate that global businesses continue to see Hong Kong as a reliable and advantageous operating base, which is a testament to the tangible opportunities available in the city as well as the business sector’s strong confidence in its economic future. These are not mere headline-grabbing statistics but something that has brought about real jobs, innovation and economic contributions: Nearly half a million people are now employed by overseas and mainland-funded enterprises operating in Hong Kong.
Meanwhile, Hong Kong’s diversity further strengthens its position as an economic powerhouse. Traditional industries like trade and retail continue to thrive, with 4,730 companies (RRLs) operating in these areas. At the same time, the city has seen significant growth in RRLs engaging in finance, banking and professional services, with these sectors hosting over 3,500 companies. This balance of traditional and modern industries ensures that Hong Kong remains resilient and adaptable, capable of weathering economic shifts while embracing emerging opportunities. This resilience and adaptability should reassure the audience of Hong Kong’s continued success and instill confidence in its future economic prospects.
The impressive growth in the numbers of RRLs and startups also reflects businesses’ confidence in Hong Kong’s governance and overall business environment. Businesses are not merely drawn by the city’s geographical advantages but also by its strong legal framework, transparent regulatory environment and world-class financial system. These critical factors make Hong Kong a place to do business and the best place for many enterprises to expand and innovate. For mainland companies, Hong Kong is an essential intermediary that provides access to global markets and expertise. For overseas businesses, it is the most practical base for navigating the complexities of the Asian and Chinese markets.
Commentators have often compared Hong Kong with other regional hubs, suggesting that the city faces increasing competition. However, these comparisons often failed to account for Hong Kong’s advantages due to its unique status in China. No other city offers the same level of access to both global and Chinese markets. The significant growth in RRLs in 2024 is a clear reflection of this unique position and a reminder that Hong Kong’s competitive edge remains unparalleled, which sets the city apart from its regional counterparts.
The growth in company registrations and startups is a testament to Hong Kong’s enduring relevance and strategic importance in the global economic landscape. The city’s ability to attract new investment, foster innovation, and create opportunities underscores its role as a critical driver of global and regional economic activity. These achievements are not merely about maintaining relevance in a competitive world; they signify Hong Kong’s capacity to lead, adapt, and thrive, as well as its bright economic prospects.
The author is a solicitor, a Guangdong-Hong Kong-Macao Greater Bay Area lawyer, and a China-appointed attesting officer.
The views do not necessarily reflect those of China Daily.
