Hong Kong is the world’s eighth largest trading economy and an international financial centre for channeling goods and capital in and out of China.
If you’re looking at trading in the Far East, Hong Kong is the perfect place to start – here’s everything you need to know about exporting to Hong Kong…
What are the pros and cons of exporting to Hong Kong?
There are about 120 UK companies that have regional headquarters in Hong Kong, with a further 200 having regional offices.
The benefits of exporting to Hong Kong include:
- open, transparent and competitive market
- largely English speaking
- strong intellectual property rights protection
- well established and familiar rule of law
- proximity to Pearl River Delta (PRD), an important Chinese region
The strengths of the Hong Kong market include:
- popular base for hosting regional headquarters or representative offices
- leading telecommunications hub for Asia Pacific region
- premier offshore centre for trading in the Renminbi (RMB) Chinese currency
- world’s busiest airport for international cargo
- one of the world’s busiest container ports
- the second largest private equity centre in Asia
- the third largest stock market in Asia and the seventh largest in the world
Hong Kong is a growing market, averaging 4.5% growth over the last decade, and the four main economic sectors in Hong Kong include financial services, trade and logistics, tourism, and professional services.
And, being such a free economy, it presents few challenges to UK businesses.
What are the main UK exports to Hong Kong?
After mainland China, Hong Kong is the UK’s second largest market for goods in the Asia Pacific region – and the 11th largest worldwide – and goods exports from the UK are worth around £6.3 billion a year.
The top ten UK exports to Hong Kong are:
- miscellaneous manufactured articles
- power generating machinery and equipment
- telecommunications and sound recording and reproducing equipment
- non-ferrous metals
- electrical machinery and appliances
- professional, scientific and controlling instruments and appliances
- beverages, spirits and vinegar
- plastics and plastic products
- clocks and watches
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How does tax work in Hong Kong?
The good news for anyone looking to work or do business in Hong Kong is that its tax rates are among the lowest in the world, and it tax structure among the simplest. In short, one there are only 3 direct taxes which are on:
The highest tax rate is 17%, and there are numberous deductions. Arguably the best news is that there is no sales tax.
Check out the website of the Inland Revenue Department for clear instructions on payment and procedures relating to tax.
How will I be affected by customs in Hong Kong?
Hong Kong is a free port, which means no goods are hit with import duty. There are exceptions though, including:
- liquors (30% and above alcohol by volume)
- hydrocarbon oil
- methyl alcohol
You’ll need an import and export licence to bring in any of these items, and you can get one from the Customs and Excise Department. If you then want to re-export these goods, you’ll also need a removal permit.
There are a certain goods that aren’t subject to duty, but still can’t be imported without a licence, including:
- animals and plants
- pharmaceutical products
- certain foodstuffs
- motor vehicles
For a full list of items, check out the Customs and Excise Department website.