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Hong Kong:
Key in your Asia sales strategy!
Paula Kant, Head of Investment Promotion
YOUR!
Wassenaar, December 13, 2017
The three topics of today
1. Hong Kong: still relevant?
2. Latest developments and focus sectors
3. HK as a key piece of your Asia Mkt & Sales strategy
Even though HK’s position in Greater China has changed,.........
1980: HK represented 50% of China’s GDP
2016: HK represented 2.85% of China’s GDP
Hong Kong plays a key role in 2 major Chinese policy initiatives:
1) “One Belt, One Road” Inititative
2) Greater Bay Area or GBA
Is Hong Kong still relevant?
Development of the Greater Bay Area
• Concept dates back to 2011 in a study on coordinated development of the city
cluster in the Pearl River Delta
• The Greater Bay Area was first brought up in the 13th FYP (2016-2020)
• Announced as national policy in Premier Li Keqiang’s report to the NPC
meeting in March 2017 on the work of the government
• Aim to promote deeper integration between the two SARs and the mainland
cities to form a global city cluster and facilitate China’s economic integration with
the world
Key Areas of collaboration in the GBA MoU
• Promote infrastructure connectivity
• Enhance market integration
• Build a global Technology and Innovation hub
• Create a system of modern industries through synergistic development
• Build a quality living circle ideal for living, working and travelling
• Foster international cooperation
• Support the establishment of major collaboration platforms
Priority Areas 2018 covered by NINE SECTOR TEAMS
Nine Sector Teams Priority Sub-sectors 2018Four Traditional Pillar
Industries
Business & Professional Services (BPS)
• Education •Professional services
Creative Industries (CI) • Design
Consumer Products (CP) • E-retail •Trading & logistics
(trading)
Financial Services (FS) • Aircraft Leasing •Financial services
Financial Technology (FinTech)
Innovation & Technology (I&T) • Biomedicine
Information & Communications Technology (ICT)
• Big Data / AI
Transport & Industrial (T&I) • Maritime•Trading & logistics
(logistics)
Tourism & Hospitality (T&H) • Food trading (Green, Sustainable) •Tourism
Creative Industries
The value added of Cultural and Creative Industries (CCI) was $108.9 billion
and the contribution to GDP of Hong Kong was 4.7% in 2015, with 213,880
employment, which was 5.6% contribution to the total employment of Hong
Kong in 2015. (Source: Hong Kong Monthly Digest of Statistics in June 2017)
Policy Address 2017:
Creative Industries are recognised as
‘a powerhouse that will drive the economy,
add value and make Hong Kong a more
attractive international city.’
It is among the most dynamic economic
sectors in Hong Kong, contributing to both
economic growth and job creation.
Priority Sector: Design
Why Hong Kong?
Quotes from our design clients:
“Hong Kong’s low tax rates, reliable legal system and
proximity to other Asian hubs are attractive, the
presence of a select group of premium global clients in
Hong Kong is key to our business success.”
Experience the Pulse
(Immersive experience design/creative studio)
“The easy recruitment of highly skilled, well educated
local talents and the proximity to strategic markets such
as Mainland China, Japan and the ASEAN countries
have been key factors in the choice of Hong Kong as our
regional head office.”
Gruppo Pozzi (Interior, retail design)
Key Areas of Design
Branding and Communications:
Analog Folks, R-CO Brand, Agence 1969, RFI Daylight, Jump Willy
Multimedia/Interactive Design:
The Pulse, Spinifex, GoAnimate, Indestry, Shadow Factory
Architecture:
Jet Architecture, CallisonRTKL, Buro Ole Scheeren, K plus K, Zaha Hadid Architects
Interior/Spatial:
Gruppo Pozzi, Studio X, Alt254
Product:
Studio Dott, Mabu Design, Do It- Ideas into things
Lead 8SpinifexMichael Young StudioStartJG
Aircraft leasing,.....special tax break
1) First: the tax rate.
Profit tax rate cut by half, meaning from 16.5% to
8.25%
2) Second: the taxable amount.
Only 20% of qualifying aircraft leasing activities
will be chargeable to profits tax after deducting
allowable expenses
Effective tax rate for aircraft leasing activities in
Hong Kong will be down to 3.37%
© Copyright Invest Hong Kong, HKSAR
Dedicated Tax Regime for Aircraft Leasing
Key Features Aircraft Lessor Aircraft Leasing Manager
Profits tax rate 50% of corporate tax rate, i.e. 8.25% 50% of corporate tax rate, i.e.
8.25%
Aircraft
depreciation
Nil Not applicable
Tax base
concession
Tax base = 20% x (gross rentals –
deductible expenses)
No such concession
Qualifying entity Special Purpose Vehicle engaging in
qualifying aircraft leasing activities only
Standalone corporation engaging
in qualifying aircraft leasing
management activities, with safe
harbours
Qualifying
activities
• Leasing to aircraft operators
• Tax ownership incl. funding lease,
hire-purchase, and conditional sale
Management activities carried our
for qualifyling aircraft lessors (providing finance, procuring aircraft,
marketing leases, managing leases, etc.)
Other
requirements
* Central management and control exercised in HK (CMC requirement)
* Profit generating activities carried out in HK (Substantial activity
requirement)Source: Inland Revenue Department, HK
• Convergence of information and healthcare /
Digitalization of Healthcare
– Preventive care and Health Informatics
• Health Data
• Preventive care (vaccines, nutrition)
• Smart well-being / medical device
• Advanced therapies (gene editing, stem cell therapy)
• OMICs Diagnostics (genomics, behaviors)
I&T Priority Sector: Biomedicine
Tele-health (Heartisans, Rehab Robotics)
Smart Pill / Personalised Drug
(Given Imaging, Roche)
Genetic Test / DNA screening
(Xcelom, Angsana,
Sanomics, BGI)
Advanced Medical Equipment, like 3D Holographic Diagnosis
Tissue Engineering(living Tissue, Novoheart)
Biomedicine
R&D in HK: Government support 2018-19
$500MMTechnology Talent
Scheme
R&DGDP
Double spending on R&D
as percentage of GDP in
WITHIN 5 YEARS
Including the set-up of a Postdoctoral Hub, to fund
enterprises to recruit postdoctoral talent for R&D
$1.5 BillionInnovation and
Technology Fund
Offered through 10+
funding schemes. HK$13
Billion funding approved
since launch
300%for first $2m
Additional tax deduction
for R&D expenses by firms
200%for remainder
$2 BillionInnovation & Technology
Venture Fund
Co-invest in start-ups with
selected VC partners,
targeted matching ratio of
1:2 (Government/VC)
GOVERNMENT SUPPORT > R&D investment
funding
Strong government funding support at different stage of product development, from direct funding to tax incentives to encouraging technology adoption
ESS – up to $10M
matching support to
private sector R&D
investment; IP rights
retained with recipient
ITSP – fund up to 50% of
project R&D
Internship – 2 sponsored
interns
R&D Cash Rebate – up
to 40% company R&D
expenditure
Hong Kong-Shenzhen I&T Co-operation Zone
Shenzhen I&T Zone 167 hectares
Adjoining Areas 182 hectares
Lok Ma Chau Loop 87 hectares Ready by 2021
Shenzhen
Hong Kong
Economic and Technical Targets
• Land area: 87 hectare
• Total floor area: 1,200,000 sq meter
• Land use: Research,Education (basic and translational
research), Culture and Creative Industries (digital media)
• Working population: around 50,000
• Development works: 2018 Q2
• First Batch completion: 2022 Q2
Hong Kong-Shenzhen I&T Co-operation Zone
Hong Kong’s role in your Marketing & Sales strategy
1) Selling in the Hong Kong market
- 7.5 million inhabitants
- 57 million visitors per year (75%) from mainland China
2) Hong Kong as a Gateway to China,..........
- using HK to showcase your products & services
- taking time & hiring staff for China market entry
3) Hong Kong as a Regional Marketing & Sales hub
Services of HKTDC and InvestHK
Creating opportunities for
international trade.
Assist companies with potential to
contribute to HK’s economy to set
up a company and expand in HK.
Hong Kong Trade Development Council.
Invest Hong Kong
HOW
WE CAN HELPNetworking events,
introduction to
service providers
Facilitation of visa
applications, schooling
PR and marketing
support for launch/
expansion
Information to aid
planning and evaluation
GET IN TOUCH
Tel: (32) 473 97 81 96
www.investhk.gov.hk
Email: paula_kant@hongkong-eu.org
Hong Kong Economic & Trade Office
Brussels
Rue d'Arlon 118
B-1040 Brussels
BELGIUM
www.flickr.com/photos/investhk
www.linkedin.com/company/invest-hong-kong
#InvestHK
www.youtube.com/user/investhk
https://be.linkedin.com/in/paulakant
San Francisco
Mexico City
Bogotá
Toronto
New York
London
Brussels
Paris
Berlin
Milan
Istanbul
Jerusalem
Dubai
Moscow
Gothenburg
Mumbai
Chengdu
Bangkok
Seoul
Wuhan
Guangzhou
Shanghai
Osaka
Tokyo
Beijing 1
Taipei2
Kuala LumpurSingapore
Rio de Janeiro
Sydney
Hong Kong
Investment Promotion Units inHong Kong Economic and Trade Offices
Consultants
Note:1 Beijing Office2 Hong Kong Economic, Trade and Cultural Office (Taiwan)
Office locations are subject to change. For the latest version, please refer to InvestHK’s website.
INVESTHK’S WORLDWIDE
NETWORK
• InvestHK Overseas: 30 country offices
• InvestHK HQ: 9 sector teams
• InvestHK’s services are free!
5 STEPS to set up in Hong Kong
1) Select Company Type and Company Name
2) Register and Incorporate a Company- Shareholders can be foreigners, company secretary must be HK resident
3) Open a bank account
4) Choose a business premises
5) Immigration and Visas
,…………………InvestHK can help every step of the way!
BUSINESS-TO-
CONSUMER
5.1Min Asia Pacific
142,000 HNWIs in HK,
up 281% (2009-2015)
42.8Mfrom Mainland
56.7 million visitors
in 2016
HK is ranked as
the 2nd most
attractive global
destination for
luxury retailer(Jones Lang LaSalle,
2016)
US$56bnTotal retail sales in value
(Census and Statistics Department, 2016)
61 Michelin-starred
restaurants in HK
(Apr 2017)
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