The communist regime decided to open up to foreign investment in 1978, today China is the second largest economy by GDP, and the largest by way of purchasing power. With a population of over 1.3 billion, China plays an influential role in shaping the changing global economy. Over last three decades China has transitioned from a centrally planned to a market based economy. Multiple on-going economic reforms have enabled the Chinese economy to grow and continues to do so. Though it houses the second largest number of poor in the world after India; the year on year 10 percent GDP growth has lifted over 500 million Chinese above poverty and continues to transition more and more people from poverty to low income and low income to middle income levels.
Over the last three decades China has deployed its resources in multiple industries slowly moving from an agrarian economy to a manufacturing super power. Organizations from across the globe are setting up or moving their production units to China due to cost efficiencies. An estimate indicates that the manufactures in China can cut costs by between 30 and 80 percent depending on the labour intensity of the product. The entrepreneurial spirit of the Chinese and Chinese managers is also factor for consideration. Setting up manufacturing units in China also gives these organizations the geographical advantage of being closer to Asian and south east Asian markets and access to a much larger consumer base.
China is today not only the largest exporter of goods in the world but also the second largest importer of goods; thus becoming one of the world’s fastest growing consumer markets. It is projected that by 2015, China will become the second largest consumer market with enough purchasing power to buy 14 percent of the world’s products on a per capita income basis, China ranked 82nd by nominal GDP and 89th by GDP (PPP) in 2013; International Monetary Fund.
As more and more Chinese get educated and adapt to new technology and social norms one can witness the transformation in the spending patterns also. Today Online video, E-commerce, Social and Mobility are the fastest growing industries in China. China has nearly 1 billion mobile users and over a 100 million of these consumers use mobiles for online payments. China offers brands the largest expansion opportunities.
The Great Doors of China are open to welcome the world; It is up to the world to step in; the preferred Key to this door being Hong Kong.
In 1997, the British rule of Hong Kong was handed over to China and it became a Special Administrative Region under Chinese rule. Hong Kong is one of the leading International Financial Centre of the world and is strategically located in the heart of Asia and at the doorstep of China; its attraction can be attributed to excellent infrastructure and easy access to Asian Markets.
Known as the “Gateway to China“, Hong Kong is a highly investor friendly low-tax jurisdiction. Hong Kong still remains a very attractive jurisdiction for companies set up, since it applies territorial taxation, only income earned within Hong Kong is subject to corporate tax rate.
Hong Kong Companies are easy to form, maintain, and operate private limited companies in Hong Kong. With a host of international banks present in Hong Kong starting an account is a breeze. The banks have generally low transaction fees.
Incorporation of a Hong Kong company is the easiest way to get a low or zero-tax private limited company in a reputable jurisdiction.