2008 SCoRPP. 1

2008 Annual Survey of Companies in Hong Kong

Representing Parent Companies

Located outside Hong Kong

2008 SCoRPP. 2

(i) To enumerate number of RHQs, ROs and LOs in HK representing parent companies located outside HK

(ii) To obtain basic information of these companies

(iii) To seek their views on HK as a location for setting up RHQs/ROs and LOs

Survey Objectives

2008 SCoRPP. 3

Covers companies in HK taking charge of business/operations in HK or in the region on behalf of parent companies located outside HK

Does not cover companies in HK which are funded by investment from outside HK and manage the business in HK or in the region independently but not on behalf of investors

Survey Coverage

2008 SCoRPP. 4

Survey Coverage

• RHQs + ROs + LOs ≠

Total no. of companies in HK with investment from outside Hong Kong

2008 SCoRPP. 5

Survey Targets

Parent companies located outside HK

Companies in HK representing parent companies located outside HK

>

( > 6612 ) ( 6612)

2008 SCoRPP. 6

First working day in June

Survey Reference Date

2 June 2008

2008 SCoRPP. 7

How is a company classified as an RHQ, RO or LO?

Taking charge of

business/operations on behalf of

its parent company

located outside HK?

Non-RHQ/RO/

LO

No

Yes Geographical responsi

bility?

LO

HK only

RHQ

Yes

In the region

Any managerial control over offices in the

region?

RO

(i.e. only coordinates offices and/or operations in the region)

No

2008 SCoRPP. 8

100

200

300

400

500

600

700

USA Japan UK MainlandChina

RHQ

RO

LO

0

957%

1199%

23818%

31124%

1285%

2349%

49419%

61224%

49918%

1736%

44016%

45217%

Country/Territory of Location of Parent Companies

No.

of

com

pan

ies

Note : Top 4 countries/territories listed in terms of total no. of RHQs, ROs and LOs.

2008 SCoRPP. 9

500

1 000

1 500

2 000

2 500

MainlandChina

Taiwan Singapore Korea Japan

RHQ

RO

0

33426%

38129%

44835%

48437%

1 13888%

62924%

66626%

78530%

94036%

2 13383%

Geographical Responsibility of RHQs and ROs

in the Region (other than HK)

No.

of

com

pan

ies

Note : Top 5 countries/territories listed in terms of total no. of RHQs and ROs having responsibility for the operation /business there.

2008 SCoRPP. 10

250

500

750

1 000

1 250

1 500

RHQ

RO

LO

0Wholesale,

retailand I/E trades

Businessservices

(excl. IT)

Financeand banking

ManufacturingTransportand related

services

826%

23018%

64650%

13210%

1199%

2008%

131951%

45718%

28411%

934%

813%

53119%437

16%

102838%

28210%

No.

of

com

pan

ies

Major Line of Business of RHQs, ROs and LOs

Note : Top 5 lines of business listed in terms of total no. of RHQs, ROs and LOs engaged in the lines of business concerned.

2008 SCoRPP. 11

250

500

750

1 000

1 250

1 500

RHQ

RO

LO

0Manufacturing Wholesale,

retailand I/E trades

Financeand banking

Businessservices

(excl. IT)

Transportand related

services

15712%

13310%

47737%

42933%

14811%

2439%

31512%

85933%

95937%

1958%

27110%

72126%

74927%

58321%

26610%

Major Line of Business of Parent Companies

No.

of

com

pan

ies

Note : Top 5 lines of business listed in terms of total no. of RHQs, ROs and LOs with parent company engaged in the lines of business concerned.

250

500

750

1 000

1 250

1 500

RHQ

RO

LO

0Wholesale,

retailand I/Etrades

Businessservices

(excl. IT)

Financeand banking

ManufacturingTransportand related

services

826%

23018%

64650%

13210%

1199%

2008%

131951%

45718%

28411%

934%

813%

53119%437

16%

102838%

28210%

No.

of

com

pani

es

2008 SCoRPP. 12

Views on Importance of Factors for Choosing Location for Setting up

RHQs/ROs and LOs

*In descending order of importance

RHQs/ROs*

1. Simple tax system and low tax rate2. Free flow of information

3. Corruption free government

4. Political stability and security5. Absence of exchange controls

LOs*

1. Simple tax system and low tax rate2. Free flow of information

3. Corruption free government

4. Political stability and security

5. Absence of exchange controls

2008 SCoRPP. 13

Views on Importance of Factors for Choosing Location for Setting up

RHQs/ROs and LOs

*In descending order of importance

RHQs/ROs*

1. Simple tax system and low tax rate2. Free flow of information

3. Corruption free government

Amongst the top three since 2004

LOs*

1. Simple tax system and low tax rate2. Free flow of information

3. Corruption free government

2008 SCoRPP. 14

FactorFavourable Unfavourab

le

Views on Favourable Factors for HK as a Location for Setting up RHQs/ROs

• Simple tax system and low tax rate• Free flow of information

• Absence of exchange controls• Corruption free government

71%69%68%67%

<0.5%

<0.5%1%

1%

• Political stability and security

65%

1%• Communication,

transport and other infrastructure

65%

1%

• Free port status 65%

1%

2008 SCoRPP. 15

FactorFavourable Unfavourab

le

Views on Unfavourable Factors for HKas a Location for Setting up RHQs/ROs

• Availability and cost of residential accommodation

• Availability and cost of business accommodation

14%

18%

34%

32%

2008 SCoRPP. 16

FactorFavourable Unfavourab

le

Views on Favourable Factors for HK as a Location for Setting up LOs

• Simple tax system and low tax rate

• Free flow of information

• Corruption free government

• Absence of exchange controls

• Communication, transport and other infrastructure

68%

64%

63%

63%

61%

1%

1%

1%

1%

1%

2008 SCoRPP. 17

FactorFavourable Unfavourab

le

Views on Unfavourable Factors for HKas a Location for Setting up LOs

• Availability and cost of residential accommodation

• Availability and cost of business accommodation

13%

17%

33%

31%

2008 SCoRPP. 18

Views on Overall Business Environment in HK

as a Location for Setting up RHQs/ROs and LOs

Deteriorated 15%

No comment 12%

Improved 15%

Same 58%

Deteriorated 15%

No comment 14%

Improved 14%

Same 57%

RHQs/ROs LOs

Comparing June 2008 with June 2007

2008 SCoRPP. 19

Views on Effect of CEPA Implemented since January 2004 on RHQs/ROs and LOs

Very much beneficial

2%

Negatively affected

1%

To some extent

beneficial26%

Not affected

58%No

comment12%

RHQs/ROs LOsVery much beneficial

2%

Negatively affected

1%

To some extent

beneficial24%

Not affected

59% No comment

14%

2008 SCoRPP. 20

EffectNo comment

12%

No78%

Yes10%

Setting up new

business expansion

plans

Advancing business

expansion plans

Views on Effect of CEPA on Investment Activities of RHQs/ROs and LOs

Whether investment activities affected ?

No comment

15%

Yes8%

No78%

RHQs/ROs LOs

2008 SCoRPP. 21

2008 Annual Survey of Companies in Hong Kong

Representing Parent Companies

Located outside Hong Kong