The number of resident companies and start-ups in Hong Kong both hit record highs

Hong Kong's investment attraction has hit a new high.

According to the latest annual survey conducted jointly by Invest Hong Kong and the Census and Statistics Department, there are 9,960 companies in Hong Kong with parent companies located outside Hong Kong this year, representing a sharp increase of about 10% over last year and a record high for the year. These companies employed nearly 500,000 people, representing a year-on-year increase of 5%.

It is worth noting that, among these 9,000-odd companies in Hong Kong, analyzed by the location of the parent company, the number of mainland companies in Hong Kong continues to top the list, reaching 2,620. Among them, quite a number of enterprises with high “scientific content” are coming into Hong Kong one after another, and some have even set up international headquarters in Hong Kong.

Hong Kong Productivity Council Chief Digital Director Lai Shaobin pointed out in an interview with the Securities Times reporter, the mainland science and technology enterprises have to go to Hong Kong to develop, can drive the development of Hong Kong's local industry chain upstream and downstream, for the development of Hong Kong's new quality of productive capacity, and promote the transformation of the new type of industrialization to provide a strong impetus.

Record high number of foreign companies in Hong Kong this year

“Enterprises are very pragmatic, as long as they can make money for them, they will definitely come to Hong Kong to continue to expand their business.” The Director of Hong Kong Investment Promotion, Mr. Kenneth Lau, said that despite Hong Kong being affected by uncertainties such as geopolitical tensions, enterprises at home and abroad are still confident in Hong Kong's prospects.

According to Hong Kong's latest statistics, the number of companies based in Hong Kong with parent companies outside Hong Kong this year has hit a record high of 9,960, a sharp rise of about 10% over last year. Analyzed by the location of the parent company, in addition to the mainland companies in Hong Kong with 2,620 topped the list, the United States, Britain and Singapore companies have 1,390, 720 and 520 respectively. Overall, the total number of companies in Hong Kong from the top 10 regions all recorded increases this year. The number of companies setting up regional headquarters in Hong Kong also reached 1,410, a year-on-year increase of about 5.5%.

Apart from reflecting the attractiveness of Hong Kong, the bright figures are also the result of Hong Kong's enhanced efforts in attracting investments. It is reported that as of November this year, Invest Hong Kong has assisted more than 500 enterprises to set up or expand their scale in Hong Kong, representing an increase of more than 50% over the same period last year. Proportionally, the figure has already exceeded the performance target set by Hong Kong in the 2022 Policy Address.

In order to further strengthen investment attraction and take the initiative to “grab enterprises”, Hong Kong has set up the Office for the Introduction of Key Enterprises, which is dedicated to introducing high-potential and representative key enterprises around the world in strategic industries such as life and health sciences, artificial intelligence and data sciences, financial sciences and technologies, advanced manufacturing and new energy sciences and technologies.

According to the Secretary for Commerce and Economic Development, Mr Yau Ying-wah, since the establishment of the Focused Enterprises Admission Office at the end of 2022, the Office has been actively contacting enterprises and organizations in strategic industries, and has so far successfully admitted more than 60 focused enterprises, which have already set up or plan to set up research and development (R&D) centers, financial centers, and production bases for advanced manufacturing in Hong Kong.

Mainland founders account for 40% of non-Hong Kong entrepreneurs

In addition to the international financial center, Hong Kong in recent years has also spared no effort to create a new “business card” - international innovation and technology center.

The Chief Executive of the Hong Kong SAR, Mr. Lee Ka-chiu, emphasized in the “Chief Executive's Policy Address 2024” that it is necessary to promote the development of Hong Kong as an international innovation and technology center, deepen the development of innovation and technology ecosystems and industries, and put forward the formulation of a medium- and long-term development plan for Hong Kong's new industries, the establishment of a $10 billion “Innovation and Technology Industry Guiding Fund”, and the development of a low-altitude economy. We have also proposed the formulation of a long-term development plan for Hong Kong's new industries, the establishment of a HK$10 billion “Innovation and Technology Industry Guiding Fund”, and the development of low altitude economy.

Introducing key enterprises and perfecting the local science and technology ecology are important measures for Hong Kong to build an international innovation and technology center. Among the thousands of mainland enterprises that have been introduced as key players, there is no lack of mainland science and technology giants such as Tech Data and Ningde Times. In addition, Hong Kong start-ups are continuing to thrive. Data shows that the number of startups in Hong Kong also hit a record high of nearly 4,700 in 2024, representing a year-on-year increase of about 10%. Apart from being founded by locals, 40% of the other founders of Hong Kong startups are from the Mainland.

In September this year, the HKSAR Government and the Ministry of Industry and Information Technology of the People's Republic of China signed the “Co-operation Agreement on Developing New Productivity to Promote New Industrialization”, which focuses on supporting the development of new productivity in Hong Kong, and promoting co-operation and joint development of industries with competitive edge in the two places, including assisting technology-based SMEs of the Mainland in going overseas for development.

The Secretary for Innovation, Technology and Industry, Mr. Sun Dong, said that supporting the development of start-ups in Hong Kong is an important part of improving the development of Hong Kong's innovation and technology industry chain. The Hong Kong Government is committed to supporting startups, advocating and strengthening the efficient cooperation among “government, industry, academia, research and investment”, enriching the channels of venture capital and financing, and introducing professional startup service organizations such as gas pedals and incubators from the Mainland and overseas to Hong Kong, so as to perfect the ecology of startups and promote the development of the innovation and technology industry.

Lai Shaobin: Hong Kong should join hands with more mainland enterprises to promote new productivity and new industrialization

In recent years, Hong Kong has been attracting international leading technology enterprises to set up locally one after another. With the unique advantage of “backing up to the motherland and connecting to the world” and years of accumulated international experience, Hong Kong has become an important window for the development of new quality productivity of the country and a “super contact” for high-quality “going out” of mainland enterprises. Hong Kong has become an important window for the country to develop new quality productive forces and a “super contact person” for mainland enterprises to “go global” with high quality. In this process, what kind of landing scenarios does Hong Kong create for enterprises? Enterprises stationed in Hong Kong how to help the development of local new quality productivity, Hong Kong and how to help enterprises to the global market? In this regard, the Securities Times reporter interviewed Lai Shaobin, Chief Digital Director of the Hong Kong Productivity Council.

Reporter from the Securities Times: According to your observation, how has the entrepreneurial atmosphere in Hong Kong changed in the past two years?

Lai Shaobin: Hong Kong as early as several years ago to vigorously promote the development of science and technology, from the past mainly focused on the university's basic research, and gradually transformed to the commercialization of scientific and technological achievements. About four years ago or so, initiatives such as the InnoHK program were implemented, which required newly established laboratories to focus on commercialization of technology and incubation of technological achievements into startups, promoting a shift in the atmosphere of GEM from research to solving problems and launching new products and services through technology. Coupled with the diversified services provided by the Science Park, Cyberport and the Hong Kong Productivity Council (HKPC), the entrepreneurial atmosphere has become increasingly vibrant. The Hong Kong Productivity Council alone, as the Industrial Artificial Intelligence and Robotics Research and Development Center of Create Hong Kong, has successfully incubated six startups.

Reporter from the Securities Times: In the past two years, many mainland science and technology enterprises have come to Hong Kong for development, and some of them have also set up international headquarters, how does this help Hong Kong develop new quality productivity?

Lai Shaobin: It is significant for mainland enterprises to come to Hong Kong for development. For Hong Kong, the development of these enterprises in Hong Kong is conducive to Hong Kong becoming an international city of innovation and promoting the development of new quality productivity. For the enterprises themselves, it is conducive to their “going overseas” through the Hong Kong market. Overseas can also be divided into three levels, products to the sea, Hong Kong has a wealth of experience and expertise in foreign trade, can help domestic enterprises to meet the product specifications of different countries and environmental protection and other requirements, help products to the sea; technology solutions to the sea, Hong Kong's internationalized application scenarios can provide enterprises with overseas customers valued the actual international application cases; enterprise overseas business operations, Hong Kong can become the international headquarters, to facilitate the enterprise to supply chain management, financing and capital management. In terms of overseas business operation of enterprises, Hong Kong can become the international headquarters, which is convenient for enterprises to carry out supply chain management, financing capital management, etc.

Reporter from the Securities Times: In promoting the development of new industrialization in Hong Kong, what unique role can mainland enterprises play?

Lai Shaobin: The HKSAR Government is committed to promoting the development of five emerging industries such as microelectronics, biotechnology, artificial intelligence smart manufacturing, new energy, etc., which are closely related to the development direction of mainland enterprises. Mainland enterprises coming to Hong Kong for development can complement Hong Kong and leverage on Hong Kong's internationalization advantage to expand their overseas business. At the same time, Hong Kong can attract international talents, including overseas Chinese technical experts, to boost the development of emerging industries. For example, the Hong Kong Productivity Council has seven employees of different nationalities, which can attract overseas talents to serve Hong Kong's emerging industries.

Reporter of Securities Times: What are the difficulties in the process of upgrading and transformation of traditional industries in Hong Kong? How does the Productivity Council help enterprises to transform?

Lai Shaobin: The key to the upgrading and transformation of Hong Kong's traditional industries lies in digitization and then intelligence, but enterprises face many difficulties. Many traditional enterprises have old equipment and limited capital, which makes it difficult for them to replace equipment and re-engineer processes on a large scale, and some of them do not have a good understanding of digital transformation. As early as 10 years ago, the Hong Kong Productivity Council, in cooperation with German partners, the introduction of Industry 4.0 solutions and localization, for small and medium-sized enterprises and traditional enterprises tailored to low-cost optimization of existing equipment and processes, to help them realize the digitalization of the accumulation of data to promote the development of intelligence. Nearly 1,400 intelligent projects have been completed, and these experiences can help more enterprises.

Reporter of Securities Times: What are the future prospects of Hong Kong in developing new quality productivity and new industrialization?

Lai Shaobin: Hong Kong has unique advantages and achievements in developing new productivity and new industrialization. In the future, with the deepening of cooperation with the mainland, it is expected to attract more mainland enterprises to come to Hong Kong and enhance international competitiveness. Collaborative innovation between the two places in emerging industries will give rise to more achievements and promote industrial upgrading. Hong Kong should continue to give full play to its internationalization advantages, attract and nurture international talents, optimize the business environment, provide sound supporting services, and move steadily forward on the road of new industrialization, so as to contribute to the country's economic development and achieve its own sustainable prosperity.

Reporter of Securities Times: What are the cases of Productivity Bureau in helping enterprises to expand the international market and enterprises to go overseas?

Lai Shaobin: There are two typical cases. In terms of products going to sea, an electronic product manufacturer customers asked to understand the carbon footprint of the product, the manufacturer does not know how to calculate, we rely on green manufacturing and environmental protection technology team to provide relevant services to help their products go to sea smoothly. In terms of technology going overseas, when Hong Kong Airport introduced automated driving technology, the Productivity Council assisted in formulating the bidding program, technical specifications and bid evaluation criteria. After a Beijing-based automated driving company won the bid, we helped it to adjust its technology to address the differences in driving directions between Hong Kong and the Mainland, and then successfully landed in Hong Kong Airport. Now the enterprise's technology has been applied in 10 different regional airports and expanded to the Middle East market, reflecting the important role of Hong Kong's internationalized application scenario for domestic enterprises' technology going overseas.