Hong Kong, a bastion of free-market policies and low corporate taxes as well as the gateway to the world’s most populous nation, is the best place to do business, according to data compiled by Bloomberg, the news agency said.
The city of about 7 million people secured top position among 160 markets in a new index based on six criteria including the degree of economic integration and labor costs. The Netherlands, the U.S., the U.K. and Australia occupied the next four leading slots.
The ranking marks a victory for Hong Kong 15 years after the city’s return to Chinese sovereignty stoked concern that its role as an international financial hub would slide. General Electric Co. has established operations there, Gap Inc. is among the retailers drawn by the 28 million Chinese tourists who pass through it and HSBC Holdings Plc is one of the financial titans listed on its stock exchange.
Hong Kong scored 49 percent, eclipsing the Netherlands’ 48.3 percent and the U.S.’s 46.9 percent. Of the top 50, Germany was the leader on the basis of cost of doing business, moving goods and less tangible costs, while the readiness of the local consumers was deemed best in the United Arab Emirates. The price of labor and materials was lowest in Montenegro and the Netherlands was deemed best for setting up a business. Brazil came bottom of the top 50 with 35.5 percent, undershooting India at 35.9 percent and Russia at 36.1 percent.
Hong Kong’s reputation for rule of law and corruption-free administration has helped distinguish the city from mainland China. Its links to the world’s fastest-growing major economy have plus points by allowing it to serve as center for the international use of the yuan, and last August China further relaxed limits on investment flows.
Hong Kong charges a corporate tax rate of 16.5 percent compared with the U.S.’s 35 percent. The Washington-based Heritage Foundation has named Hong Kong the world’s freest economy for 18 successive years.
