Doing Business in Hong Kong by pengtt

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									  Doing Business in Hong
          Kong
A discussion on the advantages for travel and
tourism operators to use Hong Kong as a hub
  to tap into China’s growing outbound travel
                     market.
               Speaker introduction

• Brenda Poon for Anthony Lau,
  Executive Director , Hong Kong Tourism Board
• Andrew Davis, Associate Director-General, InvestHK
• Steven Ballantyne,
  Director of International Development, Guild of Travel and
  Tourism
Travel Business Opportunities in Hong Kong




             World Travel Market Seminar
            “Doing Business in Hong Kong”

Andrew Davis
Associate Director-General
9 November 2010
Hong Kong Tourism Snapshot:

• Annual visitors reached 29.6 million tourists in 2009
• 17.7 million tourists are from Mainland China
• Forecast tourists to reach 57 million in 2020
• Visitors expenditure reached HK$162,891 million in
  2009
• 1,485 registered travel agents in Hong Kong in 2009
Advantages
• Asia’s most popular city destination –
  29.6 million visitors in 2009
• Visa free entry to over 170 countries
• Local population of 7 million with
  GDP per capita second highest in
  Asia after Japan
• 95 airlines operating 875 flights per
  day to 155 destinations worldwide
  including 40 cities in Mainland China
• Excellent communication and
  transportation infrastructure for
  regional management
Opportunities

• North Asia cruise market continues to grow at an
  exponential rate & Hong Kong’s new cruise terminal set to
  open in 2013 will attract even more cruise lines
• Increasing number of corporate regional offices in Asia
• CEPA bestows Hong Kong–based travel companies
  preferential treatment in China
• HK & Guangzhou Tourism Co-operation
• Expansion of Disneyland & redevelopment of Ocean Park
• New integrated transportation infrastructure, e.g. Speed
  Railway & the HK Zhuhai Macau Bridge
                New Cruise Terminal




Ocean Park
Redevelopment
                                                                           Project in progress
 Investment in Infrastructure                                              Project completed


                                                                   Lok Ma Chau loop joint
                                                                   development – 2009 (studies)


                                                         Lok Ma Chau
                                                         crossing - 2007

HK – Shenzhen
Western Corridor
Bridge - 2007
                                                                    Guangzhou – Shenzhen – Hong
                                                                    Kong Express Rail Link - 2014


Tuen Mun – Chek Lap
Kok Link - 2016                                                                       Sha Tin to Central
                                                                                      Rail Link - 2015/19




                                                                                      New Cruise
                                                                                      Terminal at Kai
                      West Kowloon Cultural District –                                Tak - 2014/15
                      completion of master planning in
                      mid 2011
                                                                    South Island MTR
       Hong Kong – Zhuhai – Macao Bridge                            Line - 2015
       overall length of 50km - 2015/16
Global Travel Companies in Hong Kong

•   China International Travel Service
•   Ctrip.com
•   American International Travel
•   Farrington American Express
•   Kuoni Travel
•   Club Med
•   Hotels.com
•   Zuji.com
•   Travelzoo
•   Costa Cruises (subsidiary of Carnival Corporation)
•   Star Cruises
•   MSC Cruises
Quote from Kuoni Travel & Costa Cruises

   “ Hong Kong has been for over 30 years our operation centre in Asia due to unparallel
     business condition. Beside the central location, we find the best airport in the world, an
      extremely efficient workforce, cutting edge technology, and a great support from the
    business community. Hong Kong is the ideal place to spearhead Kuoni growth in Asia.”
                                                                             Olivier Moeschler
                                                         Vice President Asia Pacific and USA
                                                  Kuoni Travel Ltd. - Destination Management


“We wanted to offer a new itinerary of Asia cruises to our existing European and American
   clients and, at the same time, we aim to build a new level of interest in cruising among
   Asian holidaymakers. From Hong Kong I can easily access all major markets in this
   regions. It’s not only about physical proximity, it’s also about the number and frequency
   of regional & international flights that Hong Kong offers”
                                                                                 Dario Rustico
                                                                                Costa Cruises
                                            Sales & Marketing Director, Pacific Asia Operation
Travel Services Industry

        Steps to Set Up a Travel Agent in HK
 • Find a suitable place and establish a limited company
 • Apply for Association membership from one of the 8
   members of Travel Industry Council
 • Apply for Travel Industry Council membership
   registration as ordinary member
 • Apply to the Travel Agents Registry for a travel licence
 • Application takes around 4-6 weeks
Requirements to Become Ordinary Member of
Travel Industry Council

 Ordinary Member
 • Set up limited company in HK
 • Minimum paid up capital of HK$500,000 (GPB40,100) plus
   additional HK$250,000 (GBP20,050) for each branch office
 • Conduct business within separate & independent premises
   which are used solely for travel-related & tourism business
 • Employs at each office at least a manager who has within the
   recent 5 years had at least two continuous years relevant
   practical experience and at least one other full-time staff
   member
Fees for TIC Membership


 Fee                       Ordinary Member

 Application Fee           HK$3,000/GBP240
 Annual Subscription       HK$1,000/ GBP 80 &
                           HK$600/GBP48 per branch
 Compulsory Contribution to
 TIC Board                  HK$2,000/GBP160
Rates for Licences and Other Services
from Travel Agent Registry

For application of a licence                 HK$630/
                                             GBP50
For licence or the renewal of a licence      HK$485/
(per month)                                  GBP39

For amending a licence                       HK$665/
a) For an additional address, for each new   GBP53
    premises
b) Otherwise                                 HK$160/
                                             GBP13
CEPA
Privileges for Hong Kong-based travel companies

•   Hong Kong travel agents are permitted to set up on a wholly-owned or
    joint venture basis in Guangdong Province to apply for the operation of
    group tours to Hong Kong and Macao for residents of Guangdong
    Province (residents registered with permanent residence in Guangdong
    Province).
•   Hong Kong travel agents established in Guangxi, Hunan, Hainan, Fujian,
    Jiangxi, Yunnan, Guizhou and Sichuan will be allowed to apply for the
    operation of group tours to Hong Kong and Macao on a pilot basis for
    the permanent residents in these provinces.
•   Hong Kong permanent residents with Chinese citizenship will be
    allowed to take the "Mainland Qualification Examination for Tourist
    Guide". Those who have passed the examination can obtain the
    "Mainland Tourist Guide Certificate" in accordance with the relevant
    requirements.
RIGHT PLACE
   Hong Kong’s
Enduring Advantages
One Country, Two Systems




•   Rule of law and independent judiciary
•   Level playing field and no foreign ownership restrictions
•   Political stability and pro-business governance
•   The World’s Freest Economy for 16 consecutive years
•   Hong Kong negotiates and signs its own economic and trade
    agreements and is a full and separate member of the WTO and APEC
Heart of Asia
                • The world's 3rd busiest
                  international passenger
                  airport
                • Around 95 scheduled airlines
                  operating some 875 flights
                  per day to about155
                  destinations
                • One of the world’s busiest
                  container ports
                • 23 minutes from central
                  business districts to Airport by
                  high-speed train
                • Plans to expand Hong Kong
                  International Airport
Most Competitive Finance Centre in Asia
                                                                     Ranking            City
  • Home to 69 of the world’s 100                                    1                  London, New York
    largest banks                                                    3                  Hong Kong
                                                                     4                  Singapore
  • Asia’s 2nd largest stock market and
                                                                     5                  Tokyo
    6th in the world
                                                                     6                  Chicago
  • Total market capitalisation as at end                            7                  Zurich
    July 2010 - US$2.3 trillion                                      8                  Geneva
                                                                     9                  Shenzhen, Sydney
  • World’s 6th largest foreign exchange                             10                 Shanghai
    centre
                                                                     11                 Toronto
  • 1st globally in IPOs in 2009, raised                             …
    US$31 billion                                                    15                 Beijing, San
                                                                                        Francisco

Source: HKEx, HKTDC, World Federation of Exchanges, Time Magazine   The Global Financial Centres Index (GFCI) 7, City of
                                                                    London Corporation, March 2010
 World Class ICT - Connecting People

• Asia’s most innovative economy
  Global Innovative Index

• Mobile phone penetration rate 171%
• 7th most e-ready economy in the world
  Economist Intelligence Unit

• 3rd highest average broadband
  connection speed
  US-based network provider Akamai Technologies
 Low and Simple Tax System
  Corporate Income        Personal Income         Employer Social Security    Employee Social Security   VAT


     25                   45                            49                   23        17       China


 17          20        14.5        20        7                                                  Singapore


16.5       15     5 5 0                                                                         Hong Kong



 •     Only imposes three direct taxes - profits, salaries and property
 •     NO VAT/GST or sales tax                               • NO Estate duty
 •     NO Capital gains tax                                  • NO Global taxation (offshore income
                                                               and only HK-sourced income is
 •     NO Withholding tax on dividends
                                                               taxable)
       and interest
                                                             • NO Wine duty

Source: Forbes Tax Misery Index 2009, Inland Revenue
Forbes Tax Misery Index 2009




           Source: Forbes magazine
Asia’s Leading City for International Business
     643
                                                                                                                     Regional Headquarters
                 526
                                                                                                                     Regional Offices
431                           447


           289
                       224                213
                                                     127          123                                                                                  138
                                    115         96                           104
                                                            74                                         91
                                                                        66            54 49 43               40 51         22
                                                                                                                                  46
                                                                                                                                        21
                                                                                                                                             42
                                                                                                                                                     19
                                                                                                                                                                  44
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                        3,580 regional headquarters and offices
     Source: 2009 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong,
     Census & Statistics Dept, HKSARG
Multilingual and Highly Skilled Workforce

• International business exposure
  and experience especially in
  Asia and Mainland China
• Tri-lingual environment and
  English the usual language of
  business
• Strong work ethic, efficiency and
  can-do attitude
• Home to Asia’s leading
  universities and business
  schools
Quality Education and Workforce

• Home to Asia’s leading universities and business schools
   – HKU 1st CUHK 2nd and HKUST 4th in Asia, all in the world’s Top 50
     Times Higher Education QS World University Rankings 2009
   – World’s Top EMBA in 2009 - Kellogg - HKUST EMBA Programme
   – MBAs run by HKUST and CUHK ranked 1st and 5th in Asia
     Global EMBA Rankings by the Financial Times

• HKPU and CUHK offers courses in Tourism & Hospitality
  and F&B. HKPU is ranked No. 2 in the world in Tourism &
  Hospitality research contribution
• Dependents have automatic right to work
• Permanent residency after 7 years
Quality of Life
 RIGHT TIME
New Opportunities
Four Pillar industries


 • Business and            • Tourism
   Professional Services
 • Financial Services      • Trade and Logistics
Opportunities in 6 New Areas:

•   Testing and Certification
•   Medical Services
•   Innovation and Technology
•   Cultural and Creative Industries
•   Environmental Industry (in particular solar energy and R&D)
•   Educational services


Other Opportunity:
• Wine
Get in touch !




 www.investhk.gov.hk
 Email: enq@InvestHK.gov.hk
 Tel: (852) 3107 1000
The Chinese Outbound Tourist market
    will continue to grow globally!
The Chinese Outbound Tourist market
    will continue to grow globally!
 Verified!
 China’s outbound tourism in 2009 was a remedy in turbulent times:
 2009 – Outbound tourism World: -4% travels, -6% spending
         Outbound tourism China: +4% travels, +4% spending



                              Source: China Outbound Tourism Research Institute
The Chinese Outbound Tourist market
    will continue to grow globally!
Who?
•Small groups on Incentive trips
•Top management of companies and government bureaus
•“internationalised” Chinese
•4:2:1 (3 generations)
•Middle and high income

                                   Source: Travel Distribution Summit Asia 2007
The Chinese Outbound Tourist market
Who?
     will continue to grow globally!
•White collar annual income: US$ 25K on average
•Established pattern of business trips combined with leisure
holidays
•Increased awareness of luxury destinations
•Desire to “outclass” others
•Prefer convenience and access to a range of activities

                                   Source: Travel Distribution Summit Asia 2007
Are you ready to access this
     growing market?
Are you ready to access this
     growing market?
Having a presence in Hong Kong is a solution
Why set up in Hong Kong?

      Localisation!
           Why set up in Hong Kong?

                    Localisation!

One country, two systems

•To operate in HK means you are already operating in China

•Direct access to this growing outbound market

•Understanding the Chinese culture is key to success
           Why set up in Hong Kong?

                    Localisation!
Hong Kong presence gives small business credibility

•   Language differences in Greater China
•   Lack of confidence in foreign languages
•   Chinese search engines
•   Trust in local presence
•   Customer feels important
      Why set up in Hong Kong?

              Localisation!

How do small operators (with limited resources)
             access this market?
      Why set up in Hong Kong?

              Localisation!

How do small operators (with limited resources)
             access this market?

  • Government agencies
      Why set up in Hong Kong?

              Localisation!

How do small operators (with limited resources)
             access this market?

  • Government agencies
  • Travel industry trade associations
      Why set up in Hong Kong?

              Localisation!

How do small operators (with limited resources)
             access this market?

  • Government agencies
  • Travel industry trade associations
  • Consortiums
• Direct sales
       • B2B: The tour operators and agents
       • B2C: travelling public
• Internet marketing
       • The Great Firewall of China
       • Hosting packages
       • Email marketing
• Local representation
       • Selecting a local partner
       • Monitoring performance
      Contact us

www.guildtraveltourismhk.com

     www.investhk.com

www.discoverhongkong.com
            Questions and Answers


• Andrew Davis, Associate Director-General, InvestHK
• Steven Ballantyne,
  Director of International Development, Guild of Travel and
  Tourism

								
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