Hong Kong's attractiveness as a place to do business is reflected by two major indicators, namely the inflow of foreign direct investment (FDI), and the number of foreign-owned regional headquarters and regional offices of companies incorporated outside Hong Kong.

A Census and Statistics Department survey shows that Hong Kong's FDI inflow in 2003 amounted to US$13.6 billion. According to the 'World Investment Report 2004' released by the United Nations Conference on Trade and Development, Hong Kong was the second largest recipient of FDI in Asia in 2003.

Hong Kong had 9 072 enterprise groups¹ with inward direct investment at the end of 2003, comprising 273 in the manufacturing sector and 8 799 in the non-manufacturing sectors. The market value of the stock of inward direct investment amounted to $2,960.4 billion. Chart 3 shows the major economic activities of these enterprise groups while Chart 4 shows source countries/territories of the inward direct investment. Regarding employment, 70 per cent of them were enterprise groups employing fewer than 20 persons Chart 5.

Chart 3:

Position of Inward Direct Investment in Hong Kong at Market Value

by Major Economic Activity of Hong Kong Enterprise Group at end-2003

Chart 4

Position of Inward Direct Investment in Hong Kong at Market Value

by Major Investor Country/Territory at end-2003

Remarks: British Virgin Islands and Bermuda are important offshore financial centres commonly used by investors to channel inward direct investment funds to Hong Kong.

Chart 5

Number of Hong Kong Enterprise Groups (HKEGs) with

Inward Direct Investment by Employment Size in mid-2003

According to the survey conducted by the Census and Statistics Department, as at June 1, 2004, there were 3 609 companies in Hong Kong that were regional headquarters and regional offices of companies incorporated outside Hong Kong. Compared with the corresponding figure of 3 207 recorded for 2003, this was an increase of 12.5 per cent.