Asia is an extraordinarily attractive market for tech businesses seeking expansion opportunities and Hong Kong is well positioned to be the conduit. In 2024, an all-time-high of 539 companies set up or expanded in the city as assisted by Invest Hong Kong, bringing companies with overseas or Mainland parent companies in Hong Kong to nearly 10,000. This concentration isn’t coincidental – Hong Kong not only offers an attractive business environment but also serves as a gateway unlocking access to the broader Asian region. As such, the city has established itself as a strategic hub for businesses looking to tap into the region’s potential. Notably, it has proven particularly attractive to innovation and technology (I&T) businesses.

Hong Kong as an emerging tech powerhouse

The transformation of Hong Kong into a tech company oasis is being driven by significant government investment and strategic planning. The government has invested more than USD 25 billion in recent years to promote innovation and technology development, with the Hong Kong I&T Development Blueprint establishing a clear path for the next 5 to 10 years.

This blueprint outlines eight major strategies across four development areas, i.e.:

• To enhance the I&T ecosystem and promote ‘new industrialization’ in Hong Kong
• To enlarge the I&T talent pool to create strong impetus for growth
• To promote digital economy development and develop Hong Kong into a smart city
• To proactively integrate into the overall development of the country and consolidate its role as a bridge connecting the Mainland and the world

These initiatives are already yielding impressive results. According to Invest Hong Kong’s 2024 annual report, innovation and technology represented the largest sector among completed projects, with 120 new establishments of overseas and Mainland companies in Hong Kong.

Hong Kong’s appeal as a tech hub is perhaps best captured by the rising number of startups, growing by nearly 50% over the last four years to 4,694 in 2024. A strong academic foundation offers a pipeline of highly skilled professionals, friendly immigration policies with various visa schemes attract talents from different parts of the world, availability of public and private funding helps ideas grow, and a diverse ecosystem fosters innovation – all make Hong Kong an ideal place to build, test, and scale the disruptive technologies of today and tomorrow.

Hong Kong as a gateway

While Hong Kong offers a promising market for I&T companies that target sectors like finance as its being the third financial centre globally, one of the city’s most compelling advantages is its role as a gateway to the broader Asian market. Ranked as the world’s freest economy by the Fraser Institute, Hong Kong offers a business-friendly environment and is well-positioned to be a “super-connector” and “super value-adder” for overseas companies looking to enter the Asian market, particularly Mainland China.

According to the Fraser Institute’s 2024 report, Hong Kong tops two of the five areas of assessment – “Freedom to trade internationally” and “Regulation” – as well as rising to third globally in “Sound money”.

Moreover, sitting at the very heart of the region, Hong Kong offers unparalleled connectivity, just a few hours away by plane from all other major regional cities. This strategic location is also actively leveraged by businesses, to the point where Hong Kong International Airport (HKIA) has become the world’s busiest air cargo airport, serving as a gateway between Mainland China and the rest of the world.

Hong Kong as a hub

Beyond its role as a gateway, Hong Kong offers unique advantages that cement its status as a global business hub. The city’s tax system is famously simple and competitive, with only three direct taxes and notable absences – no sales tax, no VAT, no capital gains tax, and no estate tax. The city also boasts a high quality of life, a robust legal system, as well as world-class infrastructure.

This positioning is further enhanced by the availability of diverse and multilingual talent. Hong Kong boasts 5 universities in the QS top 100 universities list, including City University of Hong Kong, which recently retained the title of “Most International University in the World” from Times Higher Education for the second year running.

Between the public I&T initiatives, unique geographical and cultural advantages, and business benefits, the city is attracting more and more tech businesses from all over the world. This influx of businesses, in turn, enlivens the scene, making for a dynamic ecosystem that’s growing more vibrant and mature by the day.

To learn more about what Hong Kong can do for your business, InvestHK, the Hong Kong Special Administrative Region Government Department responsible for attracting Foreign Direct Investment, is ready to assist. In 2024 alone, InvestHK organised, sponsored, or supported 470 events showcasing Hong Kong’s unique advantages and attracting more businesses to the city. We provide one-stop free and confidential facilitation services, with 100% of the clients rating InvestHK’s services as “very useful” or “useful”.

For more information, visit the InvestHK website or contact their representatives.