HK an ideal asset-management hub

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It forms a high-value added services chain with other professional services, such as legal, accounting, and corporate consulting, and strengthens our status as an international financial centre.

In 2005, the value-added per person engaged in the asset-management industry in Hong Kong was about $2.26 million, which is much higher than the corresponding figure of the financial-services sector as a whole.

The Government and our financial regulators recognise the importance of the asset-management industry. We have been sparing no effort in providing a conducive/suitable environment for the industry's development. We have also adopted multi-pronged measures to encourage funds that meet the relevant requirements to set up in Hong Kong.

As a small and open economy, Hong Kong has established itself as a major asset-management centre in Asia. The combined fund management business in Hong Kong was more than $6.154 trillion in 2006, representing a substantial growth of 36% from 2005.

Over the years, funds sourced from non-Hong Kong investors have consistently accounted for more than 60% of our fund-management business. In 2006, funds sourced from overseas investors totalled $3.786 trillion which shows that Hong Kong is an attractive location for overseas fund managers to conduct asset-management business.

Hong Kong has provided a unique and attractive platform for overseas investors to invest in the region. The Securities & Futures Commission survey also revealed that 80% of the assets managed in Hong Kong were invested in Asia in 2006.

HK's strengths as Asia's asset-management centre

So what makes Hong Kong an asset-management centre in Asia? The answer lies in our fundamental strengths as an international financial centre. Situated at the heart of Asia and as the gateway to Mainland China, equipped with excellent infrastructure, Hong Kong serves as an ideal platform for overseas fund managers to access the Asian markets.

We have rule of law, a low and simple tax regime, a stable currency with no foreign exchange control, and a free economy.

The 2008 Index of Economic Freedom study recently released by the Heritage Foundation again rated Hong Kong as the world's freest economy, for the 14th consecutive year. The foundation noted that our income and corporate tax rates are very competitive, business regulation simple, the labour market highly flexible, and investment strongly encouraged with virtually no restrictions on foreign capital.

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