2010 Annual Survey of Companies in Hong Kong Representing Parent Companies

1. 政 府 統 計 處 Census and Statistics Department 2010 Annual Survey of Companies in Hong Kong Representing Parent Companies Located outside Hong Kong 2010 SCoRP

2. Survey Objectives (i) To enumerate number of RHQs, ROs and LOs in HK representing parent companies located outside HK (ii) To obtain basic information of these companies (iii) To seek their views on HK as a location for setting up RHQs/ROs and LOs 2010 SCoRP

3. Survey Coverage Covers companies in HK taking charge of business/operations in HK or in the region on behalf of parent companies located outside HK Does not cover companies in HK which are funded by investment from outside HK and manage the business in HK or in the region independently but not on behalf ofinvestors 2010 SCoRP

4. Survey Coverage • RHQs + ROs + LOs ≠ Total no. of companies in HK with investment from outside Hong Kong 2010 SCoRP

5. Survey Targets   Companies in HK representing parent companies located outside HK Parent companies located outside HK > ( > 6 561) ( 6 561) 2010 SCoRP

6. Survey Reference Date • First working day in June • 1 June 2010 2010 SCoRP

7. Geographical responsibility? Any managerial control over offices in the region? In the region Yes No (i.e. only coordinates offices and/or operations in the region) No HK only Yes Non-RHQ/RO/LO LO RHQ RO How is a company classified as an RHQ, RO or LO? Taking charge of business/operations on behalf of its parent company located outside HK? 2010 SCoRP

8. No. of RHQs, ROs and LOs in HK Representing Parent Companies Located Outside HK No. of Companies 2010 SCoRP

9. Country/Territory where Parent Company was located No. of companies Note: The top 4 countries/territories shown in terms of total no. of RHQs, ROs and LOs. 2010 SCoRP

10. Geographical Responsibility of RHQs and ROs in the Region (other than HK) No. of companies Note: The top 5 countries/territories shown in terms of total no. of RHQs and ROs having responsibility for the business/operations there. 2010 SCoRP

11. Major Line of Business of RHQs, ROs and LOs No. of companies Note: The top 5 major lines of business shown in terms of total no. of RHQs, ROs and LOs engaged in the lines of business concerned. 2010 SCoRP

12. Major Line of Business of Parent Companies No. of companies Note: The top 5 major lines of business shown in terms of total no. of RHQs, ROs and LOs with parent company engaged in the lines of business concerned. 2010 SCoRP

13. Views on Importance of Factors for Choosing a Location for Setting up RHQs/ROs and LOs RHQs/ROs* LOs* 1.Simple tax system and low tax rate 1. Simple tax system and low tax rate 2.Free flow of information 2. Free flow of information 3.Corruption-free government 3. Corruption-free government 4. Absence of exchange controls 4. Absence of exchange controls 5. Political stability and security 5. Political stability and security *In descending order of importance 2010 SCoRP

14. Views on Importance of Factors for Choosing a Location for Setting up RHQs/ROs and LOs RHQs/ROs* LOs* 1. Simple tax system and low tax rate 1. Simple tax system and low tax rate 2. Free flow of information 2. Free flow of information 3. Corruption-free government 3. Corruption-free government Amongst the top three since 2004 *In descending order of importance 2010 SCoRP

15. Views on Favourable Factors for HK as a Location for Setting up RHQs/ROs 73% 1% • Simple tax system and low tax rate • Free flow of information 72% <0.5% • Corruption-free government 69% <0.5% • Absence of exchange controls 69% 1% • Communication, transport and other infrastructure 67% 1% • Free port status 66% 1% • Geographical location 1% 64% 2010 SCoRP

16. Views on Unfavourable Factors for HK as a Location for Setting up RHQs/ROs • Availability and cost of residential accommodation 13% 36% • Availability and cost of business accommodation 18% 33% 2010 SCoRP

17. Views on Favourable Factors for HK as a Location for Setting up LOs • Simple tax system and low tax rate 72% 1% • Free flow of information 70% <0.5% • Corruption-free government 68% 1% • Absence of exchange controls 67% 1% • Communication, transport and other infrastructure 66% 1% • Free port status 64% 1% 2010 SCoRP

18. Views on Unfavourable Factors for HK as a Location for Setting up LOs • Availability and cost of residential accommodation 14% 33% • Availability and cost of business accommodation 18% 32% 2010 SCoRP

19. Views on Overall Business Environment in HKas a Location for Setting up RHQs/ROs and LOs Comparing June 2010 with June 2009 RHQs/ROs LOs Deteriorated 12% Deteriorated 13% Improved 13% Same64% Improved 13% Same64% No comment 11% No comment 11% Note: Percentages of components may not add up to 100 owing to rounding. 2010 SCoRP

20. Views on Effect of CEPA Implemented since January 2004 on RHQs/ROs and LOs RHQs/ROs LOs Very much beneficial2% Very much beneficial2% To some extent beneficial23% To some extent beneficial22% Not affected65% Not affected63% No comment11% No comment11% Negatively affected1% Negatively affected1% Note: Percentages of components may not add up to 100 owing to rounding. 2010 SCoRP

21. No comment 11% No comment 11% Yes10% Yes8% No79% No81% Views on Effect of CEPA on Investment Activities of RHQs/ROs and LOs Whether investment activities affected ? LOs RHQs/ROs Effect Setting up new business expansion plans Advancing business expansion plans 2010 SCoRP