Invest HK announced yesterday that 6,612 overseas and mainland companies had set up representative offices in Hong Kong by early June, up 2.7 percent year-on-year.

Director-General of Invest HK, Mike Rowse, however, said that Hong Kong has to strive to create more favorable conditions to attract external investment amid the contraction of the global economy.

According to a survey conducted by Invest HK and the Census and Statistics Department, the 6,612 representative offices in Hong Kong as of June 2 included 1,298 regional headquarters, 2,584 regional offices and 2,730 local offices.

Rowse noted that the global economy is being hit by the US financial turmoil, but the extent of the impact will be relatively minor for Asian economies. Besides, more US capital will flow to the less-affected Asian economies.

"US companies will be looking for opportunities in continents with reasonable prospects for growth, such as Asia," he said.

The survey results indicate that 311 regional headquarters and 612 regional offices are from the US, which tops the list of economies investing in Hong Kong.

Rowse stressed that Hong Kong can compete with cities such as Shanghai and Singapore in luring overseas companies, saying Hong Kong can serve as a coordination center.

Furthermore, he said that the business environment of Hong Kong is more transparent than its counterpart in Shanghai.

Additionally, the survey said that the simple tax system, free flow of information, absence of exchange controls, free port status and a corruption-free government are the key factors that make Hong Kong a prominent destination for overseas companies.

However, 30 percent of overseas companies considered the availability and cost of residential and business accommodations the main obstacles in Hong Kong.

(HK Edition 10/07/2008 page2)