The Best Places to do Business
According to a new index based on six criteria including the degree of economic integration and labor costs, Hong Kong is the best place for business. The research carried out by Bloomberg, shows that Hong Kong remains a bastion of free-market policies and low corporate taxes. In the top five also entered the Netherlands, US, UK and Australia. Brazil closed the top 50, after India and Russia.
Bloomberg Rankings measured 160 markets on a scale of zero to 100 percent based on six factors: the costs of setting up; hiring and moving goods; the degree of economic integration; inflation and corruption; and the readiness of the local consumer base, a category that includes the size of the middle class, household consumption and GDP per person.
With its score of 49 percent, Hong Kong is very attractive for many big international companies such as HSBC Holdings Plc, General Electric Co. and Gap Inc. Hong Kong charges a corporate tax rate of 16.5 percent compared with the U.S.’s 35 percent, which makes it the best choice for companies to set up their Asian headquarters. Companies that want to stay close to China and the rest of Asia also prefer to settle in Hong Kong. Other pluses are its proximity to important emerging markets, the high quality of life and good infrastructure.
From the first 50, Germany is the leader in the categories: doing business, moving goods and less tangible costs, while the readiness of the local consumers is best in the United Arab Emirates; labor and materials are cheapest in Montenegro and the Netherlands was deemed best for setting up a business.
Unlike mainland China, Hong Kong has a reputation for rule of law and corruption-free administration. Its links to the Chinese economy give plus points by allowing it to serve as center for the international use of the yuan, and last August China further relaxed limits on investment flows.
The city also faces some challenges. It has largest wage gap in Asia, and only 25 percent of the land is developed, which forces up property prices and discontent among lower-paid locals.
The Netherlands earned second place, mainly due to the appeal of its five major ports and the easy access to mainland Europe. Among the companies based here are Royal Philips Electronics NV and ASML NV.
The World Bank also puts Singapore and Hong Kong first in its rating focused on the ease of doing business.
On a regional level, the best place to do business in Latin America is Chile, while in the Middle East and Africa on top of the chart is the U.A.E.; Poland is first in emerging Europe.
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