Why Global Tech Companies Are Setting Up in Hong Kong

Hong Kong is strongly positioning itself as Asia’s premier destination for tech businesses, startups, and investors. Through supportive policies, low taxes, and expanding innovation hubs, the city is positioning itself as a gateway to regional and global growth.

At a recent media briefing hosted by InvestHK, Wendy Chow, Head of Information and Communications Technology, highlighted how Hong Kong continues to attract foreign companies by offering a competitive and accessible business environment, especially for those in the tech industry.

Business-Friendly and Globally Connected

Hong Kong’s location is one of its biggest advantages. It is within a five-hour flight of half the world’s population and connected to more than 220 destinations by around 120 airlines. On top of that, the city’s tax system is among the most attractive globally. It offers no VAT, no capital gains or global income taxes, and a low profits tax of 8.25 percent for the first HK$2 million in earnings.

According to InvestHK, more than 9,900 foreign companies now operate in Hong Kong, with over 1,400 serving as regional headquarters. Many of these businesses come from Mainland China, the United States, the United Kingdom, Japan, and Singapore.

A Growing Tech and Startup Ecosystem

Hong Kong’s technology landscape is rapidly expanding through the efforts of key players like Hong Kong Science and Technology Parks (HKSTP) and Cyberport. HKSTP is home to over 2,000 tech enterprises, including 12 unicorns, and offers incubation, R&D, and venture funding. Cyberport supports more than 1,900 startups in areas such as fintech, AI, big data, cybersecurity, and digital entertainment.

The local startup community is showing strong momentum. In 2024, the number of startups reached 4,694, with a total headcount of over 17,600. That’s a 65 percent increase in employment compared to 2020.

To support innovation, the government offers a wide range of funding programs. These include:

• Up to HK$10 million in support for R&D projects through the Enterprise Support Scheme

• Up to HK$50 million per project through the Partnership Research Programme

• A 300 percent tax deduction on the first HK$2 million of eligible R&D expenses

• Assistance for overseas market expansion, patent applications, branding, and more

• Subsidies for hiring R&D talent through the Research Talent Hub for up to three years

There are also schemes to fast-track work visas for tech talent and a government-backed fund-of-funds to boost investment in strategic sectors such as AI and green technology.

Building Hong Kong’s AI Capabilities

To support its fast-developing AI ecosystem, Hong Kong has launched new supercomputing facilities. The Cyberport Artificial Intelligence Supercomputing Centre started operations in late 2024, offering 1,300 PFLOPS of computing power. It is expected to scale up to 3,000 PFLOPS in 2025. HKSTP also launched its own high-performance computing setup with 300 PFLOPS capacity, aimed at tech companies and research institutions.

The city has introduced a three-year AI Subsidy Scheme to help startups and companies access this infrastructure. The scheme can subsidize up to 70 percent of computing costs, making it easier for smaller companies to leverage advanced AI tools.

Stronger Ties with the Greater Bay Area

One of the city’s most ambitious projects is the upcoming Hong Kong–Shenzhen Innovation and Technology Park. This new hub will enhance cross-border collaboration between Hong Kong and Mainland China, especially in high-growth areas like AI, biotechnology, and advanced manufacturing. The park aims to help startups scale faster by providing access to both markets.

With its mix of talent, funding, infrastructure, and government support, Hong Kong is shaping itself into a leading hub for innovation in Asia. For startups and tech companies looking to scale in the region, the city is offering more than just a place to set up, it’s offering a platform for long-term growth.