Country Ranking: 1
Hong Kong: 76.6 billion
USA: 187.5 billion
The legal system in Hong Kong is separated into a system in Mainland China and is autonomous. Hong Kong follows the English Common Law, while China follows the civil law system. In the Court of Appeals, judges from other common law jurisdictions can sit in as non-permanent judges and the courts can consult decisions that were handed out by courts of other common law jurisdictions and use them as precedents.
Hong Kong has a 0 percent average tariff rate and remains one of the world’s most open economies for international trade and investment. Hong Kong’s first generally applicable competition law, the Competition Ordinance (the “Ordinance”), was enacted on June 14, 2012. The law brings about a major change to the legal landscape in Hong Kong by introducing a broad prohibition against agreements and abuse of market power that prevents, restricts or distorts competition in Hong Kong.
3. Limits on Government Regulation
The standard income tax rate is 15 percent, and the top corporate tax rate is 16.5 percent. The overall tax burden equals 13.7 percent of domestic income. Government expenditures amount to 18.5 percent of gross domestic product. Public debt is low, and a budget surplus has been maintained, but population aging and greater spending on social programs have increased fiscal pressures.
4. An Efficient Capital Market
As the economic and financial gateway to China, and with an efficient regulatory framework, low and simple taxation, and sophisticated capital markets, the territory continues to offer the most convenient platform for international companies doing business on the mainland. An impressive level of resilience has enabled it to navigate global economic swings and domestic shocks.
5. Monetary Stability
The labor market is vibrant, with flexible and well-enforced labor codes. Working hours and wages are largely determined by the market. Monetary stability is maintained through the exchange-rate peg to the U.S. dollar. The government provides some low-cost housing and green energy subsidies.
6. Low Tax Rates
Although the government controls all land in Hong Kong, the economy has benefited from its commitment to small government, low taxes, and light regulation. Major industries include financial services and shipping; manufacturing has largely migrated to the mainland. Hong Kong’s economy has become increasingly integrated with China through trade, tourism, and financial links.
7. Free Trade
Hong Kong is a global free port and financial hub, continues to thrive on the free flow of goods, services, and capital. As the economic and financial gateway to China, and with an efficient regulatory framework, low and simple taxation, and sophisticated capital markets, the territory continues to offer the most convenient platform for international companies doing business on the mainland.