Hong Kong is the world’s top international financial centre (IFC) and most popular onshore and mid-shore jurisdiction, according to the latest report on the corporate services industry, conducted by Vistra.
Vistra found the rise in Chinese companies listing on the Hong Kong Stock Exchange and a growing base of Chinese high net worth individuals have largely contributed to the city’s leading position.
Coming in joint second were the British Virgin Islands (BVI) and the UK, followed by the US and Singapore.
Commenting on BVI’s position, Vistra said: “The BVI remains at number two and has experienced growth in new incorporation volumes—11.2 percent in the first nine months of 2018 over the previous year, in Vistra’s portfolio, much of it reliant on Chinese investment.”
It added: “Where the BVI is seen as challenged, this has primarily been due to perception rather than the quality or prospects of the jurisdiction. However, it will be interesting to see how new regulatory changes may impact the popularity of this jurisdiction in the future.”
Considering the UK, Vistra stated: “In prior years, Brexit was not an issue and the UK’s favourable corporate tax rate and flexible labour legislation provided a friendly environment as an IFC.”
It added: “Today, respondents take a dimmer view of Brexit’s implications with only 35 percent expecting the UK to become more open to the industry and IFCs after Brexit. If the country cannot provide attractive conditions for business, it is expected that a greater number of organisations will switch to Luxembourg or Frankfurt as their European headquarters.”
Vistra highlighted that globally there has been an increase in demand for transparency due to the negative publicity towards offshore centres.
According to Vistra, this is due to the changing regulatory landscape that aims to meet these demands.
Vistra indicated: “It is timely to review whether offshore jurisdictions might fall out of favour and the research shows that there has been limited change in the popularity of jurisdictions compared to the last report released a year ago, with the top five comprising the same jurisdictions.”
Vistra’s report questioned 800 industry professionals in the corporate services industry from around the world between June and August 2018.
Jonathon Clifton, regional managing director of Asia and the Middle East at Vistra, said: “At the time of our research, we found there is a continuing trend towards onshore and mid-shore jurisdictions, with the top five dominated by IFCs either in or close to the world’s political centres.”
He added: “This also confirms our overall research findings that despite the uncertainties of globalisation, the industry continues to be optimistic towards driving economic growth.”
