Canadian businesses love Hong Kong - here’s why you should invest, too
Article 3 minute read

Canadian businesses love Hong Kong - here’s why you should invest, too

19 December 2018

Think of Hong Kong investment and the big world players spring to mind - a former British colony, a simpler entry point for US investment in Asia. But that history and status brings other entrants to the FDI table, too.

Sometimes two jurisdictions share such a strong bond and long history that it’s inevitable trade will follow. Such is the case with Canada and Hong Kong, whose relationship stretches back to colonial times. Both were part of the British Empire, and routes developed between the two for trade and passengers moving around the colonies. 

When Hong Kong became a “Special Administrative Region” of China in 1997, the relationship did not diminish. In fact, Hong Kong’s high degree of autonomy in economic, trade, financial and monetary matters means it has continued its position as the world’s gateway to Asia.

Vast sums flow between the two regions; at the end of 2016, Hong Kong’s outward direct investment in Canada was C$12.6 billion, while investment from Canada in Hong Kong was C$7.4 billion. The Investment Promotion and Protection Agreement (IPPA) signed between the two countries in 2016 provides assurance to Canadian investors that their investments in Hong Kong are adequately protected, while the Hong Kong-Canada Comprehensive Avoidance of Double Taxation Agreement of 2014 strengthens bilateral economic and trade ties. Both countries are also members of bodies such as the Asia Pacific Economic Cooperation (APEC) and the Trans-Pacific Partnership, encouraging further economic ties.

Merchandise, services and expat communities

Hong Kong was Canada’s 13th largest export market in 2017, with merchandise trade amounting to C$2 billion, but it is Canada’s largest export market for frozen beef, and fourth largest for fish and seafood. Other major Canadian exports to Hong Kong include meat and meat preparations, and crude animal and vegetable materials.

But that’s just physical trade. Canadian financial institutions play an active role in Hong Kong’s banking and insurance sectors, with seven Canadian or Canadian-controlled banks operating in the special administrative region, including the Bank of Nova Scotia and Toronto-Dominion Bank. RBC Investor Services and Scotiabank also operate under restricted license in Hong Kong, and around 21 Canadian-controlled firms engage in brokerage, investment advisory and asset management in the islands.

Hong Kong also ranks third as a global destination for Canadian exports of services, which were worth C$2.9 billion in 2017.

To support this trade and investment, there are large numbers of Canadians living in Hong Kong. In fact, the Canadian community is among its largest foreign communities. This flow goes both ways, too; there were more than 2,400 Canadian study permits issued to citizens of Hong Kong in 2018, and more than 1,200 people from Hong Kong were admitted as permanent residents of Canada in 2017.

Supporting Canadian investment in Hong Kong

The Canadian Chamber of Commerce in Hong Kong has supported Canadian businesses and citizens in Hong Kong since 1977. It’s one of the largest Canadian business organisations outside of Canada with more than 1200 members, and aims to connect Canadian businesses with opportunities in Hong Kong, Mainland China, and the broader Asia-Pacific region.

Supporting Canadian businesses, too, is TMF Group. With offices in both Hong Kong and Canada, our local experts work with myriad Canadian businesses, supporting their investment and growth objectives in the region and beyond. 

Get in touch with our offices in Hong Kong, Toronto or Vancouver to discover how we can get you growing in Asia.

Insights and updates delivered to your inbox.

Sign up to receive a weekly round up of posts that matter most to you. 

Sign up now