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Hong Kong the ‘Biggest Hub’ for Regional Treasury Centres

Hong Kong the ‘Biggest Hub’ for Regional Treasury Centres

(2 May 2019 – Asia) China’s booming economy and Hong Kong’s proximity to the mainland along with its Corporate Treasury Centres (CTC) tax incentive has positioned Hong Kong as the biggest hub of regional treasury centres (RTCs) for global corporates, according to the latest research from East & Partners.

Among global MNCs and large domestic corporates 27.1 percent have an RTC located in Hong Kong. British Virgin Islands and other Caribbean nations were home to RTCs for 23.6 percent of corporates with the Channel Islands rounding out the top three with 14.2 percent of large corporate RTC locations.

Hong Kong’s long-time rival Singapore was the location of RTCs for 13.1 percent of companies, marginally behind the United Kingdom, but ahead of other European centres Switzerland, Germany and Belgium – and growing quickly. The research also showed that specific industries were basing their RTCs in differentiated ways, with Hong Kong the preferred choice of RTC location for manufacturers (32.7 percent), retailers (31.8 percent) and wholesalers (21.7 percent). The traditional centres for non-bank financial institutions (NBFIs) of the British Virgin Islands/Caribbean and Switzerland continued to represent very high RTC concentrations, with 78.3 percent and 73.9 percent of NBFIs respectively running established RTCs in these tax friendly centres. More than one in five global companies are also looking to implement an additional centre over the coming 12 months. China and UK-based businesses were the most bullish in their plans with 49.5 percent of Chinese and 32.6 percent of UK-headquartered enterprises looking to extend their existing treasury network. Current political climates and their ensuing opportunities and challenges are partly driving the need for additional RTC resourcing for these two regions.

While one in five corporates have plans in place to expand their number of treasury centres, the majority of these companies, 25.2 percent, are still unsure on a location. This significant portion of businesses presents a clear opportunity for RTC destinations looking to attract such investment. The location for those still undecided however is likely to be in Asia with Hong Kong (15.8 percent), China (10.8 percent) and Singapore (9.4 percent) nominated as the top three expected locations for additional RTCs over the coming year. The firm’s Regional Treasury Centre report is based on direct interviews with 649 CFOs and Corporate Treasurers from the top 100 corporates across each of Australia, China, Germany, Hong Kong, Singapore, United Kingdom and the USA.

For more information on the report: Optimising the Regional Treasury Centre Offering

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