Hong Kong - Country Commercial Guide
Investment Climate Statement-Hong Kong & Macau
Last published date: 2022-12-17

The U.S. Department of State’s Investment Climate Statements provide information on the business climates of more than 170 economies and are prepared by economic officers stationed in embassies and posts around the world.  They analyze a variety of economies that are or could be markets for U.S. businesses.  To access the ICS, visit the U.S. Department of State Investment Climate Statement website, including ICS for Hong Kong and Macau.

Executive Summary for the Investment Climate Statement on Hong Kong

Hong Kong

Hong Kong became a Special Administrative Region (SAR) of the People’s Republic of China (PRC) on July 1, 1997, with its status defined in the Sino-British Joint Declaration and the Basic Law.  Under the concept of “one country, two systems,” the PRC government promised that Hong Kong would be vested with executive, legislative, and independent judicial power, and that its social and economic systems would remain unchanged for 50 years after reversion.  The PRC’s imposition of the National Security Law (NSL) on June 30, 2020, undermined Hong Kong’s autonomy and introduced heightened uncertainty for foreign and local firms operating in Hong Kong.  As a result, the U.S. Government has taken measures to eliminate or suspend Hong Kong’s preferential treatment and special trade status, including the suspension of most export control waivers, revocation of reciprocal shipping income tax exemption treatments, establishment of a new marking rule requiring goods made in Hong Kong to be labeled “Made in China,” and imposition of sanctions against former and current Hong Kong government officials.

Since the enactment of the NSL in Hong Kong, U.S. citizens traveling or residing in Hong Kong may be subject to increased levels of surveillance, as well as arbitrary enforcement of laws and detention for purposes other than maintaining law and order.

On economic issues, Hong Kong generally pursues a free market philosophy with minimal government intervention.  The Hong Kong government (HKG) generally welcomes foreign investment, neither offering special incentives nor imposing disincentives for foreign investors.

Hong Kong provides for no distinction in law or practice between investments by foreign-controlled companies and those controlled by local interests.  Foreign firms and individuals are able to incorporate their operations in Hong Kong, register branches of foreign operations, and set up representative offices without encountering discrimination or undue regulation.  There is no restriction on the ownership of such operations.  Company directors are not required to be citizens of, or resident in, Hong Kong.  Reporting requirements are straightforward and are not onerous.

Despite the imposition of the NSL by Beijing, significant curtailments in individual freedoms, and the end of Hong Kong’s ability to exercise the degree of autonomy it enjoyed in the past, Hong Kong remains a destination for U.S. investment and trade.  Even with a population of less than eight million, Hong Kong is the United States’ fifteen-largest export market.  Hong Kong’s economy, with advanced institutions and regulatory systems, is bolstered by competitive sectors including financial and professional services, trading, logistics, and tourism sectors, although tourism continued to be severely impacted by COVID-19 and related travel restrictions.  The service sector accounted for more than 90 percent of Hong Kong’s nearly US$367 billion gross domestic product (GDP) in 2021.  Hong Kong hosts a large number of regional headquarters and regional offices.  According to Hong Kong census data, 1,267 U.S. companies are based in Hong Kong, with more than half regional in scope.  Finance and related services companies, such as banks, law firms, and accountancies, dominate the pack.  Over seventy of the world’s 100 largest banks have operations in Hong Kong.

Complete 2022 Hong Kong Investment Climate Statement.


Macau became a Special Administrative Region (SAR) of the People’s Republic of China (PRC) on December 20, 1999.  Macau’s status since reverting to Chinese sovereignty is defined in the Sino-Portuguese Joint Declaration (1987) and the Basic Law.  Under the concept of “one country, two systems” articulated in these documents, Macau enjoys a high degree of autonomy in economic matters, and its economic system is to remain unchanged for 50 years following the 1999 reversion to Chinese sovereignty.  Macau, a separate customs territory, describes itself as a liberal economy and a free port.  Tourism is the basis of the Macau economy.

The Government of Macau (GOM) maintains a transparent, non-discriminatory, and free-market economy.  The GOM is committed to maintaining an investor-friendly environment.  In 2002, the GOM ended a long-standing gaming monopoly, awarding two gaming concessions and one sub-concession to consortia with U.S. interests.  This opening encouraged substantial U.S. investment in casinos and hotels and has spurred rapid economic growth in the tourism, gaming, and entertainment sector, in which the gaming industry constitutes the most important pillar of Macau economy.  In 2021, GOM levied US$4.22 billion on the gross gaming revenue of casinos and comprised 67.2 percent of all government revenue collected in 2021, an increase of 13.8 percent when compared to 2020 payments.

Macau is today the biggest gaming center in the world, having far surpassed Las Vegas in gambling revenue.  However, Macau has been hit worse by the pandemic than Las Vegas as inbound travel restrictions mandated by the GOM throughout 2020 to 2021 drastically reduced the number of travelers from mainland China, who account for the vast majority of Macau’s tourists entering Macau.  Macau’s major casino rival in the world - Nevada, where famous Las Vegas Strip locates, closed out 2021 with an all-time high of more than US$13.4 billion in pre-tax gaming incomes despite plagued by the pandemic for a spell.  On the contrary, Macau ended 2021 with US$10.82 billion in pre-tax gaming revenue, up 43.7 percent from 2020 figures but still a 70.3 percent decline from 2019 when casinos generated US$36.5 billion in gaming revenues,  

Although business remains below average in the casinos of Macau more than two years into the COVID-19 pandemic, all six gaming concessionaires will see their gaming licenses expire on December 31, 2022, after authorities extended the original expiration date of June 26, 2022, by six months.  The first step to the retendering is a modified draft bill following completion of Macau gaming law public consultation, which the GOM had published a summary paper of the 45-day public consultation in December 2021to ease investors’ concerns and provide legislators with reference materials.  The modified draft bill is now under a Legislative Assembly committee’s review and a final draft bill will be subsequently sent to the plenary for deliberation and vote, a new public re-tender process will then follow after the legislative process.  The GOM aims to complete all the required legislative and re-tender processes by 2022, according to local press reporting.

A major shake-up is also occurring in the VIP gaming space as five of all six Macau’s casino concessionaires had terminated their contracts with junket partners in a move that put an end to the long-running opaque junket system within short space of time, after Alvin Chau and Levo Chan, two of the biggest names in the junket industry„ were arrested by Macau police over their alleged links with illegal cross-border gambling and money laundering syndicate.  Junkets are third party brokers that lure high net worth Mainland bettors to Macau through VIP services such as loans, luxury accommodations, and private gaming spaces.  The city’s gambling watchdog Gaming Inspection and Coordination Bureau has also issued an order on December 7, 2021, to mandate all junket operators to stop providing loan services to VIP gamblers, a move which is tantamount to cutting off a major source of income for junket operators. 

Separate from the gaming law amendment bill already going through the Legislative Assembly, a new bill governing Macau’s junkets and satellite casinos passed its first reading after being handed over to the Legislative Assembly in April 2022.  Both are casino contracted by a gaming concessionaire to an unlicensed third-party company and are often involved in illegally sucking in public deposits, loan sharking, and money laundering.  Before the regulatory overhaul, the GOM had turned a blind eye to them for years because they are a decisive medium to attract VIP gamblers to the city.  Under the new law, junkets and satellite casinos will face stricter licensing terms and regulatory requirements, which includes a minimum capital requirement for each entity of US$1.25 million in cash and a 1.25 percent maximum limit of commissions earned by each entity. 

The wide-ranging crackdown on junkets and satellite casinos deals a severe blow to the already-declining VIP gaming sector and marginally affects the whole city’s gaming sector in the short term, as investors and gamblers may assess the sudden uptick in scrutiny of operation of these entities as a signal of a potentially boarder clampdown on gambling activities within the territory. U.S. investment over the past decade is estimated to have exceeded US$23.8 billion.  In addition to gaming, Macau aspires to position itself as a regional center for incentive travel, conventions, and tourism, though to date it has experienced limited success in diversifying its economy.  In 2007, business leaders founded the American Chamber of Commerce of Macau.

Macau also seeks to become a “commercial and trade cooperation service platform” between mainland China and Portuguese-speaking countries.  The GOM has various policies to promote these efforts and to create business opportunities for domestic and foreign investors.  Many infrastructure projects are currently underway, such as airport extension, the Macau-Taipa 4th vehicular harbor crossing that started construction in August 2020, and the construction of light rail tracks.

Complete 2022 Macau Investment Climate Statement.