For business and lifestyle reasons, Dr Michael Thomas says Hong Kong is a place he never wants to leave

During his career as an international banker, Dr Michael Thomas lived in many countries outside of his native Germany. After being posted to Hong Kong, however, he discovered a place he never wanted to leave. Rather than accept another posting, Dr Thomas left the bank in 1992 and drew on his financial experience to form Deutsche Consult (Asia) Ltd, a company comprised of bankers, lawyers and accountants focused on the incorporation and day-to-day management of Hong Kong companies. Today, heading up a company with a share capital of HK$10 million (US$1.28 million), he explains why it was a decision he will never regret - and why Hong Kong remains one of the great finance and trade hubs of the world.

"Having come to Hong Kong (from Taiwan) in February, 1989 as general manager of Deutsche Bank, Hong Kong branch, and also responsible for the bank's China and Macau operations, I immediately fell in love with the place. In late 1991, just over a year after German reunification, the bank wanted to transfer me to the port city of Rostock, hub of the former East German merchant navy and fishing fleet - not to mention military hardware. All those ships were then on the auction block, and everyone was hopefully looking to China as a potential buyer.

With my wife being from Taiwan, and me by then deep into my forties, we made the decision to settle down, and that Hong Kong was to be our home. It is a decision we have never regretted and would make again any day.

I was tired of being a latter-day gypsy, and set about putting all those companies in Germany and Europe, who knew and trusted me from my banking days, to good use. It took 18 months to have a large enough client base and a strong professional team to justify the formation of our company.

After such a long gestation, Deutsche Consult (Asia) was born on February 8, 1994. Whereas there are thousands of accountants and solicitors who sell Hong Kong companies to any willing buyer, we are different mainly in two ways.

Firstly, we want to know our customers. A stranger cannot just buy a company from us through the mail, unless his identity is firmly established. We also routinely ask for references.

Secondly, we do not just offer our (mainly corporate) clients a letter box with a hundred or so names on it, but a reputable address with dedicated phone, fax and email. We take care of the day-to-day operations of their business, handle import/export transactions, bank accounts and the like, at a fraction of what a stand-alone business would cost. While our clients here in Hong Kong are mostly from Europe and Taiwan, we are now also offering similar services to Chinese clients in Germany.

Platform for foreign investors

Hong Kong plays a pivotal role as a platform for foreign investors looking to do business in the Chinese mainland. Overseas businesses want to grab their part of the China pie and structure that business in a tax efficient manner. Whether it is imports to or exports from China, Chinese vendors would much rather deal with someone who has an office in nearby Hong Kong, which is in the same time zone, and where people can converse in their language.

Furthermore, Hong Kong's moderate tax regime and a profits tax of only 16 per cent allows for structures where the Hong Kong company as an in-between makes a fair share of the profit, which is then only subject to local taxes (or, where the income was generated offshore, even none at all).

Hong Kong's status as one of the world's hubs for finance and trade did not come overnight, but it was hard earned. A business friendly government with an efficient, non-corrupt and bilingual administration and judiciary right at China's doorstep; an infrastructure to match any other world city (and the envy of some); hard working and well educated people with a keen sense for business and 'can do' spirit who, due to a low fiscal regime, do not just work for the taxman but can earn what they keep - that's what Hong Kong is about.

As real estate prices, rents, cost of living and salary levels come down to earth again, I believe things can only get better. Much of Hong Kong's miraculous success is built on its laissez-faire government and low taxes. Businessmen know business, and paper-pushers do not. Where the taxman dips too deeply into the pockets of business, it goes elsewhere. Some 500,000 companies call Hong Kong home, because Hong Kong lets the market find its own level. That's what makes a market economy."

Related links:
Deutsche Bank www.db.com
Deutsche Consult www.deutsche-consult.com