Accountant and business consultant F.I Iwasawa encourages Japanese investors to take full advantage of what Hong Kong has to offer

Hong Kong is one of the best places in the world to do business, according to a Japanese service provider who has his own accounting practice and business consultancy in Hong Kong.

For the past 16 years, F.I Iwasawa, founder and managing director of Asahi Iwasawa & Associates, has advised his clients - who are 100 per cent Japanese investors ranging from multinational corporations (MNCs) to small and medium-sized enterprises (SMEs) - on capitalising opportunities in the Chinese mainland. 

As the mainland opens up more to foreign investors, Japanese companies have invested heavily in China, locating factories in southern China's Pearl River Delta (PRD), Shanghai, Beijing and Dalian to name a few.

Mr Iwasawa, a US trained Certified Public Accountant (CPA) who has been living in Hong Kong for over 20 years, says he's assisting Japanese investors to take full advantage of what Hong Kong has to offer in the PRD and the mainland.

SME specialist

His accounting firm, he says, is the "only Japanese firm in Hong Kong providing full scale in-house accounting services for Japanese clients, mostly SMEs", thereby filling a niche market.

"People who truly need my services are from SMEs. Their main concerns are in manufacturing and marketing and they neglect much in administrative and accounting areas - so our services are appreciated by their Japan headquarters.

"My firm plays a big role in auditing and taxation in the language that these investors understand - Japanese. They want me to communicate directly with their headquarters in Japan. Accounting laws differ between Hong Kong and Japan and SME management often lacks knowledge of auditing standards, so they are happy for me to deal with them," Mr Iwasawa said.

Many Japanese SMEs are compelled to come to Hong Kong as big names like Mitsubishi, Mitsui, Toyota, Honda and Sony have a strong presence here. When the giant companies expand overseas, many related and affiliated firms follow suit. As of June 2004, Japan has 198 regional headquarters and 515 regional offices in Hong Kong.

Robust economy a drawcard

Mr Iwasaw pinpoints the "four pillars" contributing to Hong Kong's robust economy and its attraction as a regional hub for many overseas companies. 

"Hong Kong is a tax haven with low corporate taxes, a laissez faire government that is efficient and transparent, a free port and complete freedom and control of foreign exchange. Add in a capable workforce, excellent infrastructure and facilities, and you have a business centre in Asia that is the gateway to the Orient."

He tells his clients look out for two risks - political and exchange - when investing in any place.

"Hong Kong has a small, efficient government. The rule of law is well defined here. Hong Kong complies with international accounting standards - some countries simply do not. Hong Kong is pegged to the US dollar in the way that Japan is not. For investors to spend so much money and yet have a high income tax - this scenario simply does not happen in Hong Kong, and once they get to understand taxation ordinances here, they truly appreciate what Hong Kong has to offer. I want to play a role as a bridge between the two economies," added Mr Iwasawa.