Good Essay About Economic Freedom Report
Economic Freedom Report
I would opt to establish a subsidiary company in Hong Kong since it has the highest rating on the economic freedom report with a score of 89.6. In addition to this Hong Kong has maintained consistency in the ratings since the inception of the Heritage Foundation Economic Report in the last twenty years.
One of the factors that make Hong Kong an ideal place to establish a subsidiary company is the degree of financial freedom and stability. The government has simple tax policies that have reduced the levels of taxation in the country. These policies encourage business innovation and operations in the country thus maximizing business activities. Additionally, the government has very few business limitations. For instance, the government encourages market liberalization, and foreign businesses can access the local market and even transfer capital without much trouble. In fact, the government does not control business exchanges in the market (Luo, 2014). Thus, the country has an active foreign exchange market because the government encourages business operations and foreign exchange. According to a triennial global survey, Hong Kong is among the countries with the largest level of market turnovers in the foreign exchange market. In fact, the country is position six on the list.
The government of Hong Kong firmly upholds the rule of law ensuring political stability that provides a safe environment for growth of a company. There is also state of the art infrastructure with sophisticated support services. This makes it simpler for the company to access raw materials and to provide social amenities to its staff. The level of corruption is so low ensuring transparency hence promoting a healthy spirit of competition between the company and its competitors. This is because it assures all the companies of a level playing field. Lastly, Hong Kong also provides a relatively high amount of freedom in relation to property rights. It is easy for individuals to accumulate private property that is secured by clear laws fully enforced by the state.
Luo, Y. (2014). Economic Freedom, Financial Crisis and Stock Volatilities in Emerging Markets. International Journal of Financial Management, 4(1), 1-10.