As a key financial hub of Asia, Hong Kong is an important data centre market. With ‘open door’ investment and foreign exchange policies, it stands out as a dynamic centre for technological advancement and investment.
To explore settings in other jurisdictions across APAC visit our APAC Regulatory Guide.
Sources: Worldometer, Statista, Cushman Wakefield, Cushman & Wakefield
The Hong Kong Government continues to support technology innovation. It has made special development zones available to technology sector players.
Ongoing changes to the US export controls no doubt cast a shadow over the data centre and technology sector in Hong Kong, and it remains to be seen how it will navigate through these uncertainties. That challenge aside, the robust regulatory environment, with its favourable conditions for capital flow and minimal foreign investment restrictions, bolster confidence in Hong Kong’s data centre market.
Spotlight on key drivers
Ease of capital flows
Hong Kong has always been known for its hands-off ‘laissez-faire’ economic policies. This creates a free market encouraging businesses to thrive.
With no FDI restrictions, foreign exchange or capital flow restrictions and a stable USD-pegged currency, Hong Kong provides an open market for new data centre investments.
Government support
The Hong Kong Government continues to support innovation in the technology sector.
There are a number of special development zones (such as the Hong Kong Science and Technology Park and Hong Kong-Shenzhen Innovation and Technology Park) dedicated to fostering start-ups and innovation in the technology industry. They provide friendly ecosystems which may bring various commercial opportunities to various technology sector players, which may drive the demand for data centre capacity.
US export controls
US export controls continue to limit Hong Kong’s access to advanced AI chips and technologies, with clear flow on effects for data centre development.
Although the recent rescission of the AI diffusion rule provided some regulatory relief, core hardware-related restrictions remain and are expected to persist. While these controls limit developers’ and operators’ abilities to source and deploy high-performance computing infrastructure, they also create opportunities for local companies to advance domestic chip development and explore alternative technologies to meet growing data centre demand.
'Hong Kong is a leading destination for data centres in Aisa, thank to its unrivalled connectivity, reliable power and water access, transparent regulatory framework and attractive financing options. Its strategic location and strong business ecosystem offer unique opporutnieis for clients looking to expand or future-proof their data centre operations in the region.'
KWM Partner Scott Gardiner
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