The Hong Kong Market Entry Playbook: The legal foundations

Hong Kong has a long history of being a business-friendly location to set up both as a regional business hub and to access the sophisticated local market. In the first of a series of articles exploring the attraction of Hong Kong as a regional and international business centre, Pádraig Walsh of Tanner De Witt explains the special characteristics of the system of government and law in Hong Kong.

Government

Hong Kong is an autonomous Special Administrative Region (SAR) of the People’s Republic of China. The Basic Law is the mini constitution of Hong Kong that sets outs the political status of Hong Kong, and individual rights of persons in Hong Kong. The Basic Law guarantees Hong Kong a high degree of autonomy until 2047.

Hong Kong is led by the Chief Executive. The Chief Executive is advised on major policy decisions by the Executive Council.

Hong Kong has a two-tier system of representative government. At the central level is the Legislative Council which legislates, approves public expenditure and monitors the performance of the administration. At the district level, 18 district councils advise on the implementation of policies in their respective areas.

The administration, being the executive arm of the government, is organised into the government secretariat and departments. The government secretariat bureaux formulate policies and initiate legislative proposals. Departments implement laws and policies and provide direct services to the community.

Legal system

The legal system of Hong Kong is based on the rule of law and the independence of the judiciary. Under the principle of ‘one country, two systems’, the Hong Kong legal system is different from that of Mainland China, and is based on the common law supplemented by statutes.

All legislation in force in Hong Kong is accessible on the internet. The laws in force in Hong Kong include:

(a) the Basic Law;

(b) national laws listed in Annex III to the Basic Law as applied to Hong Kong (relating to defence, foreign affairs and similar matters);

(c) the laws (including common law and rules of equity) in force before 1 July 1997, as developed by the Courts of Hong Kong since then; and

(d) laws enacted by the Legislative Council.

Judiciary

Under the Basic Law, Hong Kong has been authorised by the National People’s Congress to exercise independent judicial power, including the power of final adjudication. The courts of Hong Kong exercise judicial power independently, free from interference. Members of the judiciary are immune from legal action in the performance of their judicial functions. Judges are constitutionally required to determine and handle cases strictly in accordance with the law and legal principles.

The courts of justice in Hong Kong comprise the Court of Final Appeal, the High Court (which includes the Court of Appeal and the Court of First Instance), the Competition Tribunal, the District Court (which includes the Family Court), the Lands Tribunal, the Magistrates’ Courts (which include the Juvenile Court), the Coroner’s Court, the Labour Tribunal, the Small Claims Tribunal and the Obscene Articles Tribunal.

Pádraig Walsh

* This article is an expanded version of our contribution to the iTech Law global publication “Startup Legal Playbook”, which can be accessed on this link.

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Disclaimer: This publication is general in nature and is not intended to constitute legal advice. You should seek professional advice before taking any action in relation to the matters dealt with in this publication. This article was last updated on 29 January 2024.