The government intervenes for the social purposes of ensuring good minimum standards of service in these key areas, and ensuring that they are available to the entire relevant population. Despite the areas of intervention, the prevailing ethos can be seen in the fact that significant infrastructure projects in the territory are developed, financed, built and operated by the private sector and by the fact that the Hong Kong government does not even issue its own currency. Instead it leaves that task to several note-issuing banks which issue notes against reserve accounts kept with the Hong Kong Monetary Authority. Tax policies are an important source of advantage for local and overseas firms operating in Hong Kong. Hong Kong maintains a simple tax structure with low corporate and personal rates to promote productive labour and investment.
Tax policies are business-friendly to a degree matched by few other nations.
According to the 1996 IMD World Competitiveness Yearbook, Hong Kong's fiscal policy is the most favourable to entrepreneurial activity of any fiscal policy in the world, and Hong Kong's personal taxes rank first in the world in encouraging individual work initiative. The result of the various policy elements is that Hong Kong's private sector has taken the leadership role in business and economic development. The territory's open economy exposes its traders and industrial producers to intense international competition, which forces Hong Kong industry to innovate and improve its products or exit. The lack of protectionist barriers in the trading sector also fosters the formation of new firms. Hong Kong's investment regime also is open and transparent, and inward and outward capital flows are free from special regulation and restriction.