Businesses representing nearly half the market capitalisation on Hong Kong’s stock exchange are incorporated in either Bermuda or the Cayman Islands.

And experts said that the island’s legal system and regulatory regime were the keys to businesses opting to register their companies in Bermuda.

A Bloomberg News story yesterday drew attention to Hong Kong’s “Bermuda bent” as international focus on offshore domiciles continued in the wake of the Panama Papers revelations.

Greg Wojciechowski, chief executive officer of the Bermuda Stock Exchange, said: “Bermuda has a global reputation as being a well-regulated jurisdiction.

“The rule of law and its international regulatory reputation are major factors.”

And he explained that Bermuda offers easy access to reservoirs of capital in both the United States and the European Union.

Mr Wojciechowski added that the BSX was one of the few offshore jurisdictions to achieve membership of the World Federation of Exchanges.

And he said: “The BSX listing regulations will not permit the listing on the Exchange of shell companies or fixed-income products whose interests are represented by bearer instruments.

“I think that could be useful in further support of the integrity of Bermuda’s commercial platform and how our designed for purpose laws and regulations protect the country, market and its users and are predicated on accepted international standards of transparency and disclosure.”

Philip Barnes, president of Jardine Matheson International Holdings, founded in China, but based in Bermuda since 1984 ahead of the 1997 return of the territory to China, said access to the English legal system was a big factor in the decision to relocate.

Mr Barnes added: “That was a very large part of it — the English law system is very important.”

And he said that the island’s tax system had not played a major part in the 184-year old company’s decision to move its legal home to Bermuda.

A Bloomberg report said that a legal base in Bermuda for Hong Kong companies did not mean they could hide the identity of the owners — especially as companies are listed on the public markets.

And firms listed on the Hang Seng do not avoid taxes on earnings.

Offshore companies listed on the Hong Kong exchange pay an 18.2 per cent average tax rate, while companies domiciled in mainland China pay 22.9 per cent.

Companies registered in Hong Kong and London paid an average of 16.7 per cent over the last five years.

But there are advantages to an offshore domicile for Hong Kong companies — they do not pay stamp duty on share sales made prior to listing or at the initial public offering.

Bloomberg added that stock splits and taking companies private are easier with a legal home offshore.

In addition, Hong Kong was guaranteed status as a special administrative region of still-Communist China under the terms of the handover agreement between Britain and China, but it will revert fully to China in 2047.

Companies that have relocated have said “political stability” was a driver towards offshore registration.