Isn't this for tax reasons? A lot of tax paradises do not allow you to offer your services locally.. Correct me if I'm wrong.
However, in Hong Kong you just pay local taxes on local income (8% I believe), and no taxes on overseas income (although if you're a US citizen it becomes a lot more complex, with Controlled Foreign Corporation rules, etc.).
It's much more likely that he doesn't want to face local legal issues in Hong Kong. i.e. "never sell no crack where you rest at, I don't care if they want an ounce, tell em: bounce".