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A shortage of English-language school places in Hong Kong is hurting expatriate families and damaging the city's reputation as a regional business hub, parents and lobby groups say.

The situation is driving some companies to look at alternatives such as Singapore, Bangkok and Shanghai, they say.

International chambers of commerce have united to pressure the semi-autonomous Chinese's territory to wake up to the problem, but say their pleas for action have fallen on deaf ears.

"There is no space and no flexibility for families like ours. It's a big sacrifice on my family's part ... to come to Hong Kong," said a recently arrived American businessman and father-of-two, requesting anonymity.

"All we as parents are concerned with coming to Hong Kong is will any school accept our children? A lot of firms have decided to go to other cities in Asia where school accessibility is easier. Hong Kong is losing out."

Hong Kong had the dubious distinction of making assignment services firm Brookfield Global Relocation's Top 20 list of most challenging destinations for the first time last year, with schooling cited as the major problem.

"This continues to be the number one burning issue that (foreign companies) are facing in growing their businesses out here," in Hong Kong, said Janet de Silva, the American Chamber of Commerce's (AmCham) education affairs group chairwoman.

Immigration department figures show the number of US and UK passport holders issued with Hong Kong employment visas increased 42.48 percent from 2009 to 2011, as more people are drawn to the city as a gateway to the Chinese market.

But the former British colony's English-language schools have struggled to keep up with the demand due to land shortages, red tape and funding problems.

School waiting lists typically contain up to 100 names, and only two state-funded English-language schools had any spare spaces at the start of this year, according to school data and relocation specialists.

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Hong Kong's school place shortage deters expats