Businesses in Hong Kong may be moving out amid political uncertainty and massive protests in the city, members of the business community told CNBC.

But one analyst said Hong Kong still holds an advantage over its rivals — its proximity to the mainland.

"The real concern here, which we've seen slight signs of, is that people are moving their companies and their money in greater numbers to Singapore," Tara Joseph, president of the American Chamber of Commerce in Hong Kong, told CNBC's "Squawk Box" on Monday.

Hundreds of thousands of protesters took to the streets of Hong Kong on Sunday to oppose a legal amendment that would allow fugitives to be extradited from the territory to China for trial.

Although the contentious bill was suspended on Saturday, demonstrations continued amid calls for Chief Executive Carrie Lam to step down and withdraw the proposal completely.

In a press conference on Tuesday, Lam apologized and said she and her team would "try (their) very best" in the next three years of her term. The bill remains indefinitely suspended, with Lam saying the government "will not proceed again with this legislative exercise" if the people's concerns have not been allayed.

The government has argued that the law is needed to close a legal "gap," but many are concerned that Hong Kong's freedoms may be threatened if the bill is passed.