I think it used to be like this, you get a tenancy contract for 2 years, then some tenant wanted the flexibility so they added in a tenant side option allowing them to break the tenancy after 1 year by giving 2 mths notice. Then the legistration decided to make this option mutual, i.e. both sides can exercise the option, to make it fair to the landlord.
Its all subject to negotiation. If you are sure you will stay for 2 years, then you can insist you do not want the option, and depending on your bargaining power, you probably can get it. But that would also mean you cannot get out of the tenancy contract even if you decide to leave hk.
On the other hand, even with the break option and the landlord decides to exercise it, if you chooses to play punk and stay put (and continue to pay the rent), the landlord need to go through a long process (6-8mths) to actually evict you.
So in certain sense the tenant has slight upper hand in such contract.
Hence, landlord are also selective. I just signed my tenancy agreement with a landlord that is willing to lower the rental for me because I am a 'low risk foreigner' (which in their terms probably mean someone from japan, korea, maybe singapore, malaysia). He was asking for 2k hkd more if the tenant is a local.
So far I have not heard anyone asking for a company letter to underwrite your rental. It actually stems from the landlord's preference of renting it to a corporate client. I think this part you can probably negotiate yourself out of it. Unless you are asking for a demandingly low rent, then it stands that the landlord wld want the assurance in such cases..