Starting a Business in Hong Kong
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Why Start A Business In Hong Kong?
Hong Kong is officially named Hong Kong Special Administrative Region of the People's Republic of China. It all sounds terribly efficient, but that's socialism for you. Although inherently linked to China, Hong Kong is one of those many places where East proverbially meets West, a synergy of ethnicity and foreign practice. And even though the name may sound like an industrial park, things really aren't that bland. In fact, Hong Kong is quite the fascinating proposition.
Hong Kong operates under the principle of 'one country, two systems', which gives the city a high level of autonomy. Its government is responsible for factors such as its own legal system, police force, customs and immigrations policies. It varies greatly from the legal system maintained in Mainland China. It is primarily still based on the English common law.
Cantonese is the official language of Hong Kong, and English is also an official language, being spoken by one-third of the population. Hong Kong is a popular tourist destination, and its economy is one of the worlds most open. The reasons for its successful economy include an excellent banking system, nearly no public debt, a solid legal system, and an anti-corruption regime that has been effectively imposed. Hong Kong continues to aim to improve its trading and commercial appeal, particularly after China's entry into the World Trade Organisation (WTO).
Many American companies regard Hong Kong's business system highly, particularly its legal system, low taxation, and infrastructure. Hong Kong belongs to the World Trade Organisation and is also a member of the Asia Pacific Economic Cooperation (APEC). APEC is the leading forum for facilitating economic growth, cooperation, trade and investment in the Asia-Pacific region.
What's the population?
The population of Hong Kong is 7.35 million
In the past twenty years, Hong Kong's economy has successfully doubled in size, with GDP growth at an average annual rate of 5% in real terms.
The government plays an important role in Hong Kong's development as a growing business economy. The "big market, small government" strategy which exists in the country means that the state has limited power, and that individual rights are protected. In the last two decades, Hong Kong has seen a change in GDP constituents. Services contributed to 69% of the GDP, and 30% was manufacturing, but today, around 90% of the GDP is services and around 10% is manufacturing. This demonstrates the extent to which Hong Kong and its residents have been capable of adapting and recreating. Hong Kong has started to embrace management, finance, marketing, trade, and tourism which are vital elements to the success of the country's economy, comprising the majority of GDP and employment.
In terms of trade, Hong Kong is very successful. Hong Kong's total trade is approximately split halfway between imports and exports, and its dominant markets are China and the U.S. Interestingly, Hong Kong handles more than 20% of China's foreign trade.
Associations such as Invest Hong Kong, the Hong Kong Trade Development Council and the Hong Kong Productivity Council are crucial to the economy as they assist the Hong Kong business trade, helping the country to remain competitive in the world market. The Hong Kong General Chamber of Commerce is an additional body that plays an important part in this. It is a leader in the promotion and support of business interests and integrity. It is one of the largest voluntary chambers in the world.
According to the United Nations' latest World Investment Report, foreign investment has grown in Hong Kong, which resulted in it being second largest recipient of foreign investment in Asia, after China, and the 6th largest recipient in the world.
In the same report, Hong Kong also received recognition for being one of the primary locations in the 'Inward FDI Performance Index'. This benchmark ranks countries by their ability to attract inward foreign direct investment. Hong Kong was ranked third in the global rankings. Hong Kong was ranked 15th for 'Inward FDI Potential Index' and was acknowledged favourably as being a 'front-runner' economy. This essentially means that the city surpassed its investment potential, as it has attracted high FDI (foreign direct investment) influx compared to its economic size.
The following website provides excellent information on key trade statistics in Hong Kong, provided by the Trade and Industry Department:
This website also offers information about key current economic and social indicators in the country:
Websites for Invest Hong Kong, the Hong Kong Trade Development Council (1), the Hong Kong Productivity Council (2) and The Hong Kong General Chamber of Commerce (3) which provide useful information are below:
For those wanting to invest in Hong Kong, there is a strong UK community, which continues to flourish. Hong Kong forms a large part of the UK's foreign investment. Investments total around US$6.1 billion.
A range of industries have invested in Hong Kong, including technology, telecommunications, engineering and construction. In terms of business, British financial companies, insurance companies, law firms, accountants, consultants and surveyors are also important industries. There are several British high street brands which have a noticeable presence in Hong Kong. The UK is also Hong Kong's primary European trading partner. Around 20,000 Brits are living in Hong Kong today.
What are the essentials to know?
Important contacts for the British community in Hong Kong
The British Consulate deals with visa and passport enquiries. Their teams aim to bring together British and Hong Kong businesses. They offer advice and provide help to British nations in the event of emergency situations.
The British Consulate in Hong Kong
1 Supreme Court Road
PO Box 528
Main switchboard: (852) 2901 3000
UK Trade and Investment (852) 2901 3182
Press & Public Affairs(852) 2901 3277
Consular (852) 2901 3281
Visa From HK: 800 938 671
From elsewhere: +86 21 3882 4727
Passports(852) 2901 3222
Management(852) 2901 3000
Out of hours Consular Emergency Service (852) 2901 3000
E-mail: email@example.com (UK Trade and Investment)
Opening hours (excluding public holidays):
Passport services, Level 3 (entrance on Justice Drive). Mon to Fri, 08.30-13.30 for applications and 08.30-16.00 for collections
Consular services, Level 3 (entrance on Justice Drive). Mon to Fri, 09.00-15.00 for personal callers,Mon to Thur, 09.00-16.30 and Fri, 09.00-16.15 for telephone enquiries
Visa services, Level 2 (entrance on Justice Drive). Mon to Fri, 08.45-11.00 for applications and 15.30-16.30 for collections
Business Centre, Floor 6 (entrance on Supreme Court Road). Mon to Fri, 09.00-12.00 and 14.00-17.00
The British Chamber of Commerce is an organisation established to represent the "business interests of its members both in Hong Kong, Mainland China and the Asia Pacific Region."
The British Chamber of Commerce in Hong Kong
Emperor Group Centre
288 Hennessy Road
Main Phone: +852 2824 2211
Main Fax:+852 2824 1333
The British Council is the UK's international association for educational opportunities. They are a charity registered in England and they work towards establishing mutually beneficial relationships between people from Hong Kong and the UK, by providing a wide range of education services.
3 Supreme Court Road
Telephone: +852 913 5100
Fax:+852 913 5102
Customer services centre opening hours: Monday-Friday 9.00am - 8.00pm, Saturday 9.00am - 6.00pm, Sundays and Public Holidays closed.
English is the most widely used language in business in Hong Kong, and many locals speak Cantonese and Mandarin.
Once you have moved to Hong Kong permanently, it is essential to purchase a Hong Kong Identity Card, within 30 days of arrival. It is a legal requirement of the country, and you must carry it with you at all times. You can obtain this card, free of charge, by filling out an application form on the Immigration Department website; http://www.immd.gov.hk/index.html which also summarises the documents you will need to present in person. The card will be available to collect within 10 days of the application.
The widely-respected Independent Commission Against Corruption (ICAC) in Hong Kong aims to prevent, educate and investigate corruption within Hong Kong, adhering to the state's zero-tolerance policy on corruption. With Government and community support, Hong Kong is now among the least corrupt places in the world, rating above the US and Japan.
Organisations that can assist with Starting a Business
Simplified Global Payroll Companies with global employees often find that managing payroll in multiple countries is complicated - different systems, laws, and languages in each country, lack of reporting, and constantly changing laws and regulations each year. Trying to manage global payroll via fax and email with excel spreadsheets leads to data security issues, fines, and penalties for non-compliance. Blue Marble has solved global payroll challenges with cloud-based technology, aggregated reporting, and a hybrid service model in 135+ countries around the world.
More Group is an international accounting firm specialising in tax accounting, business incorporation, and trustee services. Contact us today to book your free initial consultation.
KPC is a professional business services provider in Hong Kong. We provide high quality one stop services, including harbor-view serviced office, company formation (Hong Kong, China & Overseas) service, virtual offices services, accounting & taxation services, visas application, trademark registration, logistics solutions and IT developments services, to a wide variety of clients all over the world.
GTP cross cultural trainings and intercultural workshops help global companies in improving their communication, efficiency and profitability when doing business across cultures.
Sovereign offers a range of advisory and support services to assist companies of all sizes to establish successful business operations in foreign markets.
PEO Worldwide is an international PEO offering employer of record, payroll, employee benefits management, HR and compliance services throughout the world.
Finding office space abroad poses one of the most difficult changes that many start-ups face. Location, costs, and transport all need to be considered. And, more crucially of all, what office will allow a new business to attract and retain the best staff?