Why is Hong Kong good for business?
30 October, 2020
Have you ever thought about all the benefits of establishing a new business in Hong Kong? Why are entrepreneurs particularly enthusiastic about setting up their business over here? What is it that makes Hong Kong an appealing and attractive place for startups?
When considering Hong Kong as a commercial port, many associations come to mind like a shopping paradise, free economy, rich culture, diverse people, and temple street nights. But there are key elements that make Hong Kong one of the best places to set up a business venture. Being a cosmopolitan and sophisticated city, mingled with the cultures of Asia and Europe, Hong Kong attracts a lot of investors and business people across the globe annually.
The prestige, etiquette, wealth, reputation, and education reflect many positive impressions for the business founders. However, this city displays similar significant d the company. Below shared are some compelling reasons why.
World's Top Economy with Higher Freedom
The first and foremost reason for setting up your business in Hong Kong is its world-class economy. InvestHK is a special department in the HKSAR government responsible for foreign direct investment and supports all overseas businesses in set-up and expansion. Hong Kong's trade offices are conveniently located in top cities characteristics related to Hong Kong, with some starkly different opportunities. The formula of one country, two systems, serve as strong roots in this city-state.
Let's cut to the chase, there are many reasons why Hong Kong is an excellent place for business founders to get started or expanaround the world: London, San Francisco, Berlin, Washington, Geneva, Tokyo, Sydney, and New York, and various cities in Mainland China.
Moreover, the Hong Kong administration announces excellent plans for new business operators. A bonus is there is a short waiting time to set up a business in the city and be in operating mode. Thus, businesses can swiftly grow at ease without being stuck in a logistical nightmare.
Many programs are initiated by the government to specifically help you scale the business, such as offering loan guarantees and marketing funds to startups, incubators, and accelerators The government strives hard to incentivize all foreigners and local residents alike to set up their business here.
Easier To Get Started In Various Sectors
World-class logistics infrastructure, limited excise duties, liberal economic system, and no trade barriers for employers and employees are the advantages of Hong Kong. As per the research, Hong Kong has been nominated as 1st regionally and 3rd globally, with a score of 85.3 among 190 economies. Below shared are freedom scores for new entrepreneurs that you should be aware of:
- Trade freedom 90.0
- Property rights 90.0
- Financial freedom 90.0
- Business freedom 97.4
- Monetary freedom 81.8
- Investment freedom 90.0
Transparent legal environment, administrative efficiency, open markets, and secured property rights are considered key pillars behind the growing and supportive HK economy.
Support from the Government To Do Business in Hong Kong
The second supportive reason for doing business in Hong Kong is the level of operational and financial support from the HK government for newly established businesses. In Hong Kong, foreign entrepreneurs can easily set up their business without any legal problems. Whether you are a resident of HK, or Singapore, or any other part of the world, you can start your business in this city with little to no hassle. InvestHK is a government-run department in the HK SAR that dedicates to helping offshore and local business founders to establish their business.
Another supporting reason is its simple and straightforward company formation procedure. Businesses can be set up with minimal company formation and incorporation charges. This is the main reason why Hong Kong has attracted 2,000 startups so far. A recent study on startups reveals the breakout by sector:
- Financial technology 6%
- Professional services 9.5%
- Design 8.65%
- Hardware 14%
- Healthcare 3%
- E-commerce 10%
- Data analysis 2.79%
- Education and learning 7.26%
- Information and technology 19%
More importantly, to establish a new business, you won't require a conventional office. You can set it up by using a virtual address from a company secretary provider like Startupr, who can do so while abiding by all local regulations. Language is not a problem, as Hong Kong is a bi-lingual city-state with deep colonial roots in the UK, with English and Cantonese as its main languages are spoken. It is critical for entrepreneurs and business leaders to understand and adhere to the rules within the workplace. Brush up on your business etiquette before starting work in Hong Kong to avoid trouble.
A Tax-Friendly Tax Regime
Hong Kong follows a territorial taxation system which means that only derived income within the borders of Hong Kong will be subject to taxes. Offshore business transactions are not liable to pay taxes. In Hong Kong, the profit tax is charged at 16.5%, 15% on property tax, and 15% on salaries tax. This city is nominated as one of the best places with low-taxation rates to start your business.
The business-friendly environment and free economy make this city-state reliable and attractive for all entrepreneurs and business leaders The World Economic Forum consistently ranks Hong Kong in the top 5 in competitiveness for its great policies and institutions that continue to support economic freedom. Another example of why HK provides a strong structural foundation for startups is that it doesn't impose withholding or corporate taxes.
The business culture of Hong Kong is dominated mostly by Hong Kong culture; that's why Cantonese Chinese is the most commonly used dialect. Mandarin Chinese is fast becoming a common dialect, joining English and Cantonese Chinese as most used in the city.
The Chinese Lunar New Year is a major public holiday in Hong Kong. Others are considered traditional Chinese holidays such as the Mid-Autumn Festival, Ching Ming Festival (Qingming), Dragon Boat Festival, Chung Yeung Festival, and Buddha's Day.
This article is about all the compelling reasons why Hong Kong is every entrepreneur's fantasy business world. These reasons will help you make up your mind when setting up a new startup in one of the most liberal economic systems in the world. Hong Kong's business culture will help you prepare yourself and your business, especially when it comes to language so that you can operate here without any hassle. I hope this article has cleared all the doubts you may be facing when deciding whether HK is suitable for startups or not. Good luck in opening new avenues for your business!
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