Hong Kong is one of those great cities in the world where you feel like anything is possible.
I will never forget the first time I landed in Hong Kong and that first taxi ride to Central (rookie error – Airport Express… I know…). The sheer enormity of what is in front of you. The scale and style of it all, this girl from Sydney was questioning whether she had been transported into the future or a parallel universe.
Over the following few years, I would come to know and love a place where the opportunities are endless. Why do I say that? People in Hong Kong have an insatiable appetite for the latest and greatest. Tax rates are low, and for many disposable incomes are high, this city provides the perfect backdrop to have a crack at something you daydream about or perhaps to bring an already existing concept operating in another location.
Regardless of whether you are in from Old Blighty, got the overnight from Straya, you have left the US of A, or are from any other far flung location, starting a new business in Hong Kong is an exciting proposition. Similar to your home town though there are hoops to jump through and much to consider.
The upside to a successful opportunity in HK is immense, the downside can be brutal. For example, I would need all my fingers and toes to list the number of restaurants that have opened and closed before I even got to try them. Whatever your idea is, you want to give yourself the best chance of success the first time around.
Some of the key things to think about:
- Understand the local legal and compliance requirements to run your business in your sector such as tax, visas, HR, insurance and licenses. Some of the relevant resources are listed here. As you can see there is quite a bit to work through.
- Plan and complete bank account opening process. Sounds simple. At present in HK it is not. Due to increased anti-money laundering and counter terrorism financing rules this is becoming tougher and tougher. In a recent survey by the Hong Kong Institute of Chartered Secretaries, 98% of the respondents thought that companies were having difficulties opening bank accounts, 79% thought there was a serious or somewhat serious problem and 17% of those surveyed pointed out that while they could not open the bank account in Hong Kong, they were able to do so in another jurisdiction with the same bank.[1]
- Get yourself a desk. You will want to put some kind of roots down. Do you want to rent your own space? Or use a co-work space? Rents in Hong Kong are expensive and depending on how long it takes for your business to generate revenue this could have a significant financial impact.
- Organise the systems you need. Be ready with the tools you need. Hong Kong is a big market that your business could grow quicker than you imagine. If they like you, they might really like you. Be pro-active about setting yourself up with a robust integrated software solution from day one. Implementing the right solution from the get go allows you to focus on shaping your core business as it takes off without playing catch up with choosing systems and retrospective implementations.
- Consider the impact on your personal tax situation By starting a business in Hong Kong what impact does that have if you are tax resident elsewhere. Depending on where you are from the answer to this question could be different.
- Network, consider a mentor or a suitable partner. It’s an oldie but a goodie. “it’s not what you know but who you know” and in Hong Kong it’s no different. Many countries have a Chamber of Commerce in HK, in addition there are many formalised business networks in Hong Kong. Some are specific to expats and some locals. It would be highly advantageous to gain access to both types of groups which brings me to my last point…
- Get organized with experts that can help your business with ALL of the above. Engaging professional advisers to aid with all of the above in the most efficient manner possible could be invaluable. People often under-estimate the cost of delays and wrong decisions. An adviser can make an introduction that could set you off on a path to success you never may have found yourself.
The team at Cornerstone Management Group are able to help you work through all of the above. Our management team are Australian born, have Chinese heritage and have professional experience in Australia, the UK and of course Hong Kong. We are able to bridge the gap in translating where you have come from to what you need to know to get operational and be successful in Hong Kong.
Joseph Chaney, Partner at New Narrative Hong Kong said Cornerstone has performed above his expectations “Cornerstone is very easy to work with: the team responds to requests with urgency, and more importantly, displays great patience and understanding”
Written by Natasha Donaldson
[1] The Hong Kong Institute of Chartered Secretaries (HKICS) – Bank Account Opening Survey Report Media Release 8 September 2016
