How to Set Up Your Company in Hong Kong

Posted on Posted in Business

Today I would like to write about how to set up a new limited company in Hong Kong. In this post every time I refer to a limit company, I am referring to a company limited by shares and not by guarantee.

There are basically two routes you can take to establishing your business.

A. Hiring a company to do it for you

meeting-room

If you do not have the time to research and prepare all the documents that are required to set up a business in Hong Kong, the best route is to hire a company to do it for you. There are many reputable companies that can take care of this for you for a fee. The price greatly varies depending on the company but you can find service providers that charge a fee starting at somewhere around 1,000 HKD with a lead-time of 12 business days. At this price-point it is definitely inexpensive and something you should consider if you don’t have time or would rather not get into the details. Please take note that the 1,000 HKD here is only for their service fee. This does not include the other administrative and registration costs for setting up a business which I will cover later. Make sure you ask your agent what is included in the price and if there are extra costs that you must bear.

B. Doing it yourself

I decided to go with this route because I was curious to know how to do it on my own, how hard it is, and how long it actually takes.

forms

Here are the steps I went through.

 

Step 1:

Choose a name for your business and make sure that it hasn’t been taken already. You can go to the Cyber Search Centre’s website to check the status on the business name. There are also special guidelines on what is or is not permitted as a business name. Instead of me listing all the rules, here is a link to the source which will always be up to date.

 

Step 2:

Hand in the following documents either electronically through the e-registry or as a hard copy in person at the 14th floor of the Queensway Government Offices.

  • Form NNC1 (Incorporation Form)
  • The company’s Articles of Association (Samples available online)
  • Form IRBR1 (Notice to Business Registration Office)

 

Step 3:

Pay the application fee when delivering the documents mentioned in Step 2.

 

Step 4:

Pick up or download the Certificate of Incorporation and Business Registration Certificate.

 

Fees: Here are the fees you should expect to pay for incorporation.

Registration of Company having a share capital:

1,720 HKD

 

Business Registration Certificate

1-year certificate:

On or after 1 April 2016: 0 HKD (Fee) + 250 HKD (Levy) = 250 HD (total)

3-year certificate:

On or after 1 April 2016: 3,200 HKD (Fee) + 750 HKD (Levy) = 3,950 HKD (total)

 

Guidelines and prices may change so I advise you to visit the below website for the latest and most accurate information:

http://www.cr.gov.hk/en/public/services.htm

You can find all forms, samples, fee schedules, and supplementary information at the above.

 

So… This is basically it. Pretty straight forward and my certificate was done in about 5 business days. Significantly faster than the service I mentioned at the first part of this post. Is it worth paying 1,000+ HKD for someone else to do it for you? Maybe, but personally I would just do it on my own.

 

In our next post I plan to go into what to do after you set up your business.

 

The Four Key Industries in Hong Kong

Posted on Posted in Business

This post will be a relatively short one but we will be covering what the thriving industries and businesses here in Hong Kong are.

According to the Census and Statistical Department of Hong Kong, the below are the four key industries (or pillars) in this country in order from largest to smallest:

  • Trading and Logistics
  • Financial Services
  • Professional and producer services
  • Tourism

 

You have probably noticed that manufacturing is missing from this list. Hong Kong once had a thriving manufacturing industry; however, most manufacturing has been replaced by the service industry due to a few reasons. With the limited amount of land in Hong Kong, land prices have shot up as the economy grew, forcing manufacturers to move their operations to areas where land/rent is cheaper (China, etc.).

Trading and logistics has grown drastically thanks to the country’s almost free port trade.

Hong Kong has turned into an international finance center, earning its place as a well-established finance market partly due to its low taxation, which attracts a lot of foreign capital and investment.

The third largest industry mentioned above is the “Professional and Producer Services”; which may lead you to the question. What in the world does this include? To give you an example, some of the following are included:

  • Architecture and engineering activities
  • Information technology and advertising
  • Legal, accounting, and auditing services

Lastly, the fourth largest industry/market in Hong Kong is Tourism. In 2015, Hong Kong has attracted over 59 million visitors. Here are just some of the reasons Hong Kong is a tourist magnet:

  • It has a diverse culture
  • You can get around with English
  • Wide array of cuisine from all over the world
  • No sales tax + low import duty on many things = Great for shopping
  • Convenient transportation
  • It’s very safe

If you are thinking to start your business in any of these four industries, you can be sure that there is a demand for it; however, be prepared for some competition.

In some of our future posts we will make some advices on how you can make your business stand out from the crowd.

 

What is Hong Kong Like (Business Culture)?

Posted on Posted in Business, Sales and Marketing, Uncategorized

In our last post, we wrote about a general overview of Hong Kong. Next, we want to go a little bit deeper into the business culture of HK.

 

Dress Code

Hong Kong can get extraordinarily hot and humid but that doesn’t mean you can dress down at all occasions. Even with the warm climate, formal business attire is expected unless your company or your business partner says otherwise. Generally, IT and fashion industries are more lenient but you should think of them as the exceptions. It is always safe to go with a dark suit, shirt, and tie.

 

Business Etiquette

Like in the west, you can start with a handshake complemented with maybe a bow (not a full one…). Just like in many cultures, approach the most senior person first and then work your way down. Take corporate hierarchy seriously. Also make sure to address the counterpart with their title and surname. You will notice that many Hong Kongers will have a “western” name in addition to their given name to make it easier to remember. Remember to keep your business cards stocked as these are exchanged almost all the time and the lack of one may be misinterpreted as you not wanting to do business with the other party.

 

“Face”

The concept of “face” is exceptionally important in Hong Kong and Chinese culture (as well as other Asian countries like Japan and Korea). An individual’s respect and reputation is dependent on this “face” so confronting or embarrassing someone in public will result in the person “losing face” which will most likely end your business relationship. This must be respected and handled with care.

 

Business Dinners and Lunches

Eating and drinking is a big part of the Hong Kong business culture. It is an important way to communicate with both your colleagues and business partners/clients. The use of chopsticks may be daunting but people will understand if you are unable to use them and the restaurants will most likely stock other utensils as well. It is common to have alcoholic beverages but don’t go overboard. Just use your common sense J

 

Lai see

Lai see is a red packet/envelope containing 20-100 HKD that is given to people you deal with on a regular basis during Chinese New Year. You should use new bills with even numbers.

In our next post, we are thinking to write a little about thriving industries here in Hong Kong. Will keep you posted!

What is Hong Kong Like (Overview)?

Posted on Posted in Business

A Brief Modern History

After its occupation during the first opium war (1839 – 1842), Hong Kong became a UK colony. First the Hong Kong Island was ceased in 1841, then the Kowloon Peninsula in 1860, and finally the New Territories, which was leased to the UK for 99 years in 1960. Later, Hong Kong was occupied by Japan during the second world war and it wasn’t until 1945 that the UK gained back its control over HK. Under an agreement signed between China and UK in 1984, HK became Hong Kong SAR (Special Administrative Region) of the People’s Republic of China and was handed back to China in 1 July 1997. With regards to the handover, China promised a “one country, two systems” scheme and HK is able to enjoy high level of autonomy in all things except foreign and defense matters for the following 50 years… This is somewhat of a sensitive topic at the moment as the local Hong Kongers are slowly but surely feeling the pressures from mainland China in many aspects of their daily lives. That being said, due to the independent executive, legislative, and judiciary powers; Hong Kong was able to build relations with foreign states and international organizations in a wide range of fields on their own without much governance.

Thanks to this, it is people like you and I are able to strive and succeed in the markets here.

hong_kong_map

 

Culture

Hong Kong is a cultural melting pot which is heavily influenced by its Chinese roots and its time under British occupation. This combination makes for a unique culture with its very own identity. This will be a very import part of starting and growing your business. The people of Hong Kong will usually refer and identify themselves as Hong Kongers or Hong Kong Chinese in order to distinguish themselves from the mainland Chinese. In general try not to refer to Hong Kongers as Chinese. You also must understand that things like Feng Shui is nothing to laugh at over here. This can literally make or break a deal depending on who you are dealing with. As for sports, much like my home town, it is also a big part of the culture here. This is also due to the British occupation. Hong Kong has a high level of religious freedom (guaranteed by law); however, the majority (64%) is said to not believe in any type of religion.

 

Food

One cannot talk about Hong Kong without mentioning the food. Whether it’s fast food or some of the world most sought after delicacies; Hong Kong has it all. From local food to fancy western cuisines, anything can be found (both expensive and inexpensive).

 

Weather

I must warn you: It gets very hot and extremely humid here in Hong Kong. The temperature stays relatively hot ~ warm throughout the whole year in European standards; however, the winter months can actually be quite chilly. Just to give you an idea, the highs hover between 20 and 33 degrees Celsius and lows between 14 and 27 degrees throughout the year. A low of 14 degrees seems warm enough but the buildings here usually do not come with heating; and the buildings seems to have been made with a design to let out heat. This means that you could be in an environment that is constantly at 14 degrees for some time. Yes, that can get cold…

 

People and Language

As of July 2016, Hong Kong has a population of 7,167,403 and is made up of more than 200 islands. Ethnicity wise, it is by far comprised of Chinese (93.1%) and the others include Indonesians (1.9%), Filipinos (1.9%), and others (3%) according to a study in 2011. Hong Kong has two official languages: Cantonese and English. It is said that the English language is used by 3.1% of the population as an “every-day” language and 34.9% of the population uses it as their second language. After the handover in 1997, Hong Kong has seen a rise in mainland Chinese immigrants flowing in, bringing in more and more Mandarin speakers.

 

Business

Hong Kong has grown into one of the largest leading Financial Centres and International Trading entities and I will get into this further in my next post. Today, I just wanted to focus on the brief overview of Hong Kong.

hong-kong-buildingsWhether you are looking at pictures of Hong Kong or just walking around town, one thing that is extremely hard to miss is the sheer amount and density of skyscrapers. Since, land is very scarce in Hong Kong, the only way to accommodate more people is by building up. Needless to say, this means that rent and purchase prices of flats are some one the highest in the world. This means we need to work extra hard to be able to afford it here!

In our next post we will start talking about businesses here in Hong Kong!

Yes, We’re Back!

Posted on Posted in Business

hong-kong-were-back

After a bit of a hiatus we are back up and running again!

Our agenda remains the same. We will be delivering our readers with information on the city of Hong Kong, it’s culture, Businesses, trends, opportunities, etc. Since, most of our articles from the past has been lost, we will begin by covering some of the basics like an ‘intro’ to Hong Kong. Then we’ll move onto the meatier stuff like how to set up and grow your business over here.

During our hiatus, I received quite a few emails asking me why I was taking a break from hongkongbusinessnetwork.com. Well, to put it simply, it was to focus on my new business venture. Now that my business is somewhat stable, I decided to restart this website in hopes of helping anyone that is trying to start their own business.

This website is not a means to promote my personal business in any way, so, I won’t be mentioning or putting links to my business here. I’m hoping I’m doing my job well enough that the people interested in my business will come across it on their own and me not having to shove it in your faces 🙂

Instead, I want this website’s focus to be on what matters to business owners and people desiring to set up their own business here in Hong Kong.

If there is anything you would like for us to review or cover in particular; please don’t be shy and let us know!

Looking forward to our new journey!