Everything You Need to Know About Starting a Business in Hong Kong
7 minute read
As a major business hub in Asia Pacific, Hong Kong has become a prime location to start a business in any industry. Reasons for this interest include fewer business regulations, lower taxes, and great location.
Apart from the government backing and favorable legislation, Hong Kong’s dynamic economy, huge market base and legal framework all make it easy to get your business up and running. As many as 2,913,395 documents were submitted for business registration in 2021 alone, which solidifies the fact that it is a popular location for both local and foreign entrepreneurs looking to set up a company.
Running your business in Hong Kong will, however, pose its own challenges. Indeed, the early years might be very hard, and not everyone succeeds. But this article will help you with the process of starting your business in Hong Kong, and it’ll put you on the right path to running a successful organization.
How to set up your business in Hong Kong
Step 1: Choose a Unique Business Name
The name you give your business is crucial. Give it proper thought as this is what you’ll build your reputation around. The name you choose needs to be unique and cannot be a name another person has previously registered. You could give your business an English name, a Chinese name, or both; however, you may not use a combination of English letters and Chinese characters in your name. Any name you choose must not give the impression of being government related. You also want to ensure your business name does not come across as offensive or opposed to public interest. It’s good to note that if you’re inclined to change your company name after incorporation, you’ll need to fill in a Notice of Change of Company Name to this effect.
Step 2: Write your Business Plan
Your business plan will set out all the important information about your business. It will showcase what your business is all about, which markets it will serve, what to sell, how to sell, etc. A good business plan will help you build trust with your investors and raise funds. It should also show how you intend to go about your business and grow in the early stages. Your business plan can make or break your business, so you need to make sure your market research is properly done. Understand the gaps and problems you aim to provide answers for. If you’re not sure of how to write a solid business plan, you can use these templates designed to help jumpstart your business.
Step 3: Register your business
The next thing to do is to register your business with the Companies Registry (the Hong Kong body in charge of incorporating businesses). You can submit the necessary documents yourself to begin the lengthy process, or you can opt out of the admin and have Sleek incorporate your business for you within a day.
In registering your business, you get to decide the business structure you want your company to operate with. Your business can be incorporated as a limited company which means it is considered as a separate legal entity from you, the owner. You could also register as a sole proprietorship or unlimited company. Although registering as a limited company offers a lot of advantages, be sure you consider all business structures to determine the best fit for your business operations. Find more information on the most common types of business entities here.
Step 4: Open your business bank account
To properly manage the finances of your business, you should have a separate bank account for your business. While it might seem easier and convenient to just use your personal account as a startup, your finances can get complicated in the long run. A corporate bank account will provide security and more control of your funds. Moreover, it will also make things easier during capital gain tax and audit periods. However, don’t go ahead with opening just any corporate bank account; carry out research as to what type of bank will suit your business needs. You can go for the traditional banking services or decide your business will be better served by using modern, digital banking options. It’s up to you!
Step 5: Find a mentor
Starting your own business is definitely exciting, but you’re bound to face some challenges along the journey. One way to ensure your business triumphs is by building a relationship with a mentor. It could be a more experienced colleague or a professional in the same business niche with whom you share common values. Their experience will guide you, impart wisdom, and provide creative solutions to problems, without you having to figure things out all by yourself. Ideally, you should look for someone who is trustworthy, open to taking on a mentee, and in a position you’d want to be in a few years.
Step 6: Network like your life depends on it
As a new business owner in Hong Kong, it might be difficult to network initially. However, a high-quality network will increase your chances of building a successful business. How? When you network with the right set of people, aside from being in a prime position to discover the best links to markets and suppliers, you also get to meet people who have solved problems you’re facing as a start-up. Some quality, well-known networking organizations in Hong Kong include the American, French, Italian and English Chambers of Commerce. You can also check out these networking groups specifically created for entrepreneurs.
Step 7: Apply for Hong Kong funding and grants
Needless to say, you should have enough money to help your business grow without having to worry about low profits in the early days of your business. Funding comes in many forms, including angel investors, crowdfunding, accelerators, and more. The Hong Kong government – in its efforts to ensure businesses thrive as much as possible – has a number of government funds and grants your business can benefit from. Apart from funding, there are also programs put in place to offer support to businesses in the form of subsidized services and loans. These grants and funds will help your business’s finances, and can be the difference between success and failure.
Step 8: Use tools to make your business run smoothly
In our personal lives, we become more efficient when we use good tools; this is even more crucial for running a business smoothly. As an entrepreneur, the ability to multitask and automate processes will play a major role in the growth of your business. The best way to achieve this is by choosing the right tools that will boost your productivity and support growth at a minimal cost. Tools like Asana, WordPress, Sleeksign, Wise etc. are all tools you should use to the advantage of your business.
Step 9: Be on top of your game
As a business owner, it’s your responsibility to lead the business to success. More than any other single factor, the results are determined by your behavior and efforts. You must lead by example with your attitude and energy. The drive and passion you show in your business is what will be mirrored by those working with you. However, you’re only human, so you need to balance your time properly and get enough rest. The business suffers if you burn out or get ill. By using your resources effectively and delegating as much as possible, you can avoid burning yourself out. In addition, you’ll have enough time and mental bandwidth to focus on the decision-making aspects of the business.
The Hong Kong market provides an exciting and highly rewarding environment for businesses, however, it’s up to you to maximize the opportunities available. To ensure your business achieves long term sustainability and growth, you need all the help you can get. Sleek will help start, build and run a successful business entity even if you’re not in Hong Kong. With services including corporate secretary, accounting, and tax and auditing, we’ve got all the expertise you need. All you have to do is get in touch today.