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While thinking about Hong Kong, things come in mind like a shopping paradise, bespoke tailors, temple street night etc. Beyond that, Hong Kong is a dynamic city with strong growth prospects that is why it is becoming heaven for new startups. Being 5th fastest growing ecosystem globally and ranking 25th in the world, Hong Kong is enjoying $3.2 Billion USD, as an estimated value of startup ecosystem. These stats serve as a real attraction to get started with your business in this stable, business-friendly cosmopolitan. Here, in the lines below, you will find some more convincing reasons to base your business in Hong Kong.
Before digging into the main reasons, at first, know why to go outside your own country or going global? Many big names, like Google, Apple, Amazon, Facebook, PepsiCo, and Starbucks are diversifying worldwide. Why? That way, they might
Now, coming to the point, why businesses should pick Hong Kong as their first choice to get started, to expand, or to offshore. Here are given the reasons, based on stats collected from reliable sources (will be mentioned accordingly).
The first reason to be there in Hong Kong for your business is the freest economy the country offers. According to the 2016 Index of Economic Freedom (created by The Heritage Foundation and The Wall Street Journal), Hong Kong stands 1st globally as well as regionally (Asia-pacific region) with 88.6 scores in economic freedom. Other HK-stats revealed in the Index are encouraging for new entrepreneurs like;
Open markets, prudent economic policy, transparent legal environment, secured property rights, and regulatory efficiency are the key reasons behind growing HK economy.
In Hong Kong, a startup does not have to fulfill complicated requirements or expensive procedures. It is easy and less expensive to start or expand your business here in Hong Kong. That’s why there are more than 2000 startups, contributing to the growth of HK economy. A study conducted by GO-Globe tells more about the sectors startups are exploring in Hong Kong.
You do not need a physical address in HK, holding address can work. English and Cantonese are two main languages spoken in HK, removing the language barrier as English is international language to do business.
In Hong Kong, foreigners are allowed to be the sole owners of a business. They can enjoy top positions and can be the shareholders of a business entity. So, if you are not an HK national, still you can come and start your business here for sure growth. Government has setup a separate department, InvestHK, that facilitates the foreigners with free investment promotion and aftercare services to support their successful presence in Hong Kong. HK has its economic and trade offices in Singapore, Sydney, Tokyo, Brussels, London, Geneva, New York, San Francisco, Washington, Toronto, Berlin, and in different cities of Mainland China.
In Hong Kong, political stability, rule of law, and open market help foreigners enjoying business growth. Being an international business city, HK offers equal opportunities to local and foreign businesses. Included in world trade organization and other international forums, HK makes a business recognized worldwide.
Located in the heart of Asia, Hong Kong serves as an ideal place for growing businesses to reach the exciting business markets. Commercial and geographical easy access to mainland China makes Hong Kong the best choice of startups with plans of penetrating into the China business market, the largest populated country in the world. However, HK has separate legal system from that of mainland China.
Hong Kong is a global leader in banking. It offers multi-currency bank accounts to the companies starting up there. According . According to the Corruption Perceptions Index (CPI) by Transparency International, Hong Kong ranks at 18th with corruption index of 75 points for the year 2016. World powers like USA, UK, Japan, and Germany are behind HK in that regard. That’s a big appeal for businessmen who do not want to invest in illegal ways just to keep the business going or to remove any hurdles in way of quick progress.
The tax system of Hong Kong is business-friendly. There are no VAT, sales, withholding, estate, capital gains, or dividend-based taxes. The prevailing taxes are capped at lowest rates like 16.5% profit tax, 15% salaries tax, and 15% property tax, as mentioned on the official website of HK Government. Some other countries might not have taxes, but the business-friendly environment is not guaranteed over there as it is in HK. Economic Freedom of the World report by Fraser Institute has declared Hong Kong at top of the list with its policies and institutions supporting the economic freedom.
Another big reason to have your business in HK is the zero corporate tax. You have to pay taxes only on the business activities carried inside Hong Kong. Submitting tax returns is an online process, saving you money to be paid to the accountant.
In Hong Kong, a business owner does not have to wait for longer to actually see the business starting up. Fewer legal complications and support from government are paving the way for businesses around the globe to have their presence there in HK. Government offers incubators programs, loan guarantees, and marketing funds for startups, which means the HK government is actually investing in attracting foreigners and local residents to start their business over there.
Hong Kong allows businesses to write-off a long list of expenses against the corporation, which means deducting taxes and saving big money. Whether you are dining with your client or travelling for some business purpose, HK tax authorities are lenient enough toward write-offs or deductions. The costs of rail, bus, and automobile used for some business purpose are deductible, provided the transportation is business-based and local. Meals and entertainment costs are usually deductible up to 50%, provided both are ordinary and necessary. However, if you are arranging a small party at your home for some business purpose, the cost is deductible, provided the guest count is less than 12. The costs of year-end parties, seminars, and home-based presentations for the employees are 100% deductible. What else a newbie business owner could dream about?
For sure, it is not easy in other countries, but Hong Kong allows its business owners to sell the shares of their corporations. From the cash collected through shares sold, one can expand the business, can pay down the business debts, can diversify the assets, and can contribute to a charitable cause. All this is possible if you have your business presence there in Hong Kong whether physical or online.
Business infrastructure is the main consideration of a business owner while starting somewhere. Fortunately, Hong Kong provides an excellent business infrastructure in terms of transportation, traveling, telecom, and logistics. HK airport, one of the biggest airports of the world, is connected to more than 180 cities by air. Public transportation modes are also cheaper with a large number of taxis available to commute. The railways are fast, affordable, and reliable. Deep-water port of Hong Kong is also an attraction for business startups. Cell phone and internet services are affordable with 3G and 4G network coverage in HK. 98% households and 95% business buildings enjoy the broadband facility in Hong Kong.
Well-educated and adaptable talent of HK ranks at top of the world due to having excellent management experience in global business. Strong work ethics is the strength of Hong Kong local talents. The immigration policies welcome recruiting professionals from overseas. Employees from overseas are allowed to bring their families along with to live in HK. Immigration rules are friendly that way.
The dynamic, cosmopolitan lifestyle of Hong Kong makes it a city that never sleeps. Luxurious, rising high flats and villas in the rural areas are available for foreigners to live or buy (foreigners can buy property easily in HK). There are 164 public hospitals and 12 private hospitals. Expats medical insurance plans are versatile and provide better coverage. Unlike local residents, expats can enjoy lifetime insurance plan renewal, which means the plan does not depend on the health condition of the individual; they are covered anyway. Health staff at public and private health centers is locally and internationally trained.
Hong Kong is, no doubt, a heaven for startups, for those looking towards business expansion or those who want to go offshore. The facilities available here are matchless and ideal for anyone to get started or to offshore from any part of the world. Think about your business in HK; a prosperous future is waiting for you!