Hong Kong, is one of the most business-friendly cities in China. With its free economy, world class infrastructure, relatively low taxes and high quality workforce, the city continues to attract more and more entrepreneurs every year. If you are interested to start your own business in Hong Kong, here are the steps to do it:
See Also: How To Start A Business In China
1. Register Your Business
The first thing you need to do is decide what kind of business you want to run. This could be a sole proprietorship, partnership or limited liability company. Once your business is registered, you will be required to display a Business Registration Certificate at a visible place in your premises. However, having this certificate is not enough. You might also be required to apply for other certificates, approvals, permits and licenses relevant to your business. In addition, you will need to register your trademark, designs or patents to protect them from being used by third parties. For more details about registering a business in Hong Kong, visit the GovHK site.
2. Setup Your Business
After registering your business, you will need to buy or rent a business premise. Consider factors such as size, accessibility, location and cost when making your decision. After securing premises, be sure to insure it against damage or loss from events such as burglary, fire and natural calamities. Besides finding office space, you might also need to relocate or recruit staff. Any resident of China is allowed to take up employment or do business when visiting Hong Kong. However, people from elsewhere must first apply for a working permit before they can work. If you want to recruit local staff, take time first to study the labor guidelines and legislations in Hong Kong. You can learn more about this in the HK Government website.
3. Understand Relevant Taxes
Hong Kong has a very transparent and simple tax system. It is very important to understand these taxes to ensure that your business remains on the right side of the law. When you start a business in Hong Kong, you need to take note of the following tax information:
- Profits tax
- Tax obligation of business operators and employers
- Double Taxation Avoidance Agreement between Hong Kong and China
Visit the Inland Revenue Department for more details of these taxes.
4. Get Funding for Your Business
If your business is in need of financing, you can choose from one of three options:
- Bank overdraft – This is a preferred method of financing due to its flexibility, convenience and availability. However, due to its high interest rate, it is more suitable for short-term requirements
- Bank loans – Some of the most popular solutions are business revolving credit, profits tax loan and small business loan
- Government funding – The Hong Kong government runs programs such as SME funding schemes to support both foreign and local enterprises. Visit GovHK for more details about government funding
- Other sources – This could be personal resources, venture capital or angel funding
5. Trading Overseas
If you want to trade overseas, you need to understand Hong Kong’s import and export licensing and control requirements. You are not required to pay customs tariff on imports and exports. In addition, there is no general service or value added taxes. The only goods that incur duties are methyl alcohol, hydrocarbon oil, tobacco and liquors. Visit the Trade and Industry Department to learn more about the import and export licensing and control requirements.
See Also: How to Find a Job in China
These are just a few guidelines for starting a business in Hong Kong. Starting a business can be very difficult in any country. However, a business in Hong Kong can turn out to be very profitable, just make sure to follow all the rules and regulations carefully and you will find out that it is one of the best cities in the world to build your own company.
Have you ever been to Hong Kong before? Do you agree that it is one of the best cities to start your own business? Share with us your thoughts in the comments section below.