“Women can often find themselves labelled with the veiled attempts of squashing femininity. You don’t have to become like a man to succeed. You can still be successful and keep your womanly graces.”
These were the very words of Anson Chan, the former Chief Secretary of Hong Kong when asked about what it takes to be a working woman. If you think that starting a small business in Hong Kong is an impossible feat, you are only putting yourself down. While it is not a walk in the park, it is something that you can accomplish – as long as you are equipped with the right tips and strategies.
Starting a small business in Hong Kong will open a lot of opportunities. This is one of the most promising regions in Asia. Just like Singapore, this follows a liberal economy. When you open a company here, the restrictions you will face will not be as limiting as those that you will encounter in other cities or regions.
The process is not only simple, it is also very fast and quite cheap. You only have to spend HK$10,000 to completely process and register your business. In fact, some entrepreneurs have opened a business in Hong Kong and they do not even live here!
Probably the best thing about Hong Kong is that you can open more doors to the biggest market in the world – mainland China! Through the CEPA or Closer Economic Partnership Arrangement, this region is given exclusive access to some markets in the mainland. Having a small business in Hong Kong will get you closer to that.
Tips when starting your business in Hong Kong
But before you dwell on the specifics of doing business in Hong Kong, it is important for you to go through a couple of steps first.
Do your research.
This is always the best way to start your dreams of becoming an entrepreneur. Knowledge is your best defence. It is a fact that a lot of small businesses end up closing because they were not able to survive the obstacles that are common with start-ups. In order to keep this from happening to you, it is important for you to know what you are up against. Start by going through government websites. The Hong Kong Trade Development Council is a great place to start.
Create a business plan.
As you are creating this plan, you are actually detailing what you want to achieve for your business. While ideas are usually what gets businesses started, it is the business plan that will tell you if it is feasible or not. When you complete it, this plan will serve as your roadmap to help you accomplish the business that you want to start.
Know where your finances will come from.
The local government is actually very supportive of small business enterprises in the region. According to the Hong Kong Economy Research, John Tsang, the Financial Secretary, revealed several relief measures that will help businesses survive the economy in Hong Kong. One of these includes a reduction of the salary and profit taxes by 75% (subject to an HK$20,000 ceiling).
The local government recognizes that role of emerging markets and this lead to the different funding schemes that will be given to start-up companies. But beyond this, you have to come up with your own capital. Will it come from your savings? A windfall money? Or will you borrow from a bank? Will you seek out funding from an investor? Having adequate finances will allow you to get the ball rolling in your business and will help weather the storms of a start-up.
Decide on the structure of your business.
This will help determine the legalities of your business. In Hong Kong, there are 3 types of business structures.
- Sole proprietorship.- This is a business structure that only has one operator and shareholder. You own the business and you are entitled to the profits and assets. At the same time, you alone bear the liabilities. Since there is only one owner, this type of business has the easiest and most simple registration process. In fact, you only have to register with the Business Registration Office. Of course, your source of capital will be limited because it will all be coming from you. But at the same time, you are in full control of the business – that means decision making is fast and easy.
- This type of business structure involves two or more people or partners.In Hong Kong, you are allowed to have as high as 20 partners. This structure follows the Partnership Ordinance so if you plan to have this type of structure, educate yourself about this ordinance. You can choose to have a limited liability wherein the maximum partner liability is within their capital contribution. You can also choose to have an unlimited liability partnership wherein more than one of the partners will hold unlimited liability in the company. A great thing about this structure is the bigger access to capital. However, some processes may take longer because you have to get the consent of the other partners. Although you may encounter conflicts now and then, this will give you a wider knowledge base to help make the business successful. Just be careful because most of the time, what one partner signs into will involve the other members of the partnership.
- Joint venture. -Finally, this is a business structure that is jointly owned by two individuals or entities. This is more complicated than the partnership because it can follow a lot of business models and it is the most complex to run. In some cases, this is a temporary arrangement that is not intended to run permanently – although some successful ventures end up being permanent anyway. This structure is a great way to test if a partnership will work or not.
Complete your documents.
Finally, you can complete the documents that will allow you to run the business legally. This means you need to secure business permits, licenses, and other documents to make your operation legal. You have to go through the registration and pay the fees to have them processed. Here are some documents and fees you have to acquire. (Prices are estimates as of 2016.)
- Incorporation documents and seal, stamps, etc. (HK$2,000)
- Company registration (HK$1,700)
- Business registration certificate (HK$250)
- Provision for the registered address for the office (HK$2,000)
- Provision for company secretary (HK$3,500)
- Business bank account (depends on the bank)
Once you have done all of these, you can start operating your small business in Hong Kong. Just make sure to keep tabs on the laws in the region to ensure that you will remain compliant with the rules and regulations of the industry you have chosen to profit from.
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