There are many different places suitable to do business globally, but Hong Kong is in the top 15 best places to start a business. One of the reasons for this is the region’s business-friendly economy and tax benefits. Further, it is also a free port where the government charges no tariffs on the import and export of goods. Indeed, all these reasons make Hong Kong attractive to entrepreneurs and multinational companies.
However, as there are advantages, there are also challenges to doing business in Hong Kong. Here are the top challenges that companies face while doing business in Hong Kong.
Capital is one of the primary concerns when setting up a business. Every startup needs sufficient funds to get the company off the ground and running. Most business owners will opt to borrow funding from local banks, but the Hong Kong banks lack in this avenue.
The national bank of Hong Kong does not provide loans to fund startups. In fact, almost all local financial institutions in Hong Kong won’t help you in this matter unless you have an existing property in Hong Kong. If you do, then the local bank will grant you a loan with the property as collateral. Moreover, other banks may help you with your funding, but interest charges are much higher than in other countries.
Opening of Bank Accounts
In addition to the difficulty in getting loans for business startups in Hong Kong banks, it is also somewhat challenging to open a local bank account. Most Hong Kong banks have strict requirements for opening new business accounts. And even after submitting all the necessary documents, there is no assurance that they will approve your account opening application.
Registration, Licenses, and Permits
To fully legalize your business, you must comply with the required business registration and acquisition of licenses and permits to do business. While the roster is relatively simple, you have to follow the requirements strictly. Failure to do so can result in not getting your business registration certificate.
Moreover, getting licenses and permits are also laid down only for ease of transaction. However, the periodic running back and forth to the government office may be troublesome, especially if you have to handle other matters. When deciding to open a business in Hong Kong, make sure you allow enough time and carry enough patience to legalize the company successfully.
One of the obligations a business needs to comply with in Hong Kong is the registration of any business property you own. The Land Registry, which is under the Development Bureau, is responsible for the registration. Additionally, the agency also provides support on concerns like searching for track records. The property registration will take a minimum of 20 days to complete.
Hong Kong is known to be a special administrative region of China. In addition to their proximity to China, this fact means that many Chinese comingle into the population. As a result, the Hong Kong culture has large influences from China. This influence becomes a problem because even when Hong Kong is a well-developed country with a diverse population, non-Hong Kong residents will have to adapt to the Chinese culture and even learn their language. Otherwise, dealing with a Chinese business counterpart may dive and not recover at all.
Overcome the Challenges- Own a Business in Hong Kong
Even with the challenges mentioned above, the benefits still outweigh these difficulties. With the economic and market opportunities in Hong Kong, a thriving entrepreneur could easily overcome the obstacles to reach the goal.
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