Foreign cultures can often seem impenetrable, particularly in Asia. As an American who has frequently traveled to the East, I find that not to be be true. Particularly, in Hong Kong. Just ask the Hong Kong Trade and Development Council. Hong Kong is actually one of the easiest and friendliest places in the world for a foreigner to navigate, particularly if you are launching a startup business.
Last year, Hong Kong was ranked eighth in a list of global cities where entrepreneurs want to meet up by a website called StartupTravels, based in Copenhagen. The proliferation of co-working spaces, where entrepreneurs and can serendipitously meet and share ideas, is part of the appeal. Today there are 40 such co-working campuses in Hong Kong. Although the first of these co-opened in 2009, the real boom began in 2013, with 16 new spaces opening over a period of 18 months, according to a recent study of entrepreneurship from the Chinese University of Hong Kong.
Hong Kong also has a number of government sponsored incubator programs, including Cyberport and the Hong Kong Science and Technology Parks (HKSTP), which work closely angel investors and venture capitalists. In 2013, the Hong Kong Business Angel Network invested HK$51.8 million in HKTSP incubatees.
Meanwhile, since 2010, universities and other organizations in Hong Kong have organized numerous entrepreneurship competitions, mentorship schemes, and incubation programs, including Startup Weekend, Accelerator HK, PaperclipHK, and StartupsHK.
Hong Kong Business magazine recently reviewed the country's hottest startups to look out for in 2015, and it includes everything from the No. 1 GoGoVan, a peer-to-peer app to connect van drivers with those who want to use the vans for convenient and efficient freight service, to Hotel Quickly, which offers deep discounts on last minute hotel bookings, to GateCoin, the "first global bitcoin trading platform."
The booming start-up scene is partly fueled by former investment bankers who saw opportunity and decided to leap to the other side of the table, according to a recent Bloomberg article. "In the past three or four years, there's been a massive push to have startups here in Hong Kong," former Goldman Sachs Group banker James Giancotti told the newswire. In fact, of the more than 332 businesses aided by government business development agency InvestHk through November of 2013, about 16 percent were startups, the agency told Bloomberg. That's up from 11 percent in 2010.
Hong Kong is good place for startups in part because it is a good place for business in general. In fact, in a global ranking of best countries to do business, Bloomberg ranked it first in 2013 and 2014 on a list of 50. That ranking includes high scores for a everything from degree of economic integration, cost of setting up business, cost of labor and material to cost of moving goods and readiness of local consumer base. It also has a highly skilled, well-educated, technology-savvy labor force. And it is a regional hub for China and Southeast Asia, home to some of the globe's fastest growing economies, where technology adoption rates are in some cases much higher than in the West.
Hong Kong is also one of the world's largest international financial centers: it is home to 70 of the world's largest 100 banks. There are no capital controls on currency or foreign exchange, which makes doing business in different currencies here very efficient. And unlike in, say Singapore, foreign-sourced income is not taxed in Hong Kong even if it is remitted to Hong Kong. Hong Kong also has no capital gains tax, withholding tax on dividends and interest, inheritance tax or value added tax.
What's more, Hong Kong's legal system is based on British law, features a completely independent judiciary, and is characterized by stability, transparency and freedom from corruption, according to WorkinginHongKong. Conflict resolution is the principle behind the system, rather than retribution. And the legal profession in the country is mature and steeped in both local and international law.
PwC in their Global Cities of Opportunity 2014 report listed some of the other advantages of doing business in Hong Kong:
- Airport-City Access
- Attracting Foreign Domestic Investment
- Broadband Quality
- Cost of public transport
- Digital Economy
- Ease of Commute
- Ease of entry (visa)
- Ease of starting a business
- IP Protection
- Shareholder Protection
- Maths/Science Skills
- Level of Operational Risk
- Corporate Tax Rate
- Workforce Management Risk
- Working Age Population
- World University Rankings
If you have a bright idea for a new technology business with global market appeal and an open mind, Hong Kong might be a good place to start.