Hong Kong – An Introduction
Today, the Asian market is more important than ever before. With a population of more than 4 billion people, around 60% of the world’s population is situated in Asia. Compared to only 780 million people in Europe, representing about 10% of the world’s population. The immense population of Asia has led to an outstanding economic development.
Accordingly, today’s companies cannot ignore Asia as a sales market and should think about the “Asia expansion” early. Large international corporations, as well as many small and medium sized companies, are already fully integrated into the market. Many companies have bought or manufactured products in Asia, but now the sales market is becoming more and more important.
The Asian market is highly interesting because of its dynamics. In addition, the Asian countries have a younger population in relation to Europe and the USA. The digital infrastructure is outstanding in many Asian countries.
Not to be neglected should be the geographic and the overall political situation of Asia. Asia cannot be compared with the European Union or the United States. Asia consists of more than 40 different independent countries, which, unlike the EU and the US, have no common or domestic market.
This particular aspect makes it especially difficult for online based businesses to assess the market, because there are many markets and not just one. In addition, every cross-border delivery is immediately import and export, which results in a higher bureaucratic expenditure and makes cost calculations more difficult. Furthermore, all customs regulations of the various countries must be understood and taken into account.
Businesses however should understand this as an opportunity and not as an insurmountable obstacle. In Asia, it is easier to take a core market on which the business model can be checked with manageable risks for its practicality before the entire continent comes to attention.
The question of location is of paramount importance. Asia cannot be viewed as one market, so entrepreneurs and businesses need to develop a go-to-market strategy at an early stage, which focusses on where to establish the “business” in Asia.
As a matter of principle, companies are always eager to get close to their customers and / or suppliers and are accordingly inclined to align their initial business with Asia. However, this can unfortunately represent an error from which it might be difficult to recover at a later stage. Due to the multitude of Asian countries and thus also the large number of possible locations, a strategic starting point is of immense importance.
Within Asia, Hong Kong is located ideally especially from a strategic point of view. South China is one of the most important production sites in the world, and is directly adjacent to Hong Kong, also the region is seen as one of the most developed regions in China, a demanding market. Other main Chinese and Asian markets can be reached by plane in just four hours. In addition, half of the world’s population can be reached by plane within five hours. Also the official language of Hong Kong is English.
Hong Kong is very start-up friendly. The government and some major international companies have launched a variety of programs to help Hong Kong become the Asian start-up hub. There are programs like Brinc IoT, FinTech Innovation Lab by Accenture, Infiniti Accelerator, DBS Accelerator, AIA Accelerator, SuperCharger, Nest, Blueprint Of Swire, Incu App, The Cage of Lane Crawford, the Cyberport Incubator to name a few.
As a former British Crown Colony, the entire Hong Kong legal system is built on English law so that bureaucratic hurdles are lower than in other Asian countries. Since 1995, Hong Kong has been leading the ranking of the world’s free economies. As a special administrative area, Hong Kong is part of China, but the democratic-market system in Hong Kong is guaranteed for at least 50 years, thus at least until 2047. This autonomous position allows Hong Kong to have independent laws from China (PRC) and to have its own currency. This “One Country – Two Systems” principle enables Hong Kong to continue to be an international financial center, keeping the influence of the China (PRC) low.
We appreciate the opportunity to consult you in regard to the chances of your new business in Hong Kong and Asia. Mühler McKay provides supporting services for business operations such as assistance with incorporation services / company formation services, advising on tax efficient legal structures for (groups of) companies (corporations, for instance a Hong Kong Limited Company, partnerships, branches, representative offices), bookkeeping and accounting (according to Hong Kong principles) as well as audit arrangement, general corporate compliance like provision of company secretarial services (in Hong Kong) as well as providing registered office addresses (in Hong Kong), obtaining obligatory registrations, permits and licenses, as well as employment advice, including Hong Kong work visa application and general international tax services.
Mühler McKay offers comprehensive services which include arranging businesses and operations in a tax efficient manner in order to bring down your effective global tax rate, satisfy international tax compliance obligations and mitigate taxation risks.
Please contact us or visit us in Hong Kong for your first consultation for our incorporation services / company formation services of a Hong Kong Limited Company.
Mühler McKay based in Hong Kong is a business advisory firm with worldwide reach and renders international legal, tax and corporate services to a diversified international client base from various industries and sizes.