Welcome, readers! Have you had the opportunity to visit Hong Kong? What are your impressions of this vibrant city located at the southern tip of China? As you are now attracted by the title and peruse this article, we can’t help but surmise that an initial investment plan for Hong Kong has already popped up in your mind. Congratulations! You are undoubtedly making a wise decision, although you may not yet grasp just how advantageous it can be!
While you may have acquired some fundamental textbook ideas (like Hong Kong has long gained global recognition for its welcoming attitude towards foreign investments and has consistently been ranked the world’s freest economy in recent years), there’s truly nothing like engaging with the locals to unlock a deeper understanding. So, why not join our “mini local tour” and gain some insights. We would like to bring your attention to four crucial aspects regarding investment and establishing a brand presence in Hong Kong, which will only ignite your investment plan!
1. No Discrimination in Hong Kong when Setting up a Company
Setting up a local company in Hong Kong may be easier than you initially thought. Language won’t pose a problem at all as English is one of the official languages in the city. The rules and regulations are also set out in an organized manner and readily accessible (https://www.cr.gov.hk/en/services/register-company.htm). Cool, you have got the basics covered!
Even more enticing is the fact that there are simply no extra barriers nor restrictions for foreigners. You set up a company exactly the same as how a Hong Kong resident does. This is quite exceptional from a global perspective. For instance, in Taiwan, setting up a company involves months of gathering information, documents, and preparing a solid proposal to persuade the Foreign Investment Commission for approval, while a local Taiwanese can do it within a few days. Even in Singapore, a major competitor to Hong Kong and one of the freest economies, it is obligatory to engage a Singaporean as a director of the company.
By the way, when proceeding with the setup, exercise caution in selecting a licensed agent, often referred to as a company secretary, to manage the process. As of 2018, all company secretarial service providers are required to obtain a license. You can find an approved list of such providers here (https://www.tcsp.cr.gov.hk/tcspls/search/public-search?k=ALL). Be sure to choose wisely for a smooth and hassle-free experience.
2.Bank accounts opening in Hong Kong is No Straight-Forward
In stark contrast to the relatively straightforward process of setting up a company, establishing a bank account has become increasingly complex due to the ever-tightening anti-money laundering measures, both in Hong Kong and elsewhere. When applying for a bank account, you can expect meticulous scrutiny and questioning from the bank officers. In particularly, they will be very curious about your reasons for setting up a business (and thus a company bank account) in Hong Kong.
To demonstrate your commitment to making a mark in the Hong Kong market, obtaining a trade mark application in Hong Kong beforehand may prove beneficial. This action can signal to the bank your serious intentions and help establish your credibility as a legitimate business entity. The said trade mark application can also outline the specific scopes and areas of focus for your business.
3.The Greater China Region Connection: Hong Kong as a Brand Litmus Test
Hong Kong, often famed as a bridge between the East and the West, boasts a fascinating blend of cultural influences. Despite this cosmopolitan diversity, the majority of the citizens remain Chinese descent, creating a unique dynamic. In addition to the local population, this charming city attracts millions of mainland Chinese visitors each year, Hong Kong therefore serves as a real litmus paper for brands seeking to tap into the lucrative mainland China market.
The city’s densely populated landscape is also a fertile ground for the powerful phenomenon of word-of-mouth marketing. With close-knit communities and rapid information dissemination, word-of-mouth can spread like wildfire, swiftly impacting brand perceptions and market success.
Moreover, with a limited number of mass media channels and a highly efficient market, the streamlined landscape allows marketers to focus their resources precisely on the targeted audience, maximizing efficiency and impact.
The ripple effect of building a strong brand reputation in the Hong Kong market should not be taken lightly. Such goodwill easily diffuses across borders, granting businesses a competitive edge when expanding into mainland China, as well as the neighboring markets of Macau and Taiwan.
In conclusion, stepping in the Hong Kong market first may surprisingly offer you a strategic advantage as a springboard if you aim to conquer the vast potential of mainland China and beyond.
4.Government Funding for Overseas Expansion of Local Brands
While the domestic market is fairly small in Hong Kong, local SMEs receive robust support from the government across various fronts. In particular, the government channels substantial resources, both monetary and non-monetary, to aid in overseas expansion, making it an inviting prospect for entrepreneurs from all corners of the globe. Again, there is zero discrimination against local companies established by foreigners. As the renowned management guru, Professor Peter Drucker, once said, “The purpose of business is to create and keep a customer.” With this in mind, the smart you should take heed of the golden opportunities provided by governmental funding and support, particularly in the realm of marketing.
SME Export Marketing Fund (“EMF”): Paving the Path to Global Markets
Venturing into overseas markets through exhibitions can be a potent strategy, but the associated costs can be substantial. Fortunately, the Hong Kong government lends a helping hand to SMEs by offering financial assistance. With a generous cumulative funding ceiling for a local company up to HK$1 million (around US$125 thousands), local companies can seize the opportunity to participate in trade exhibitions outside Hong Kong, large-scale exhibitions targeting the local market as well as online exhibitions, and even enhance their corporate website or mobile application for export promotion.
Branding Upgrading and Domestic Sales Fund (“BUD”): Empowering Global Expansion
Realizing that exhibitions are only a part of the equation, the Hong Kong government further bolsters local companies to tackle challenges posed by the global economic downturn and diversify into new markets. The BUD Fund encompasses projects aimed at developing markets in 36 economies, namely, 10 ASEAN countries, Australia, Austria, Belgo-Luxembourg Economic Union, Canada, Chile, Liechtenstein, Switzerland, Sweden, Denmark, Iceland, Norway , Finland, France, Georgia, Germany, Italy, Japan, Korea, Kuwait, Macao, Mexico, the Netherlands, New Zealand, , the United Arab Emirates and the United Kingdom.
The fund supports a wide array of initiatives, including brand strategy and building, positioning and identity, brand equity research and promotion, as well as sales channel establishment and management, advertisements, and product or service promotion. The funding ceiling is exceptionally high, reaching HK$7 million (nearly US$1 million), though it operates on a matching basis, requiring companies to contribute 50% of the total approved project cost in cash while the government covers the remaining 50%.
In a nutshell, Hong Kong’s government demonstrates a steadfast commitment to fostering the growth of local SMEs and enabling their global ambitions. With abundant financial support and a vast scope of opportunities, you have an open invitation to leverage these initiatives for your businesses’ prosperity and expansion on the global stage.
Conclusion
We are honest. If you do not engage in any business activities in Hong Kong in the first place, you may not find the pressing need to concern yourself with trademark filings in this small but vivid city. That’s perfectly understandable! At Origin, we understand your perspective, which is why we provide compelling reasons to encourage you to plant your business roots in Hong Kong. As your dedicated one-stop solution, we cater to foreigners seeking to expand their presence in both Hong Kong and the greater China region. Our comprehensive services cover Intellectual Property, Compliance, and Language support, offering invaluable assistance for your foray into the Far East.
If you are convinced that establishing a Hong Kong company will prove advantageous, with global expansion within eyesight, many tricky trade mark issues will follow, which require advance thinking and strategic planning. We shall shed more light on these intertwining trade mark issues in our next article! Stay tuned for valuable insights!
We could always be reached at tsminfo@originbc.com if you have any questions.
