Hong Kong has a history of being one of the most liberal economies in the world. Its independence from mainland Chinas has made it possible for Hong Kong to enact laws and operate as a free market. Because of this mode of operation, Hong Kong does not have import tariffs, and excise duty is only levied on methyl alcohol, hydrocarbon oil, tobacco, and alcohol. These, coupled with a stable banking and political system makes Hong Kong one of the most attractive regions for locating an offshore company.
After opening a business in the great city, you need to match forward and work towards building a successful venture. Here are ten most important tips that will help your business to grow and succeed.
Carry comprehensive research to address challenges in the market
One reality that dawns to every investor in Hong Kong is that the market is very competitive. The saturated market comes with numerous challenges that every investor must appreciate and address comprehensively. Through comprehensive research, it is possible to come up with a lasting solution for every challenge.
The research must focus on understanding the Hong Kong cultural nuances when doing business. This will help when crafting long-term relationships and strategies. For example, you have to try and learn the local language for better communication when handling clients.
The entire Hong Kong market is built on its culture that has refused to go away even with the strong influence of the west. Therefore, whether you are making ads, drawing social media profiles, or other marketing campaigns, the local culture must be felt. You might want to contract an appropriate marketing professional to ensure that every effort underscores the local culture. `
Adopt the right business etiquette when operating in Hong Kong
The business etiquette in Hong Kong is very important because it defines how satisfying your operations are when dealing with clients. The first thing is ensuring you understand all components of the respective product, talk to people with respect, and apply non-verbal cues where necessary. Whether dealing with clients directly online, the sense of respect and professional persuasion will work best for the enterprise.
Create and grow networks with the right stakeholders
Business networks in Hong Kong are perhaps the most important for investors who want to leverage their operations for faster growth. As a business, the focus should be identifying networks that are potential for the enterprise.
For example, if you have an e-commerce store, some great partners might be banks, organizations, schools, and blog sites. These are the stakeholders who can carry the message to a bigger audience and drive traffic.
Keep redefining the marketing strategy
The marketing strategy you adopt when operating in Hong Kong defines the pace of growth that can be realized. While the marketing strategy might have worked at the startup, the chances are that it will soon become irrelevant and require major adjustments. Therefore, you have to progressively review this progress to identify areas of weakness and implement appropriate changes.
The review should involve appropriate competitor analysis to establish what he is doing better than you and how to address it. For example, you might realize that though the competitor uses a similar website, the results might vary because of better blogging strategies. Note that this does not mean that you adopt the same strategies, but ensuring that your method is better and more effective.
Ensure to take advantage of tax residence status
If your main aim is exploiting the huge market that is China, Hong Kong is the best place to start. China and Hong Kong have various partnership agreements that give preferential treatment to companies located in Hong Kong. However, you will only receive this special treatment by demonstrating tax substance.
Hong Kong insists that you .must demonstrate that the economy of Hong Kong benefits significantly from your presence before getting a tax residence certificate. To get this crucial status, you will need to do the following;
- Ensure that most of the activities are done in Hong Kong. This means that deals and transactions are done within Hong Kong.
- Make sure to have an office that has all the infrastructure, staff, and utility bills.
- Ensure that the business pays all the required taxes on time to the Inland Revenue Department.
- Demonstrate that the business partners with others to help them grow and make Hong Kong better
Understand the changing Hong Kong legal environment
As a business driven economy, Hong Kong works very hard to make companies operations easy. Progressively, you need to review the changes in the law that affect you either directly or indirectly.
For example, in June 2016, the Hong Kong government passed the law that operationalized the OECD policy framework on Automatic Exchange of Information (AEOI) by passing new legislations. Under the new Hong Kong framework, entities with reportable accounts have to provide additional information to their banks for reporting to the Inland Revenue Department.
Under the law, you need to provide additional information such as tax residence, details of your operations, and additional authentication. This means all the shareholders of the company might require providing the company’s bank with proof of address and new details that might be required. If you do not give this info, the account could be terminated. It is these changes in the law that you must keep checking to ensure the business runs on the right side of the law.
Make sure to build your affiliate marketing strategy
In Hong Kong, just like other top cities, the role of affiliate and niche experts has become very clear. Many people rarely pop into a store because they are looking for the latest smartphone! Rather, they go for expert review and opinions. These are experts running top blogs in various areas and command a lot of authority. Such as the people who can lever your ability to drive more traffic and achieve higher sales.
Once you have identified the right affiliates, they will evaluate your product and recommend it to clients. Though the strategy will cost you some commission, it is a worth investment.
The method is preferred by many Hong Kong companies because you only pay when a client referred by an affiliate converts. This means that affiliate marketers do the heavy lifting while you only wait for clients to come and convert. Note that this method should be combined with other marketing strategies.
Plan to get ample funds for marketing and products development
Life in Hong Kong can be expensive. The business space downtown can be very expensive and out-of-reach for small businesses. Now that operations have started, and the business is in infancy, you need to have ample sources of funds.
Though you are advised to prepare meeting expenses for the first 6 months from your pocket, the figure is always very thin. You are, therefore, likely to be faced with additional costs to carry extra marketing campaigns to draw attention and convert. This is one point where a lot of people get wrong resulting in collapsing of business.
Some common sources of funding might include borrowing from banks, personal savings, or profits from other businesses at home. If you have had some time in Hong Kong, it might be possible to secure funding from the banks. Ensure that you have ample resources to drive the marketing campaigns until revenue starts flowing to meet all the expenses.
Take advantage of government opportunities to grow your business
In Hong Kong, the government goes to great lengths to help businesses succeed. In particular, it has established key programs that help businesses to incubate their ideas and grow with speed. If your business or any of its initiatives fits in any of the programs, you will be relieved a lot of costs and associated logistics.
Some of these Hong Kong supported programs include Cyberport Incubation Program and Guangdong-Hong Kong ICT Young Entrepreneur Program (GD-HK ICT YEP) among others. Ensure to read through the criteria for involvement in such programs.
Learn from the most successful business ventures in Hong Kong
While getting to Hong Kong might have looked impossible, some people feel intimidated by the big multinationals that command a lot of capital. But a closer look at such multinationals reveals that they also had a very humble beginning.
Now, your business can also grow to the same levels and expand globally. By following the route they took, it will be possible to also create a better platform for growth and success. If you are not in the same niche, some of the business leaders can even provide mentorship.
Succeed in a proper way
To succeed in the highly competitive Hong Kong environment requires a lot of commitment, research, and guidance at every step. In Hong Kong, there is no magic for growing a business; you have to work on it.
To make your work easier, it is important to have the right experts and support especially when you want to reap higher potential. Do not hesitate to reach us for help on growing your business to the next level in Hong Kong.