Problems of starting a business in Hong Kong

Problems of starting a business in Hong Kong

Over the past two to three decades Hong Kong has quietly established themselves as the ultimate business hub of Asia. Their strategic location, government support, and tax policies have made them the perfect place to conduct businesses for any nationality. Often seen as the gateway to entering the Chinese market, companies and investors from all over the world are now looking to incorporate their businesses in Hong Kong. Along with the fact that corporate taxes are rated at only 16 percent and income tax only goes as high as 15 percent, Hong Kong truly does provide the best place to start any forms of businesses.

While the benefits of starting a business in Hong Kong greatly outweigh the problems, there are still some issues which may hinder potential first timer businessmen from successfully starting their business in this great nation. Despite the great appeal of starting a business in Hong Kong, one has to carefully consider the problems they are likely to face when starting off the first time. With that being said, listed below are some of the problems of starting a business in Hong Kong.

Acquiring Capital

No matter what kind of business it is that you are looking to start and what part of the world you are in, you will always be needing one thing; capital. And every start-up needs a significant amount of capital to get the business off the ground and running. In most cases, you look for that capital from the local banks. However, if you are looking for the opportunity and problems in Hong Kong then I am afraid you are out of luck. The national bank of Hong Kong does not provide any sort of loans for start-up businesses. In fact, most of the local banks and financial institutes in Hong Kong won't be able to help you in such matters unless you have some property in Hong Kong. Only then they will loan you money against your property as collateral. While there are many international banks in Hong Kong that may provide you with the initial capital, the charges may be higher than what you get in your own country.

Registration, License, and Permits

Before you can legally start your business in Hong Kong, you will need to get your business registered. After that, you may need a license for your business based on the type of business you plan on starting. Registering a business is done at the Companies Registry. While the registration process is simple, you have to strictly follow their few requirements. Failure to do so may result from you in not getting that Registration Certificate which you have to have displayed at your place of operations. The license is also very important to get done especially if you are planning on running a restaurant business or an educational institute or even trading companies. The procedure is easy but the constant running back and forth to the government office may take a toll on you.

Getting Electricity

Every business no matter how big or small needs some sort of electricity to function properly. The amount of electricity may be huge if you are into manufacturing business. It may vary if you are looking to provide some sort of service to your customers. Either way, it is of top priority to get the electricity following through your company buildings. In Hong Kong, CLP Power is responsible for all sorts of electrical connections. When starting a business you will have to send a written application to CLP Power. Once they receive it, they will send over teams for inspection and make sure everything is fine before they give the go-ahead for the power. It usually takes about 41 days to connect new businesses to the power grid. So even though you may clear up all your legal paper works, it will still take over a month before you can run your operations smoothly.


The geographic location of Hong Kong is such that they are in close proximity to China. Their great relationship with China in terms of trading and business also means that the whole country is filled with numerous Chinese people. One could even say that their business and culture has a huge influence from the Chinese themselves. As a result, many non-Hong Kong residents or Chinese businessmen need to adapt to the Chinese culture and sometimes learn the Chinese language to do their business smoothly. Otherwise, their trading with the Chinese businessmen may take a dive and probably will not recover at all very soon. So if you are looking to start your business in Hong Kong then make sure you brush up your knowledge on the Chinese customs and language.

Saturated Market

As mentioned earlier, Hong Kong is already the business hub of the entire Asian continent. There are hundreds if not thousands of businesses and establishments already in play. The market is pretty much saturated. So unless you are planning on coming up with something completely new or dynamic, it will be very hard to capture the Hong Kong market. Because chances are that whatever you may think of, the Hong Kong people have already seen it, lived it and probably have alternate versions of it.


Company Registration Expert Since 2012