starting a business in Hong Kong, pondering coming to Hong Kong, an important international financial centre, Greater Bay Area

The high cost of starting a business in Hong Kong is unlikely to deter foreign firms from expanding into the city, because it serves as a gateway to the mainland Chinese and Asian markets, according to industry experts.

A number of overseas companies are pondering coming to Hong Kong, defying a recent survey suggesting it is twice as expensive to set up shop here as it is in rival Singapore.

“Foreign food and beverage brands from the United States, the UK as well as [mainland] China are actively seeking opportunities now. They will come to Hong Kong once the border opens,” said Oliver Tong, head of retail at property services firm JLL.

It costs on average US$512 to set up an office in Hong Kong, compared with US$238 in Singapore and US$138 in mainland China, according to the business finance and lending research and information website businessfinancing.co.uk. That is still cheaper than the US$641 it costs in Japan.

The survey used information from The World Bank’s Doing Business 2020 report to gather the cost and minimum capital requirement for a small-to-medium sized limited-liability company to get off the ground in the largest business-oriented cities in 190 countries.

“When an overseas or mainland company considers where to set up, it will also take into account the growth prospects the city offers, in addition to its cost side,” said InvestHK, a government department responsible for foreign direct investment, in an emailed reply to the Post.

As an important international financial centre Hong Kong offers unrivalled access to the mainland market, an easy business environment and low tax regime that is attractive to companies looking for a convenient global foothold, it added.

The fact Hong Kong is identified as a crucial international financial and innovation centre within the Greater Bay Area adds further appeal, said InvestHK.

“The number of mainland and overseas companies in Hong Kong is on a steady uptrend. There was only a very insignificant change in 2020 despite the Covid-19 pandemic,” it said.

The total number of offices and regional headquarters opened by foreign companies in Hong Kong was 9,025 in 2020, on par with the 9,040 in the previous year, according to data from InvestHK. The figure was 8,754 in 2018.

InvestHK said mainland Chinese firms accounted for 22 per cent of them, or 1,986 offices, making it the largest market in 2020, followed by Japan’s 1,398, the US’s 1,283, the UK’s 665 and Singapore’s 453.

“I do not think lower costs will lure multinational firms to Singapore, as the real estate cost is relatively small in proportion to their revenue,” said Martin Wong, director and head of research & consultancy for Greater China at Knight Frank.

CBRE said rental expenses accounted for about 8 to 15 per cent of a company’s operations in the finance sector.

“It is true that Hong Kong’s core business centre is one of the most expensive globally but the city also has many affordable decentralised markets for new companies to choose from,” said Ada Choi, head of data intelligence and management for APAC at CBRE.

She said the rents in Wong Chuk Hang, Kowloon East and the New Territories are lower than the average in Shanghai and those in “noncore” areas of Singapore.

Grade A, or premium, office rents in Wong Chuk Hang average US$42.5 per square foot per year, compared with US$52.2 in Singapore’s grade B offices in decentralised areas and US$67.2 in Shanghai’s historic Puxi area, according to CBRE. The average premium office rent in Central is US$155.9 per sq ft per year, 66 per cent higher than Singapore’s equivalent at US$93.7 and US$76.9 in Shanghai’s main financial district, Pudong.

“Grade A office rents in Hong Kong have dropped by about 25 per cent in the past two years, which is making the market more affordable,” said Choi.


Japan travel news, japan travel guides, japan holiday destinations and japan reviews

LATEST NEWS

NEWS RELATED

From Unesco heritage sites to a famous birdwatching spot named by Ba Jin, here are five places to visit in Jiangmen

The city of Jiangmen, which is the hometown of many Chinese now living abroad, boasts many tourist attractions that showcase rich cultural traditions and long history. From Unesco-designated World Heritage Sites to a famous birdwatching location whose name was coined by the famous Chinese writer Ba Jin, here are five…

Read more: From Unesco heritage sites to a famous birdwatching spot named by Ba Jin, here are five places to visit in Jiangmen

Bankers expect bigger bonuses in 2022 as financial sector goes on Asia hiring spree

Financial services professionals in Asia are confident they will receive bigger bonuses in 2022 as banks and other institutions scramble to attract and retain talent in Asia, according to headhunting firm Selby Jennings. Bonus payouts this year, particularly in Asia, did not reflect the exceptional profits banks produced in 2020…

Read more: Bankers expect bigger bonuses in 2022 as financial sector goes on Asia hiring spree

Wealth Management Connect: lenders vying for US$700 million a year in fees in Greater Bay Area, Bank of China executive says

The upcoming Wealth Management Connect will generate US$700 million in fee-based income a year for banks in Hong Kong and mainland China, making it the “next driving force” for the industry in the Greater Bay Area, according to Bank of China Hong Kong (BOCHK). The initiative will bring in a…

Read more: Wealth Management Connect: lenders vying for US$700 million a year in fees in Greater Bay Area, Bank of China executive says

Taiwan fund, Ping An ETF score big returns in Greater Bay Area as Hang Seng indexes reveal secrets to winning

Taiwanese money manager SinoPac Financials is making a killing with its Greater Bay Area fund after scoring 54 per cent gain over the past 12 months, while a Ping An Insurance vehicle earned almost 20 per cent. The key to beating their peers may just lie in tracking companies in…

Read more: Taiwan fund, Ping An ETF score big returns in Greater Bay Area as Hang Seng indexes reveal secrets to winning

Amundi, Europe’s largest money manager, targets US$600 billion in Asian assets under management by tapping Wealth Management Connect, ESG opportunities

Europe’s largest money manager is aiming to boost its Asian assets under management by 70 per cent to €500 billion (US$591 billion) by 2025, tapping opportunities arising from the forthcoming Wealth Management Connect scheme and China’s drive to achieve carbon neutrality by 2060. “China’s market is so huge that it…

Read more: Amundi, Europe’s largest money manager, targets US$600 billion in Asian assets under management by tapping Wealth Management Connect, ESG opportunities

Guangdong plans to build regional data centre in Shenzhen with coverage of Hong Kong and Macau

China’s southern Guangdong province has tasked its tech hub Shenzhen with building a big data centre for the Greater Bay Area, which includes Hong Kong and Macau, to help the “orderly circulation” of data in the region, according to a data plan published by the Guangdong government on Sunday. The…

Read more: Guangdong plans to build regional data centre in Shenzhen with coverage of Hong Kong and Macau

Greater Bay Area: Alibaba backs HK$2 billion fund for start-ups in and around Hong Kong

Alibaba Group Holding’s Hong Kong Entrepreneurs Fund (AEF) will be an anchor investor in a HK$2 billion (US$257 million) fund to support start-ups in the Greater Bay Area (GBA) of Hong Kong, Macau as well as parts of Guangdong province in a vote of confidence for Hong Kong’s role in…

Read more: Greater Bay Area: Alibaba backs HK$2 billion fund for start-ups in and around Hong Kong

Here’s why Vitasoy needs to overcome the ‘Get out of mainland China’ boycott after stock market beating

Vitasoy International, one of Hong Kong‘s largest non-carbonated beverage manufacturers, is facing possibly its biggest corporate crises in recent decades following a consumer boycott in mainland China over a leaked internal memo. That memo, penned by a now-dismissed employee, was sympathetic to the family of a manager whom police described…

Read more: Here’s why Vitasoy needs to overcome the ‘Get out of mainland China’ boycott after stock market beating

To take the Greater Bay Area to the next level, why not learn from Europe?

Toilet-paper maker, fruit-tea drink start-up among five companies from Jiangmen that stand out from the crowd

AIA acquires US$1.86 billion stake in life insurance arm of China Post Group as it expands presence in the mainland

Hong Kong takes step towards becoming Asia’s hub for wealthy families to protect their fortunes

This is how Hong Kong can become an international data centre hub in Asia-Pacific region

Online deliveries help Carlsberg break into top five beers in world’s largest market

Why Hong Kong is the ideal global hub for family offices

Hong Kong can connect Greater Bay Area with world, much like San Francisco’s role in Bay Area, US think tank says

OTHER NEWS