Considering opening a Hong Kong startup?
Next to Singapore, Hong Kong has established itself as one of Asia's premier business hubs for foreigners looking to take advantage of its low tax rates, modern infrastructure and ease of company set up by choosing Hong Kong company formation there.
However, 'the Pearl of The Orient' is also making headway to join the former in the race to becoming one of Asia's startup capitals.
A recent 65-page report by Compass describes Hong Kong's tech startup ecosystem as having “great potential for acceleration, building on unique strengths”. The report goes into detail about some of the city's strengths such as its ease of company setup, access to capital and its close proximity to manufacturing hub, Shenzhen.
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The folks over at TechInAsia went through the effort of breaking down the report in an infographic that covers the facts, ecosystem value, strengths and weaknesses of Hong Kong company formation, and much more about the ecosystem for startups in Hong Kong.
Join us as we take a look at some the more telling facts and stats about the startup scene in Hong Kong below...
The startup scene in Hong Kong
- Closer look at the strengths
- The city's proximity to the manufacturing hub that is Shenzhen, and the support of cooperative zones such as Qianhai will help to accelerate growth in hardware startups.
- Hong Kong is widely regarded as one of the easiest, and most inexpensive places to set up a company in the world. Business owners have access to modern infrastructure, banking services and a legal system that is based on English Common Law.
- Closer look at the weaknesses
- Problems such as no prior IT industry to inspire founder motivation, little space and exorbitant housing prices certainly throws a spanner in the works, but if there is anything that can help fix these problems working together. Money and area can be saved in co working space that will promote startup culture even further, and inspire would-be founders to share ideas and innovate.
- Even though the report stated that there are remarkably few female founders, the winds of change are blowing. Female entrepreneurs in the city are certainly getting in the thick of things with the establishment of a Women Entrepreneurs Network to build a support network for ladies with business ideas.
- The shortage of tech talent is something that Hong Kong, and the rest of mainland China is dealing with at present. However, owing to the strengths mentioned above, Hong Kong's unique business environment will serve as a major pull factor for top talent. The backing of Alibaba's HK$1bn startup fund to promote entrepreneurship in the cities youth will also go a long way to ensuring that the talent pool fills over time.
- Even though there is a shortage of angel investors at present, and subsequently a gap in seed funding, Hong Kong is a financial hub that will gradually start to support the startup community as belief in the scene grows and more innovation takes place, which is something that is already happening.
- E-commerce industry boom set to ignite in 2016
- As one of the hottest verticals in 2015, E-commerce (and particularly cross-border e-commerce) is set to thrive this year in Hong Kong thanks to the city's close connection to the Qianhai New District in Shenzhen. To put things into perspective for you, the total imports and exports of the cross-border e-commerce business amounted to about $133 million in just the first 10 months of last year, four times the total of 2014's haul.
- Double the deal volume
- The deal volume increased by just a little more than 100% from 2014 to 2015. That is a staggering amount of money that exchanged hands and will only get higher as things continue to pick up in the scene.
Admittedly, the road forward for Hong Kong's startup scene is a steep one that still needs to be navigated with care, but the speed at which a lot of the problems it is facing can (and will) be solved is through active participation from the local startup community, the buying power of the consumers its targeting, and above all else, fervent support from the government.
What are your thoughts about the startup scene in Hong Kong? Which of the facts in this infographic did you find most interesting?
Are you thinking of starting a company in Hong Kong soon? Where, and in which industry?
Let us know your questions about Hong Kong company formation, and what you think about the growth of the HK startup scene or which facts/stats you found most interesting in the comments section below...