Enchanting Hong Kong Business Story Continues
By Industry Leaders Magazine | March 18, 2013 11:55 AM EST
It might be production, finance business, chain of restaurants, importing something.... Whatever your business idea is, there is always a place overseas where you can make it; pursue and develop your idea or just expand your existing business. But you may ask yourself: " So where is the best place to do business? Where should I move my company? Where should I open new headquarters of my company?"
Even though some of entrepreneurs and businessmen say that they were inspired when they visited a place and they discovered the need, it is not always a good idea to make spontaneous (based on your impressions) decisions regarding the place of new headquarters of your company or your business in general. Yet, seeing an opportunity is important, you should, however, also consider other factors regarding the new place for your business as some countries or cities are said to be the best places to do business while other will just give you a headache.
Rankings of the Best Places to Do Business
Existing rankings of the best and easiest places to do business are created, namely, for those who seek the opportunity of expanding their businesses but they are not sure where exactly to do it and which place gives countless opportunities to earn money, just to say it in the simplest way. Unquestionably, rankings, just to mention Bloomberg Rankings or Forbes Rankings are gauges of some kind while searching for better business destinations.
While preparing these rankings, institutions take into consideration many factors, including costs of setting up business, costs of employment, inflation, the degree of corruption, the size of the middle class, household consumption, gross domestic product per person, human capital, infrastructure, the degree of political stabilization, ease of doing business, etc.
Are you thinking: "Right rankings? Do they matter? They ain't have anything to do with a real life!" However, if we look at the top leaders of rankings, we will see countries and cities that are in fact successful. And success does not come from anything. John Wooden underscored once: "Success comes from knowing that you did your best to become the best that you are capable of becoming."
Hong Kong - The City of Possibilities
Hong Kong is one of those places to be said to be the better business destinations. And regardless of a ranking, the city always is among leaders. But this should be no surprise as Hong Kong is both a stronghold of free-market policies and ideas as well as low corporate taxes. And according to many rankings, Hong Kong is definitely one of best places to do business as it is also the gateway to China itself.
Yet 15 years ago, no one was sure whether Hong Kong after returning to Chinese sovereignty would remain its role as an international financial center. Yet countless companies, including General Electric Co. and Gap Inc., etc., chose to do business there, also so-called financial giants, such as HSBC Holdings Plc, have come to the same conclusion and now are listed on the Hong Kong's stock exchange.
Certainly, both the city's reputation for rule of law and corruption-free administration have helped to distinguish Hong Kong from the People's Republic of China. Moreover, Hong Kong as an integral part of China has remained some of its economies freedoms; it can negotiate and sign its own economic and trade agreements and it is a full member of international organizations such as WTO and APEC.
Tomo Kinoshita underlined the significance of the city, stating: "Hong Kong is a gateway to China, it has competitive tax rates and that makes it one of the natural choices for companies to set up their Asian headquarters. It makes sense for companies that want to be close to China as well as the rest of Asia to use Hong Kong as their base."
Strengths of Hong Kong
Hong Kong, the world's 9th largest economy, provides an extremely stable system along with modern infrastructure and therefore it is better business destination. Hong Kong's economy is said to be the most laissez faire economy all over the world as the government strictly and rigorously avoids any kind of interventionism. Moreover, controls and disclosure requirements on businesses are minimal, except for public limited companies. As it is highlighted by analysts, private companies need to meet not too demanding capitalization requirements if they want to do business in Hong Kong. And what is interesting is the fact that if a company wants to incorporate as a wholly-owned subsidiary, no financial statements are needed to be filed which is certainly an advantage.
Because of the fact that Hong Kong's economy is unsurpassed, local and foreign companies create a single business community. The ongoing interactions between local and foreign companies in the city makes Hong Kong's business environment full of growth opportunities as it creates possibilities of international networks, finding new sources of supply or new markets, developing relations with business partners from Honk Kong, China and elsewhere as well.
Not surprisingly, the findings of an annual survey by Invest Hong Kong and the Census and Statistics Department in October 2011 illustrated that the total number of foreign and Mainland Chinese parent companies doing business in the city hit the highest record to date. Furthermore, gathered data indicated the total number of overseas companies with operations in Hong Kong climbed 5.9 percent compared to 2010, to 6,948. The most evident growth was watched in finance and banking sector and as a result, regional headquarters in this field jumped by 5 percent, to 135, while local offices grew by 3 percent to 622.
Certainly, Hong Kong is the best place to do business as so many companies have their offices there which enable them to develop relations with potential business partners. Simon Galpin, Director-General of Investment Promotion, firmly stressed: "Hong Kong is the perfect base from which to access Mainland China. At the same time, Mainland companies are also using Hong Kong as a springboard from which to go global."
Hong Kong, without a doubt, is the better business destination due to its simple tax system and low tax rate. Free follow of information, corruption-free administration, and lack of exchange controls make Hong Kong the best place to do business. However, there also few negative sides of the city, including the fact that housing and office stock is limited because Hong Kong is densely populated. The cost of business space and the cost of living are very high. According to data gathered by DTZ, office locations in Hong Kong are one of the most expensive all over the world. Yet, Hong Kong has been lately dethroned and London has become the city with the most expensive office space.
Hong Kong and Singapore rivalry
The bout between Hong Kong and Singapore does not have its end as the two business destinations have been competing with each other for years. Both Hong Kong and Singapore have been doing whatever it takes to tantalize overseas businesses to invest and open their headquarters. But nothing will change the fact that Hong Kong, however, has a longer history as a financial epicenter and a center for business in general and therefore this is its big advantage. But do not be mistaken by that fact. Singapore has been working to erode the dominant position of the Hong Kong as the best place to do business for a long, long time. The government of Singapore makes everything into its power to attract foreign investors and capital by quickly introducing business friendly approach and ideas as well.
Probably the rivalry between Hong Kong and Singapore would not end soon; we should be prepared for the long war to gain the dominance in the Asia. However we should remember Prince Charles' words that "Hong Kong has created one of the most successful societies on Earth." Therefore we can state straight away: "Hong Kong indeed has created one of the most successful places to do business on Earth and it is arguably the better business destination."