Doing Business in 
Hong Kong and Macau

Preparing to export

Consultation and bespoke research

There is a range of online information for exporters including advice and guidance on how to thoroughly research overseas markets. Visit: https://www.great.gov.uk/ for more information.

Researching the Hong Kong market

Ideally you should make regular visits to Hong Kong as well as making contact with others in your industry/sector. This will enable you to access the most up-to-date advice and information, and may lead to new insights or at the very least form the foundation for further research.

Visit: https://www.great.gov.uk for information and guidance on how to develop your marketing strategy, competitor and SWOT analyses and customer/market segmentation. The IOE&IT can also offer help with this. Visit: https://www.export.org.uk/.

You will need to determine whether there is a market for your product or service, if your pricing is competitive, and whether to adapt your business model.

The questions listed here should help to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company. You may then want to use this as a basis for developing a formal Hong Kong strategy, although this may not be necessary or appropriate for all companies: Your aims: Do you wish to buy from Hong Kong, sell to Hong Kong or both? Do you wish to establish your own company presence in Hong Kong (for example a limited company, branch office or a representative office)? Do you need to be involved in Hong Kong at all? Do you see Hong Kong as part of a wider plan including e.g. Mainland China, other East Asian or Southeast Asian markets, now or in the future? Your company: Can you carry out a detailed SWOT analysis of your company? Are your competitors already in Hong Kong? If so, what are they doing? Can you carry out a detailed SWOT analysis of your competitors? What are the Unique Selling Points (USPs) of your product or service? Do you know if there is a market for your product or service in Hong Kong? Do you know if you can be competitive in Hong Kong? Do you have the time and resources to handle e.g. the demands of communication, travel, product delivery and after-sales service? Your knowledge: Do you know how to secure payment for your products or service? Do you know where in Hong Kong you should start? Do you know how to locate and screen potential partners, agents or distributors? Have you carried out any Hong Kong-specific customer segmentation, and do you know how to best reach potential customers in-market? It is unlikely that you will have the answers to all these questions at the outset and these ‘knowledge gaps’ could form the basis for further research and investigation. Some of these questions will require quantitative research in your sector, while others involve more contextual and cultural considerations.

Talking to other people in your industry and regularly visiting Hong Kong will give you access to the most current advice and such experience can often lead to new insights and form the basis for further research. 

Guidance on developing an export plan, including marketing strategy, customer segmentation, competitor and SWOT analyses, etc. is available on the https://www.great.gov.uk/ site, and also on the Open to Export site at: https://opentoexport.com/info/export-action-plan/.

One option to test how viable your product or service could be in the Hong Kong market would be to attend trade shows, which are generally held in Hong Kong each year. The Department for International Trade (DIT) provides funding for eligible businesses in the form of grants to enable them to attend trade shows overseas via the Tradeshow Access Programme. Visit: https://www.gov.uk/guidance/tradeshow-access-programme for more information.

The funding helps your business to gather market knowledge, gain experience in attending and getting the most from overseas trade shows, and to receive advice and support from trade experts.

To discover future events and trade missions in Hong Kong and Macau, visit the DIT events portal at: https://www.events.great.gov.uk/ehome/index.php?eventid=200183029&.

For company launches and events held at British Embassy and Consulate locations, contact the Department for International Trade (DIT) in Hong Kong at: https://www.gov.uk/world/organisations/department-for-international-trade-hong-kong#contact-us.

[Source – DIT, gov.uk]

 

Start-up considerations

UK companies can use a number of ways to get started in Hong Kong. However, Hong Kong is a highly competitive and mature market, so you should consider using a local presence such as an agent or distributor to successfully develop your business. In addition, you will need to visit the market a number of times to establish a personal relationship with a business partner.

Distributorship agreement

You should research a number of potential agents or distributors before choosing one, looking, for example, at their local reputation, regional coverage, marketing ability and resources. Beware of agents who are promoting products or services which are the same or similar to yours.

The Department for International Trade (DIT) in Hong Kong can assist in locating and meeting potential agents and distributors. Visit: http://www.gov.uk/world/organisations/department-for-international-trade-hong-kong#contact-us for more information.

[Source – DIT Trade and Investment guide: Hong Kong, gov.uk]

There are various types of company you can start up in Hong Kong, for example:

• a limited company (allowing owners to take advantage of all the tax benefits and concessions available to any fully incorporated business, such as the Closer Economic Partnership Arrangement (CEPA) free trade agreement with Mainland China)

• a branch office of a parent company (for companies incorporated outside Hong Kong)

• a representative office (useful for companies looking to explore the market before making a larger investment)

Visit InvestHK at: https://www.investhk.gov.hk/ and the Macao Trade and Investment Promotion Institute (IPIM) at: https://www.ipim.gov.mo/en for more information about the types of company you can start up, the registration process, fees and processing times.

You can avoid costly mistakes by seeking help and advice from a local lawyer, as the tax and legal obligations of each business structure can differ. A list of local lawyers in Hong Kong is available at: https://www.gov.uk/government/publications/hong-kong-list-of-lawyers, and in Macau, at: https://www.gov.uk/government/publications/macao-list-of-lawyers.

[Source – DIT Trade and Investment guide: Hong Kong, gov.uk, InvestHK, Macao Trade and Investment Promotion Institute (IPIM)]

You may also consider direct exports and sales, licensing or franchising for some products and services.

 

Direct exports and sales

Direct export means supplying your products/services directly to the customer and involves you taking care of the logistics of marketing, selling, sending overseas and getting paid.

You also have the option to use local representation, for example by using an agent, distributor or wholesaler.

To help you to identify local representatives in Hong Kong, contact a specialist trade adviser at the Department for International Trade (DIT) at: https://www.gov.uk/overseas-customers-export-opportunities.

Online selling

The Department for International Trade (DIT) can help you export your goods to Hong Kong through the E-Exporting programme. Find out more at: https://www.gov.uk/guidance/e-exporting.

DIT has also negotiated listings at better-than-commercial rates. See online marketplaces in Hong Kong at: https://www.great.gov.uk/selling-online-overseas/.

Franchising

Hong Kong is the top shopping destination for over 56 million global visitors. For information on franchising, visit the Hong Kong Franchise Association site at: http://www.franchise.org.hk/en/index.html, the Macao Trade and Investment Promotion Institute (IPIM) at: https://www.ipim.gov.mo/en/services/business-development-services/business-opportunities-information-development-services/franchising/ and the international section of the British Franchise Association website at: http://www.thebfa.org/international.

[Source – InvestHK, Macao Trade and Investment Promotion Institute (IPIM),Hong Kong Franchise Association, British Franchise Association]

 

Financial considerations

Getting finance to fulfil an export contract

Globally, Hong Kong ranks 4^th out of 190 economies in the World Bank’s 'Doing Business – Ease of Getting Credit' report 2019. See: http://www.doingbusiness.org/en/data/exploreeconomies/hong-kong-china.

There are schemes available to simplify the growth of your business and to fulfil an export contract, for UK companies that wish to sell products and services to Hong Kong. Contact your bank or financial adviser for more information about any current schemes.

Payment risks

UKEF helps UK companies to get paid by insuring against buyer default.

You may have difficulty accessing foreign exchange. Be confident you will get paid for your export contract. Speak to one of UKEF’s export finance advisers at: https://www.gov.uk/government/publications/find-an-export-finance-manager for free and impartial advice on your insurance options, or contact one of UKEF’s approved export insurance brokers at: https://www.gov.uk/government/publications/uk-export-finance-insurance-list-of-approved-brokers/export-insurance-approved-brokers.

Transferring money

By offering a highly transparent and robust regulatory regime for financial service industries such as banking, securities and insurance, Hong Kong has long been the region’s leading financial hub, adhering to the best global practices and giving confidence to all those looking to do business there. 

[Source – DIT, UKEF, gov.uk, InvestHK]

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