Skip to content

5 Reasons to start your Ecommerce or Online Business in Hong Kong

Wondering what benefits an online business brings to you as compared to a traditional one? Well, an online business has it all in its name. It is online, which means that you do not have to deal with maintenance issues, paperwork and you can open the business at home as well. There are a lot of perks that come along with starting an online business in Hong Kong and this article gives you a proper insight regarding it.

But before we move ahead, there are some things that you need to keep in mind. Do not believe in the myth that you are free from the requirements that every other company has to adhere to. Operating a business that is online does not guard your business against any of the regulations that a brick and mortar company frequently face. It is still essential for your business to pay the taxes, get all the business permits, and adhere to the other requirements as well.

Nonetheless, you can significantly reduce the susceptibility of your e-commerce business to such requirements by having it registered with a jurisdiction that would support the growth and establishment of internet companies.

And talking about a suitable jurisdiction for your company, Hong Kong is one of the best places where you can easily start your online business. This country is a global business hub that is well known for its very efficient banking system, incredibly favorable tax regime, and a highly-advanced information and technology infrastructure.

Hong Kong Online Business Stats

As per World Bank, Hong Kong is ranked the fourth country for doing an online business efficiently and easily. But that is not all! There is an online information portal called the Statista that has a report on Hong Kong’s e-commerce market, which states that the market is expected to expand at a highly impressive rate of 10.5% annually till 2021. With a growth rate like this, we can understand that many e-commerce businesses are being incorporated in Hong Kong at a fast pace.

What makes Hong Kong the best place for an internet-based business? Here are some stats that can help you know better:

  • ICT (Internet and Communication Tech.) spending: 6,273 million
  • Hotspots established by Govt. and private sector: 31,879
  • Internet usage rate for all business sizes: 74.8%
  • Penetration rate of PCs for all business sizes: 75.2%
  • Penetration rate of broadband: 83.3%
  • Penetration rate of mobile subscribers: 240.2%

And with the figures mentioned above, it can be seen how Hong Kong clearly has a bright scope in the e-commerce industry. Moreover, the central consideration that many online business owners worry about is the investment. People feel that only wealthy business people can start an online venture around the world or from a powerful country.

The name sells, and it is true, but that does not stop others from starting a business in a powerful country. Hong Kong is the place where anyone can easily open an online business and without much investment needed. While you sit at your home comfortably in front of your laptop, you can enjoy the same benefits as enjoyed by the powerful and wealthy companies.

Online Business in Hong Kong

Why Hong Kong for Online Business?

Here are the reasons why it is the best choice to incorporate your online business in Hong Kong, and why your search for the right country needs to end here at Hong Kong.

1. Advanced Information and Technology Infrastructure

For a person to run an online business properly and to make it successful, there have to be data centers, reliable servers and every other piece of internet infrastructure for it. And Hong Kong has all of these which include:

  • Free flow of information – It is obvious that an online business can only thrive if there is a free flow of information. For example, Google was forced to move out of China due to the content censorship laws in the country, which does not allow the freedom of speed and the free flow of information. However, Hong Kong has laws that support the free flow of information where there is no interference in the online business operations, as it is a separate jurisdiction than the rest of China.
  • Data Privacy – Even though the online business has to protect the information of the customers, it is at times difficult if the company has been registered in a jurisdiction that has weak data protection laws. In Hong Kong, the privacy laws are very strict which does not permit any unauthorized person or even the government authorities to access the data center.
  • Power Supply – Electricity powers the infrastructure of the internet. If there are power disruptions that take place every now and then, it would affect the accessibility of the online business. In Hong Kong, you can easily enjoy continuous and reliable power supply. Moreover, in case of any unplanned cut in the electricity, the entire cut lasts for a maximum of 3 minutes.
  • ICT Talents – For growing your business online, there would be a need to get a team together of qualified IT specialists like engineers, designers, and developers. And with the multiple and numerous professionals in Hong Kong, you can easily build your team here.
  • Internet readiness – As per the Hong Kong office of the Chief Government Information Officer, the speed of Internet in Hong Kong is 114 Mbps on average, which is the second fastest internet speed in the world. And this means that your online business would be the best when the visitors can easily access it without delay. Other than that, you can connect with many reliable companies that offer data storage services and hosting services.

2. Efficient Banking System

When you are setting up an online company, you need every option open for you since the world would be connecting with you and your services. Hong Kong has a sound and efficient banking system, where about 71 of the world’s 100 largest international banks are here. Just make sure that your company is properly registered so that you do not have trouble opening a bank account.

3. Stable Jurisdiction and Good Reputation

A business will have difficulties in becoming a success in a jurisdiction that has political instability. Political unrest always brings situations where the internet gets blocked, or some websites access are denied. With all this, the online business would not be able to operate as desired.

Even though China has its own troubles, Hong Kong has a completely different independent political environment. Due to its free market economy, Hong Kong has been growing as a much-preferred destination for many global companies that are seeking to set up their regional headquarters in the Asia-Pacific region.

Moreover, the country has a reputation for excellent governance, which means that you would not encounter any corrupt officer while you do business here. As per the Transparency International’s 2015 Corruption Perception Index, Hong Kong was one of the top 20 countries that were least corrupted, where China ranks as the 83rd.

4. Easy Company Formation

Other than the things mentioned above, you might already have an idea that the formation of a Hong Kong company is an easy process. Which also means that you can sit in your hometown and still open a company in Hong Kong.

Taking the help of a professional like Startupr, you can have your application reviewed within one day to have the certificate of incorporation issued to you immediately after being approved. In short, for opening an online business in Hong Kong and a week to have the company papers ready in your hand.


5 Reasons to Start Your Online Business in Hong Kong Click To Tweet


5. Favorable Taxation Policy

own a business in a place where the corporate taxes are not extremely high. Hong Kong does not impose the corporation tax on a company if the profits that are earned are from out of Hong Kong. So, what does this mean for those businesses that have sale activities on the Internet?

Well, if you are selling the services or products to the Hong Kong residents (be it on the Internet or otherwise), you would be taxed for it, but if it is out of Hong Kong, you would not be taxed for it.

Other than this, the country also has zero:

  • Capital gains tax – In case you sell parts of the property of your company (something that is a non-inventory asset), your profits from it would not be taxed with the Value Added or Sales Tax.
  • Withholding taxIn case you choose to list your online business publicly in the Stock Exchange of Hong Kong Limited, you would not have to withhold any of the taxes for the payments of the share dividends to investors.
  • Estate duty/Inheritance tax – The overall property of your company would not be subject to the estate tax. Your selected beneficiary would take over all the pieces of the business.

It is not just the low-tax system that makes the environment of Hong Kong the best suitable option for an online business. The IRD of Hong Kong has also made everything transparent regarding how it promotes and strengthens the tax administration processes. And with all the reduced tax, it would be easy to not only set up your online business in Hong Kong but also to grow the business easily.

With these reasons on why Hong Kong is the best place you can start your online business, it would be the best environment for your business. And when you are ready with your plan, Startupr can assist you with the incorporation and the registration process. Connect to know more about our services!

Get more helpful tips

Like what you're reading? Get fresh tips to start & grow your company.


Similar posts