In November 2017, Hong Kong was named among the top investment destinations by World Bank. But this was not a surprise. In 2016, 2015, and 2014, it was also ranked top by World Bank and other globally renowned institutions on the ease of doing business index.
Every economic aspect in Hong Kong is geared towards helping businesses grow and become successful. Because of this ease of doing business, more enterprises have been knocking the door to enter, do business, and become multinationals. You can also achieve the same greatness.
As you purpose to go to Hong Kong, it is important to appreciate the stiff competition in most niches. Whether you are in the fashion industry or telecoms among other niches, the chances are that others have already installed similar businesses. Therefore, you must be prepared appropriately. Some enterprises fall by the way after entering Hong Kong because of making grave mistakes that could have been avoided. Here are some things you need to avoid at all cost.
Buying a shelf company
The process of registering a company in Hong Kong might appear lengthy. Because of this, some investors opt to use the shorter route of buying a shelf company. These are companies that were registered in Hong Kong but the owners no longer need them. Even though the process sounds straight, it will later become very murky.
Even if you succeed changing the details of the company, banks rarely accept to open accounts under new owners. This will result in having a company that cannot transact. The interesting thing is that most banks will not tell you the actual reason for declining to open bank accounts for you. Rather, they will only decline. Therefore, it is advisable to consider incorporating a company right from scratch.
Acquiring a Hong Kong company with bank account
The last couple of years have seen most banks become extra critical before opening bank accounts for enterprises. In some cases, the bank accounts are being terminated. Therefore an investor might consider buying a Hong Kong company with bank account. But this is a grave mistake.
A closer look at the company registration process reveals that the procedure is highly specific. This implies that the directors, company structures, and other details go hand in hand in determining whether a bank will accept to open a bank account. Now, if you buy a company with bank account, everything changes. From the details at the company registry to the bank account, the process of changing to new owners is herculean and almost impossible. If such a process goes through, the banks are also likely to terminate the account.
Instead of considering purchasing a Hong Kong company with bank account, the simpler, faster, and direct route is registering a company. In fact, you can even hasten the process by using the services of a company registration agency. Do not simply rush to buy a company that has very high risk of becoming impossible to run. Rather, registering a new company allows you to factor everything including name and structure with the short and long-term projections.
Failing to plan before venturing into the Hong Kong market
A closer look at businesses that have become very successful after entering into the Hong Kong market reveals that they had very good plans. If you do not craft a winning plan, the Hong Kong market is likely to be a hard nut to crack. Do not simply assume that things will flow smoothly from the first day of operations. Rather, you should plan carefully by setting aside ample resources, carrying progressive studies, and working with professionals.