May 8, 2014
In this week’s chapter 27 entrepreneurs share their thoughts on how business mindset works in Hong Kong.
In Hong Kong, the business mindset is open, diversified and innovative that makes Hong Kong a good place to start running business.
First, foreigners are welcome to set up companies in Hong Kong. In other countries, foreign investors might need to have a local citizen partner to run a business according to the local ordinance; however, there is no such restriction in Hong Kong and a foreigner can be the sole director in his / her corporation.
Second, Hong Kong has a free market economy. There are no trade barriers, no tariff policy and no limit for foreign onshore and offshore investments, so that free capital flows are allowed for investments on facilities and labor. According to 2014 Index of Economic Freedom, Hong Kong’s economic freedom score is 90.1, making it the top-rated economy in the Index for the 20th consecutive year.
Third, Hong Kong offers one of the most advanced business infrastructure and system in the world, including world-class telecommunications and connectivity network, low and simple tax regime, free flow of information, and fair and transparent legal system that investors will consider Hong Kong as an ideal base to set up their corporations, and also a stable and perfect stepping stone to enter China market.
Fourth, Hong Kong welcomes high level of creativity and innovation. People with open mindset who are willing to embrace new ideas will be more adaptable to the dynamic and fast-paced environment.
Hong Kong is an incredibly convenient city, and it can be very easy to get things done quickly. Embrace the fast pace and do your best to keep up, or you’ll get left behind.
Because trust and relationships are so important to business in Hong Kong, in person interaction is usually required to get things done. Meetings, transactions, project all get done 10x as quickly if they are done face to face.
While there is a strong western influence in business here the Chinese concept of Guanxi (relationships) is vital. As clichéd as it sounds it’s not what you know, it’s who you know. It may be a city of 7 million but it is made up of many small communities, especially in the sphere of entrepreneurs and startups. Your personal network can open many doors professionally.
The city is incredibly fast-paced and that carries over into every aspect of life, especially work. People expect almost immediate responses to emails and meetings are often rushed because everyone has to run to their next appointment. This level of intensity can get too much if you don’t pace yourself.
Hong Kong is business minded. It can be irritating from a personal point of view but if you’re goal is to focus on developing your ventures, that’s great.
As with most places, your business relationship will always look what’s in it for them. Be patient and as trust takes time to be gained.
I’ve found Hong Kong business people to be very open to the idea of meeting up – people love to hear about new ideas and will make time for you. Expect some time wasters, but there’s no such thing as a wasted meeting as you’ll always be broadening your reach and sphere of influence.
Hong Kong is a small place and you’ll quickly find yourself talking to the right people as long as you keep the momentum up.
There is a shift happening in Hong Kong right now. Traditionally, many people in Hong Kong aspired to work for a large global investment bank, law firm, etc. There was a perceived notion that this represented success, stability, and fulfillment. Nowadays, this mindset is starting to change as jobs in the corporate sector are no longer as stable as they once were and people are finding less fulfillment in working for a big company.
However, that said, the cost of housing in Hong Kong is extremely high. This is definitely a big barrier to entry for the start-up scene, as many people simply cannot afford to take the risk to start their own business with no/little income. This may change though, as younger people start to think about starting their own businesses straight out of school and before they start the journey in the corporate world.
The locals are not easily impressed and very pragmatic. And don’t expect because Hong Kong is a bustling city that decisions are taken quickly. As an entrepreneur, I’ve had negotiations going over for a year…
Everyone in Hong Kong is busy and no one wants to allocate time to your cause unless you provide a full-on, hands down service that will not take up much of their time. That is the reason why Hong Kong is so service-oriented.
Try to build up some wins, some case studies before you go meet potential customers. Simply put, Hong Kong is unfortunately not that open-minded and the hardest part is always to get that first ball rolling, right?
Hong Kong is a very fast-paced environment and thus practical thinking rules a lot of decisions. Creating and delivering value doesn’t get the same amount of attention as e.g. in Europe, but has improved a lot over the last years.
The trend now moves from the quick and dirty towards a more quality focused approach and will continue to do so. Be patient and hang in there!
It is an environment conductive to creativity and business. People are always looking for new opportunities and challenges and will invest in new businesses if they believe it is worth it.
People are here to succeed and create value (a lot of people make a lot of money). As setting up businesses is administratively speaking easy, they are keen on trying and are not afraid to launch their ideas.
Being from France, where nothing is simple when it comes to create a business, I was really surprised on how much more dynamic it is here.
Generally speaking, people work way too much in Hong Kong, and I feel comfortable stating that this is an objective fact. Bringing a workaholic to Hong Kong is like taking an alcoholic to an open bar.
But this provides a great opportunity for entrepreneurs because when you go to recruit talent you can pitch them on more relaxed work hours, which isn’t the case for most people joining a startup anywhere else in the world.
Regarding doing business in general, Hong Kong is divided into two populations–expats and locals. One can do business for decades here almost exclusively with expats who have come from abroad to work here, or work entirely with locals. The expat culture is more like what you would find in any major city in the US or Europe.
The local culture has absorbed a lot of British tradition, having been a colony for so long, or is at least accepting of Western culture, but also retains much of Asian tradition and there are certain traditions, customs, etc. to be aware of when it comes to Hong Kong business etiquette .
I find that local businesses focus very heavily on the bottom line, which is not unexpected, but they do so in a very short-sided fashion. If it doesn’t directly impact their profits or they can’t clearly see how it impacts it, then they won’t be interested in the idea.
For instance, an argument can be made that a local business should have a Facebook page to help them garner more traffic and exposure through the Internet, but they may say the cost of maintaining that site may not be worth it and that it doesn’t directly help drive foot traffic to their store.
Or if you’ve ever stepped into a local Chinese diner, where the staff is very efficient but a little too efficient that they don’t provide the extra customer service to create a repoire with the customer so that they can come back.
Hong Kong is one of the biggest financial cities in the world and everything moves very fast, you need to keep the pace otherwise you lose track. It is definitely a place to get things done, everything is easily assessable, the place is very international, and everyone can speak English.
The business mindset here is generally very welcoming, especially, when new comers join a coworking space, the coworkers are very open minded to welcome them, discuss and share their experience, and later, a lot of them build a relationship and become some sort of business partners, vendors or customers, etc.
Quick & high returns: Hong Kong mentality is quick and high returns on investment. One year is considered as a long-term.
Save money: Even if it means to stand in a 1 hour line at a money exchange that gives 3cents better then the next door.
Two extremes: Hong Kong business mindset demonstrate two extremes, love to gamble, very speculative but at the same time want guaranteed and secured returns if investing in startups.
Up-to-date with technology: Hong Kong businesses are technically advanced and they use all sorts of technology to manage there businesses and finances.
You really can get things done in Hong Kong and business can move pretty fast. Understand how you are going to develop your team quickly and get to grips with managing people. Be prepared for turnover but focus on minimising it as fast as possible.
Hire local, There are great people in Hong Kong and often expats are not going to be worth the premium in the startup world.
Hong Kong is a world renowned financial center. People are efficient and business oriented.
Efficient – people here are to the point, decisions are made fast.
Business oriented – people here make decisions largely based on metrics, efficiency and monetary potential.
Visions and aspirations are less valued in this commercial world. This is very different from places like the Silicon Valley.
One thing I noticed is that Hong Kong people really like to meet you face to face when doing business. They do use emails a lot too, but they prefer a face to face meeting more when discussing some new ideas. Whereas, in other countries like the US or Canada, they love doing Skype meetings even if you are just two blocks away. This may have to do with a trust certainty level difference in different countries.
Hong Kongers are born hustlers. The energy here is infectious. Working hard is the bare minimum.
However, in a seeming contradiction, Hong Kongers also seem less prone to evolve commercial structures from the traditional (and wildly successful) mall and retail concept.
This, I believe, will give rise to a new generation of successful ventures for those who adapt traditional businesses to media other than physical retail.
Lesser creativity but lots of efficiency. If your staff are guided, your company should fly.
Similar to Wall Street but worse. People focus more on cash comp and they usually have no idea what they want to achieve in their lives.
Entrepreneurs are usually more secretive about their ideas.
Hong Kong people love to get things done efficiently – maybe not that entrepreneurial compared to Silicon Valley or innovative compared to NYC.
Business is business, and the bottom-line goals of business are the same everywhere. But proportions are different in Hong Kong. Hong Kong’s population is about the same as Hangzhou — a second-tier city in mainland China of about 8 million — and because of Hong Kong’s small size and tight density, time frames and distances are shorter.
I live a 20-minute ferry ride plus a 10-minute taxi ride from my office, which to some friends is much much too far to go to the office. They are used to a 15-20 minute ride. So that 10-minute difference appears very large in Hong Kong.
Business model. Business model. Business model.
While not necessarily a good thing, even the most sophisticated angel investors in Hong Kong shy away from companies without a clear business model.
Since it easy to start a business, there are a lot of first time entrepreneurs. The barriers to entry are lower, people take more risks. This means there can be a lot of mediocre players to sift through but the winners have a real chance.
Hong Kong people are ambitious, hardworking and driven- the city benefits from this great energy that propels it forward and makes you want to achieve something.
It is not for the faint of heart. Compared to other places, it can be more aggressive, more in your face, more money driven. If you want to commit to making it, Hong Kong is a great place to be.
I found the mindset very pragmatic and business oriented. If you can do the job, you have chances to get it. They will not ask for 15 years of experience and many references, depending your business area of course.
As a freelancer, you will have the opportunity to benefit from the efficient networking spirit of Hong Kong. People are exchanging their business cards very often, from early morning until night time ! If you are doing good job, people will spread the word and refer business to you quite quickly.
Hong Kong is an extremely fast paced city. changes are happening all over the place everyday. your business will need to deal with all these different changes somehow.
It could a change of direction in your business/product or just the way how you conduct your business.
Like any business around the world, The pure motivator for Business is Profit. People form HK region have been in trading for centuries, even before some countries were even formed. These people have a historical sense e of doing business and can trade with anyone around the world easily as their ancestors have done before.
Speed-to-trust is a an essential part of the Hong Kongese business culture: they will respond to you with a sense of urgency, unlike India, were it might takes months to get a single response. But they also expect the same kind of respect back.
If you are serious about doing business: you will find great partners in Hong Kong. and if you treat them like true business partners, the benefit will be more favourable on your side Qanxi, or relationship is a common term used in China mostly stands for people they know in China: a Chinese business will drop you in flash if they don’t see business coming from you: but a HK company or business man will stick with you through tough times.
Most people in Hong Kong are willing to help and open with information. You can set up an Limited in 2 days if you really want, but mostly in a week all is done, inclusive bank account.
So the mindset is “business” but there is also bureaucracy, more than you would think. But a max 17% income/corporate tax and no VAT? That’s opening possibilities.
Image credit: stuckincustoms