August 12, 2020

Reflection Group

Business, BtoB, Health

Why Hong Kong Emerged the World Most Competitive Economy?

Business Investment Visa: The Baseline For Approval

Business investment visa was introduced by Hong Kong administration to leverage economic growth. Unlike other countries that have land for agriculture and minerals, Hong Kong is very small and can only generate revenue from businesses.

Therefore, Hong Kong administration had to get extra creative to sustain fast growth and stay ahead of others. To achieve this, it supports businesses that want to come and invest there. One of the ways of entering and doing business in Hong Kong is through a business investment visa. Here is the baseline for getting your business investment visa approved.

Ability of the company to create jobs for Hong Kong residents 

For an economy like Hong Kong that entirely relies on business to generate revenue, any effort to create employment is welcome. Therefore, if your business proves that it will create employment for the local people, the application of your entrepreneur visa in Hong-Kong will be passed very fast.

A good business structure 

The Hong Kong administration can only be sure that your business will have a positive contribution to the economy if it has a good structure. This means that the departments, positions, and entire operational structure are well defined. It is also important to point at areas the structure will be expanded to cater for the anticipated growth.

Appropriate operational framework detailing focus on compliance with local laws

Just like other companies operating in Hong Kong, the commitment to legal compliance can only be assumed to be true if there is a specific unit for it. For example, the company secretary can be given more authority to link with the top leadership and work with all departments. This means that every arm will contribute positively and legally while tax will be remitted on time.

Demonstrate capability to outsource the required funds 

A good company should be able to meet all its expenses and mobilize additional funds to spur rapid growth. When defining the business structure, make sure also to indicate the resources available at the beginning of operations.

More importantly, you need to point how you can mobilize additional resources for faster growth. For example, how can you raise additional cash when a new contract requiring a lot of cash comes your way?

3 Mistakes To Avoid When Picking A Hong Kong Company Secretary

When an offshore Hong Kong company starts operations, the role of the company secretary becomes very clear. The secretary is required to register the company with IRD and ensure that it is fully compliant with all existing laws.

To make sure that the company operations run smoothly, it is prudent to pick the right company secretary. However, many investors make the mistake of rushing the selection and ending up with the wrong person. Here are 3 mistakes must avoid when picking a company secretary.

Picking a person simply because he/she is close to the shareholders

In the past, investors preferred to use people they were close to for influential positions such as directors and company secretaries.

However, simply picking a company secretary because he/she is a close relative will be a huge mistake. The person will not have the required knowledge and capability to support the company at different levels. If you must use a close relative or an agency, it is important to ensure that he/she is duly qualified for the position.  

Not factoring the long-term company targets when picking the secretary 

Every employee you pick, especially those on top management, should be in line with the company’s long term orientation.

If you do not factor the long term targets, there is a likelihood that the company may lose track and stagnate. Before confirming the position of a company secretary, make sure to insist that his plans match well with the long-term orientation of the offshore company.

Using a shareholder with no understanding of Hong Kong market

If you pick a company secretary who does not understand the Hong Kong market well, the chances are that you will not get the great services.

The return on investment might not be realized. To know that a secretary understands the Hong Kong market well, he should have been there for some time and worked in a similar position with good results. If you find it difficult to pick the best company secretary, consider using agency services.

Since Hong Kong gained its independence in 1997, the focus has been creating structures and systems that can help it remain a global hub for business. Now, these efforts have been reflected in the 2017 review by the International Institute for Management Development that ranked Hong Kong number one after beating other 63 states included in the study.

This does not come as a surprise. In the last two years, Hong Kong ranking ranged from position one to three except in 2014 when it slid to number 4. This is a clear pointer of the global recognition of the deep roots and frameworks that Hong Kong has installed.

The main factors that catapult Hong Kong to position one

The International Institute for Management Development uses four indicators when evaluating states of their economic competitiveness.

These indicators include infrastructure, business efficiency, government efficiency, and economic performance. Out of these four indicators, it was only one pillar that Hong Kong performed dismally.

  • Government efficiency: Hong Kong emerged position one because of its support systems that have been installed and tested for many years.
  • Infrastructure: The performance of this indicator improved slightly compared to the 2016 ranking. It came up from position 21 to position 20.
  • Business efficiency:  This is the indicator that won Hong Kong most points because of the commitment to support businesses. Whether at startup or any other level, the Hong Kong administration has demonstrated its commitment to ensuring that success is achieved.
  • Economic performance: This is the only indicator that took a dip in the survey. The performance took a nosedive from position 5 in 2016 to position 11 in 2017.

The top ranking of Hong Kong economic competitiveness was slightly shadowed by the poor show in the digital competitive economies.

Even as Hong Kong celebrates, it must look at the main causes of a poor show in the alternative ranking to continue ranking at the top.