Business

The purpose of this section is to provide comprehensive details required for starting a new business.

The purpose of this section is to provide comprehensive details required for starting a new business. Hong Kong is a famous city for its rustic charm, sophisticated metropolitan lifestyle, shopping, and extremely delicious food. But there’s one other thing for which Hong Kong is Additionally, this section will also cover the entire process of starting any business in general. The process will cover how to start a business, some of the best banks for start-ups, accounting and tax information for business, licenses, and regulations required for business. Additionally, it also covers marketing and promotion options available for business.

Even though it offers a good starting point for the first step, we recommend you to refer to additional information if you are launching a new business in Hong Kong.

How To Launch A Food Business In Hong Kong

Do you live in Hong Kong and are thinking of launching your food business right there? Well, if your answer is positive, then you are reading the ideal article that will help you turn your dream into a reality.

Before we begin, it is imperative to note that residents of Hong Kong are commonly known for the passion they have for food.

This should not be shocking to you as Hong Kong is popularly known as the melting pot of lots of cultures with many diverse and unique food scenes.

While lots of businesses had no choice but to close as a result of the COVID-9 pandemic, licenses for food businesses have heightened in their number. In other news, it means that there is a constant market and demand that is very high.

Starting off:

While starting a food business may look like a difficult task, understand that having a complete view of the procedures and requirements in the food industry will make everything quite manageable.

The starting point for an official restaurant license is to have a well-defined concept of the restaurant with all its details. The license issuing authority is the Food and Environmental Hygiene Department (FEHD).

A “General Restaurant License” is the first one to get. A plethora of supplementary licenses is required to run a successful restaurant in Hong Kong, where licenses are a must for just about everything.

BUSINESS

When launching a food business in Hong Kong, the steps to follow are:

1. Get your certificate of incorporation

For your business to be registered in Hong Kong, you will need to obtain a certificate of incorporation. And, the department that issues this certificate is the Hong Kong Companies Registry. Use the Cyber Search Centre.

To get this certificate, the criteria you need to follow include:

• Select a name for your business

It is vital that whatever name you pick is available. And, you can carry out a free search of all existing company names via the Companies Registry’s cyber search center. • Have your company’s Articles of Association ready, and you can get a sample here. • Ensure you have a bank account open for your business

• Then, register the food business with the Companies Registry by filling out its incorporation form.

When all of these are done, you can proceed to the next step

2. Selecting a Premises

Once the certificate of incorporation is secure, you will have to choose a good location for the premises of the business. Note that you have to do this before applying for the general restaurant license.

As you search for a location, the factors you can put into consideration are:

• The rent

A place like Hong Kong is famously known for being a costly market, especially when it comes to rent. However, make sure you can discover a location that is worth your rent price.

• The location

Avoid choosing a location that is difficult for prospective customers to find.

With so many food businesses available in Hong Kong, customers get easily frustrated if they are unable to find your restaurant.

• The Parking

When your food business’ location is accessible to clients, it can assist in boosting your chances of success.

• The Size

Make sure you have more than enough space not just for the front of the house alone, but for the equipment, an adequate kitchen, storage areas, and much more.

• The safety

You are to make sure the premises you choose has safety regulations they adhere to such as the Fire Safety

Requirements of the fire services department, the Health Requirements of the food and environmental hygiene department, and the Building Safety

Requirements of the building department. Your business plan will assist you greatly as it will act as the financial roadmap for the food business.

Understand that, when you lay out the goals of your business, explore its feasibility and compile everything in a digestible business plan; it will be critical for the success of your business.

Moreso, this business plan of yours should have risk factors and the plans you will use in mitigating them.

For those who will need funding to launch the food business, it will give loan officers and investors the vital data needed to believe in this vision of yours and assist in raising capital.

4. Decide on the business structure

When you are selecting a business structure, you first will most likely have to choose the type of food you want to sell. To do this, you must carry out market research, use a target market, and make plans according to your research.

It does not matter if it will be a home-based food business that exists online or a brickand-mortar fine dining restaurant. There are so many food business structures on which you can decide and some of the prominent ones you will find in Hong Kong are: • Bars and pubs

• Food trucks

• Mom and pop cha chaan tengs

• Buffets Not to forget Cafes, and so much more.

5. Begin application for your general restaurant license

You must apply for all the necessary licenses and permits before you can launch your food business in Hong Kong, irre-

spective of the type of structure you are seeking.

Understand that the most fundamental license for whicht you will need to apply is the general restaurant license that is obtainable in the Food and Environment department.

It does not matter if you are running a bar, catering business, or anything in between, there are special business permit requirements. The step to follow to get your license is to: • Ensure you submit the vital documents

In a bid to obtain the General Restaurant License successfully, you will need to submit some documentation, such as:

Your filled-in General Restaurant License application form.

An authentic certified copy of your record of ownership or a stamped tenancy agreement of your business premises

One copy of the board resolution that confirms the validity of an entitled person to represent your business during the license application procedure

One certified authentic copy of the most recent Annual return of your company

An original accredited copy of the Notice of Situation of the registered office

The certified original copy of the Articles of Association of the business

The certified original copy of the Business Registration certificate of the business

The certified original copy of the Certificate of Incorporation of the business, and

Three authentic certified copies of the calculated metric layout plan of the premises. It should display the layout of the toilets, refreshment area, stores, preparation area, the kitchen, and much more. Your layout plan will need to comply with the minimum lawful conditions that are being set out by the FEHD.

Note that immediately after the documentation is received by the FEHD, copies will be sent to the Buildings Department and Fire Services Department for approval. For issues on permits and licenses, you can check it out here. License for storing liquor

6. Outdoor Seating Accommodation

License

To let customers dine outside, the Permission for Outdoor Seating Accommodation License is mandatory. The license is issued by the Director of Food and Environmental Hygiene.

7. Composite food shop license

If vending machines are used within premises for selling food, a composite food shop license is necessary. The application procedure is the same as other license applications.

8. Hire the ideal people

A basic aspect of running a food business lies in hiring the ideal people. This is vital because the food business demands amazing customer service and very low wait times.

Always have it in mind that you must hire people who have an understanding of how to hustle. In the food industry, note that you are not merely selling food but providing an experience.

For those without a kitchen crew at their disposal, the first step in getting the ideal employees is to create a job posting or ask through word of mouth.

Since the food industry is a saturated and competitive market, you must market the foods well enough to differentiate your brand from all others.

You can do this by making special packaging, making use of social media platforms, blogging, or even working with famous lifestyle magazines for their paid advertorials.

Note that some of the prominent magazines for foodies are Foodie Magazine, Sassy Hong Kong, and even Hong Kong Desi platforms. Moreover, you can work with grocery stores, farmers’ markets, and food expos.

As in a fast moving city, technology is a part of its restaurant experience, so you can incorporate technology in your new food business. Some of the technology you can use in implementing this range from;

• POS

• PhotoMenu

• Queue Ticket Kiosk

• Kitchen Display System

• Online Delivery, and much more.

Conclusion

In all honesty, launching a food business is quite lengthy and demands lots of hard work. However, with the right information and team, you can get it right. In this article, we have outlined some steps you can follow before you begin the launch.

Let’s dive in!

BUSINESS

Basics of business registration in Hong Kong:

There are several kinds of business that can be started in Hong Kong.

1. Limited Company

A limited company is the most popular business in Hong Kong. Limited companies benefit from: i. Free trade contracts with China. ii. Similar tax benefits are enjoyed, just like the local entrepreneurs.

2. Branch Office

A branch office of another company that is registered elsewhere can be opened in Hong Kong. However, it comes with a specific set of instructions, and it is dependent on the parent business.

3. Representative Office

There is a limitation on establishing a representative office in Hong Kong. The business is not allowed to participate in activities that generate profit within the scope of taxation, hence is appropriate to non-sales firms like marketing and support staff.

A word caution is a Representative Office does not have independent legal standing in Hong Kong. Therefore, the foreign parent company remains fully responsible for its debts and liabilities.

4. Sole proprietorship

Appropriate for small businesses with a single owner. It is a low-risk business, but owner is liable for its assets and businesses.

5. Partnership

Operated with at least two persons. It is the least favourite because each partner is liable for the firm.

Procedure

i. The selection of a name is the first step to start a limited business. The name must be legally available in Hong Kong and found at https://www.cr.gov.hk/ en/electronic/csc/general.htm ii. Download and complete form NNCI or incorporation form from https://www. cr.gov.hk/en/services/register-company.htm iii.Download and fill form IRBR1, which is the notice to the Office of Business

Registration. iv.Submit the filled forms electronically alongside a copy of the business Articles of Association to the Companies Registry at https://www.eregistry.gov.hk/

Registering a business

Business registration is done at the same time as when applying for incorporation at the Inland Revenue Department.

a. The Inland Revenue Department requires payment of HK2000 dollars per year or HK5200 dollars for three years as a business registration fee, as indicated on its website. b. The Protection of Wages on Insolvency

Fund requires a business owner to pay

HK250 dollars per year or HK750 dollars for three years as a levy. c. Collection of business registration certificates It takes just an hour to register a business online if all the documents are approved, but it takes up to four days when the documents are mailed.

Useful Resources:

Revenue Office:

Address: 4th Floor, Revenue Tower, 5 Gloucester Rd, Wan Chai, Hong Kong Website: www.ird.gov.hk Tel: (852) 2824 1482 General enquiry: (852) 2519 9316

Website for business registration

Website: www.cr.gov.hk

Company of Registry:

Website: www.eregistry.gov.hk

Licenses and regulations in Hong Kong

A business license is required to run a business in Hong Kong. The agencies or departments of Hong Kong are the ones that issue licenses.

However, the Companies Registry first requires the registration of a business before applying for a business license. This article will explain the most common licenses and regulations in Hong Kong and, where necessary, links are provided for detailed information. Generally, it takes two to eight weeks to get a business license in Hong Kong. The license requirements and regulations for operating various businesses are as described below.

a. Trading Company

The need to obtain any export or import license depends on the type of goods involved. Controlled goods need the pertinent export or import license associated with the goods.

b. Event Management Business

Regulations and licenses for event management depend on the type of events. For example, the Liquor Licensing Board issues liquor licenses to sell liquor for consumption during an event.

c. Financial Services Firm

An entrepreneur is required to obtain relevant licenses depending on the kind of financial services to be provided. The Hong Kong Police issues a Money Lenders License to carry out a money-lending enterprise.

d. Retail Shop

Requirements depend on the type of services and goods sold. The Department of Agriculture, Fisheries, and Conservation issues licenses on Animal Boarding Establishments to operate retail pet shop.

e. Education Business

The Hong Kong agencies have recommended specific entry requirements to streamline the education sector. The education business is perceived as a lucrative business. A Certificate of Registration must be acquired from the Education Bureau.

f. Travel Agencies

A Travel Agents License is required to operate a travel agency. The license authorizes the arranging and selling of transportation tickets and organizing package tours or group tours.

g. Employment Agencies

The Labour Department issues an Employment Agency license to operate a business that offers placement and recruitment services in Hong Kong.

h. Restaurant Business

The Department of Food and Environmental Hygiene issues a license for a General Restaurant to sell drinks and food. The inspection of the premise is done before the issuance of the license. The license is not sufficient condition to operate other businesses, like selling liquor. Additional licenses, such as a Liquor License, are required.

The licensing procedure and regulations in Hong Kong are straightforward. However, you need to comply with all criteria and documentation requirements and follow the licensing procedure. All said and done, there will be no reason for license rejection.

Useful Resource:

https://www.fehd.gov.hk/english/ howtoseries/forms/new/A_ Guide_to_Restaurant.PDF

Best Banks for a Start-ups in Hong Kong

Although Hong Kong offers a business-friendly environment, it is very difficult to open a bank account, especially if you have a start-up business in Hong Kong.

Unlike the USA, India, or European countries, where you can open a bank account easily within a week, Hong Kong takes 6-8 weeks. This is extremely discouraging process to new businesses.

We compiled a partial list of local banks in Hong Kong that are start-up friendly. In addition to the regular documentation process, these banks may have their own pre-conditions, such as the owner having a saving account, maintaining a minimum deposit, or any other condition that a bank may think suitable as well as can be applicable to start-ups owners.

Although, Hong Kong offers a business-friendly environment, however it is very difficult to open a bank account, especially when you are launching a new business in Hong Kong. Unlike USA, India or Europe, where you can open a bank account easily within a week, Hong Kong takes about six-eight weeks (and sometimes up to three months) to open business account. To facilitate the entrepreneurs, the Hong Kong Monetary Authority established a dedicated task force.

Documentation Requirements to Open Bank Accounts

a. Identity documents and notarized proof of residence of all directors b. Corporate documents that are certified c. Notarized proofs of business address d. Past three months’ statement copy of Ultimate Beneficiary Owner (UBO) personal bank information e. Latest financial statements that are audited

Types of bank accounts

a. Savings account offers interest not provided on the current account b. Current account allows payments using cheques, but does not pay interest c. Time/Fixed deposit account; a sum of money is left for a specified period d. Non-HK Dollar deposit account gives the client a wide range of options to hold finances in foreign currencies e. Integrated account consolidates different bank accounts into a single account f. Investment account

It helps to sell or buy bonds, trade stocks, and unit trusts.

For more details on types of accounts and the requirements, access the website: www.ifec.org.hk

More banks are listed in the directory section.

Useful Resources

Hong Kong Monetary Authority (HKMA)

Account opening tips: Link: https://www.hkma. gov.hk/eng/smart-consumers/ account-opening/mr-opensblog/tips-for-start-ups-toopen-bank-accounts-offeredby-an-entrepreneur/

To appeal against bank application rejection case: email accountopening@hkma.gov.hk

Bank Bank of China (Hong Kong)

Minimum balance requirement: you need to maintain HK$ 50,000 to avoid monthly fee of HK$ 120. Website: www.bochk.com Address: 1 Garden Road, Hong Kong Tel: (852) 2826 6888 Customer Service Hotline +852 3988 2288

HSBC

Minimum balance requirement: you need to maintain HK$

50,000 to avoid monthly fee of HK$ 100 per month. Website: https://www.business. hsbc.com.hk/en-gb Address: 1 Queens Road, Hong Kong Tel: (852) 2748 8288

Indian Overseas Bank

Website: http://www.iobhongkong.com 3F, Ruttonjee House 11 Duddell Street, Hong Kong Tel: (852) 2522 7157 You to maintain minimum HK$ 10,000 balance to avoid bank fees HK$ 100 per month. Website: www.hkbea.com Address: 10 Des Voeux Road Central Hong Kong Tel: (852) 3609 2928 General banking services 24 hrs. : (852) 2211 1333

More banks are listed in the directory section.

Accounting and Tax in Hong Kong

Accounting and tax in Hong Kong rely on British standards. For example, all businesses are required to file an annual tax return with the Hong Kong Inland Revenue for their profits. Independent certified public accountants perform yearly audits for the business accounts. Hong Kong is cautious about tax fraud and accounting. Offenders are subjected to strict sanctions from banks and the local government. Fundamentally, all accounts are filed attentively and professionally to mitigate issues that are likely to arise from the audited annual accounts. Individuals who have resided in Hong Kong for about two months are expected to pay salary tax. The salary is taxed either based on standard rate of 15 % or between 2% and 17%, depending on the level of income. You are required to pay a stamp duty of 15 % when you buy property in Hong Kong. Returns are filed before the second day of June, whereas sole proprietors for unincorporated organizations have until the second day of August.

Net Chargeable Income (in HK$ currency) Rate

0 – 50,000 HK$ 2%

50,001 – 100,000 HK$ 6%

100,001 – 150,000 HK$ 10%

150,001 – 200,000 HK$ 14%

Above 200,001 HK$ 17%

Net total income (no allowances) Standard rate 15%