Doing Business in Hong Kong

People doing business in Hong Kong by Yoel Ben Avraham
Expats doing business in Hong Kong find themselves exposed to a laissez-faire economy that is, by some measures, one of the most open and transparent in the world.
 
Despite its proximity to Communist China, its status as a Chinese Special Administrative Region operating on the principle of "one country, two systems" means that Hong Kong is a world apart from the mainland. This is seen in the local government's respect for private property and personal freedom, and its emphasis on non-intervention in the private sphere.
 
In fact, partially because of their historical ties, Hong Kong seems closer to Britain, in that they share virtually identical company and trust laws, and a largely similar business culture.
 
Hong Kong retained its position in the World Bank's Doing Business survey for 2015, ranking as the third easiest country out of 189 to conduct business in. The region scores particularly high in key business areas such as dealing with construction permits, cross-border trading, starting a business and enforcing contracts. This is facilitated by its excellent infrastructure, an emphasis on free and fair competition, sophisticated financial networks and a well-educated work force.
 
It is hardly surprising that the region is a key financial hub in Asia, acting as a point where Eastern and Western business interests intersect. It continues to emerge as a key business destination and a magnet for global capital and multinational businesses. Although this Asian economic tiger may be familiar in certain ways, expatriates should make themselves aware of the nuances of conducting business in Hong Kong, if they want to be truly successful and respected in their new business environment.

Business culture in Hong Kong


Commerce buildings in Hong Kong by Ray Devlin

The business culture in Hong Kong tends to be conservative. Business people are expected to dress in formal suits and their conduct is expected to be professional at all times. Punctuality, mutual respect and deference to seniority are all valued principles and are widely practised. 
 
The Asian concept of “saving face” applies in Hong Kong, so expats should avoid embarrassing or confronting other people at all costs. Bad news should never be presented in front of others. Containing emotions is also very important as anyone who openly displays anger or irritation is likely to make a bad impression, causing the person losing their temper to lose face as well.
 
Westerners aren't necessarily expected to bow when greeting local associates, although if no handshake is offered a bow is appropriate. It should be noted that handshakes in Hong Kong may not be as firm as expats might be used to. Associates may avert their eyes when greeting as a sign of respect and, while this won't necessarily be expected from an expat, it is a good idea not to hold their gaze too strongly. Similarly, a moderate amount of eye contact is suggested during conversations. It is also seen as a mark of respect when greeting or thanking someone to say their name.
 
Expats should pay close attention to their choice of words and the way in which they are conveyed. Using confrontational or vulgar language, especially expletives, is a sure way to lose face. Poor choice of words, or even tone of language, can be enough to sever a relationship with a business. It may not be evident at the time, but the message will become clear as future efforts to meet or do business are continuously deflected. This, on the other hand, will be because Hong Kong Chinese will be intent on saving face for all parties involved and will very rarely directly give a negative answer.
 
On another note, while physical contact, especially between people of the same gender, is fairly common in a social setting, it should not extend beyond a handshake in the business setting– most people dislike being touched by strangers. Conversely, people in Hong Kong might hold conversations at a much closer distance than some expatriates will be used to.
 
Business meetings in Hong Kong are often accompanied by generous servings of tea. It is, however, impolite to take a sip before the host, or the most senior person present. Expats living in Hong Kong will also find that they're quite often asked whether they've eaten yet by locals (presumably in Cantonese). This is, in fact, a subtle form of greeting and not an invitation to speak at length about one's most recent meal.
 
That said, expats can expect to be invited to social occasions by their business associates. These should always be accepted as personal relationships are valued and these events, usually lunch or dinner, are a good way to build business connections. It is likely that expats will be invited to drink. For those worried about saving face, the best way to refuse is to cite health reasons.

 

Attitude towards foreigners in Hong Kong

Hong Kong is one of the world’s most international cities and expats are integral to its economy. Foreigners are unlikely to experience prejudice or hostility although observing cultural etiquette is vital in ensuring equitable treatment.

 

Starting a business in Hong Kong


Hong Kong climbed a place in the World Bank's Doing Business survey for 2014, and is considered to be the 5th easiest place in which to start a business. The entire process can take less than three days and entails three simple procedures – choosing a company name and obtaining a certificate of incorporation; signing up for employee insurance and a Mandatory Provident Fund (MPF); and having a corporate seal and rubber stamp made.
 

Doing business in Hong Kong: Fact facts


Business language: Cantonese, Mandarin and English. The larger the company one deals with, the more likely that English is spoken. In many cases a translator will be required.

Hours of BusinessMonday to Friday 9am to 5pm; Saturdays 9am to 1pm

DressConservative dark suits; avoid brightly coloured ties. In social settings avoid wearing blue or white coloured clothes as these are associated with mourning.

GiftsGifts are expected during introductions, and on important anniversaries. They should not be opened in the presence of the giver, and should be received with both hands. Avoid giving timepieces as gifts, as they are associated with death. Blankets should also be avoided as they represent a decline in future prosperity. During the Chinese New Year gifts of cash are given to children and people who provide services such as domestic workers.

Gender equality: Women play a significant role in business, but expats may still notice that male colleagues are deferred to in business meetings. In general, Confucian, conservative attitudes toward women will be found in smaller companies.
 

Dos and don’ts of business in Hong Kong


  • Do make casual conversation - but not about personal, financial or political matters
  • Don't expect to get any business done over Chinese New Year
  • Do get a Chinese-language version of your business details printed on the reverse side of your card.
  • Do get business documents printed in both English and Chinese
  • Don't hold back on burping during a business meal – it conveys appreciation
  • Do leave some food on your plate to suggest you have been abundantly fed.

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