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    The HK HUB
    Home»HK Living»Tips for Starting an Online Shop in Hong Kong
    HK Living

    Tips for Starting an Online Shop in Hong Kong

    The HK HUBBy The HK HUB2019-10-31Updated:2019-11-19No Comments5 Mins Read
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    freight container ship in hong kong

    If you’ve ever had dreams of living the start-up life and becoming an entrepreneur, Hong Kong may just be the place to make it happen. As one of the world’s freest economies, setting up your very own business in Hong Kong is easy and cost-effective. If you’re ready to make the leap, here are a few tips for starting an online shop in Hong Kong.

    Content of this article hide
    Setting Up Your Business
    Getting a Bank Account
    Taxes
    Sourcing and Logistics
    Starting your Online Shop
    Entrepreneurs – find the latest business networking and training events in this roundup!

    Setting Up Your Business

    The first thing you’ll need to do when starting an online shop is go through the process of business incorporation. Luckily, Hong Kong makes this very easy. If you have everything in order, you’ll be able to complete the process online in an hour. Applying through snail mail, you’ll usually receive your incorporation and registration documents within five days.

    Ready to dive in? First, choose a business name, then file for incorporation through the Companies Registry. Just fill out a few forms, provide a copy of your company’s Articles of Association and you’re done! Your company will automatically file for business registration at the same time. Don’t forget, you’ll need to pay an incorporation and business registration fee of HK$2,000/year or HK$5,200 for three years.

    Getting a Bank Account

    A bank account is perhaps the single most important thing to have before you begin operations, especially when you’re starting an online shop. After all, you’ll want to be able to make and receive payments. HSBC is the most widely used but not known as the most “start-up friendly” bank,  Standard Chartered or Citibank also offer excellent business banking services.

    The bank will ask you to provide several documents, including your HKID, details of your business, information about the company’s partners and employees, and proof of registration. You may also be asked to attend a formal interview to discuss your business plan.

    Taxes

    Taxes are a breeze in Hong Kong, even for businesses. During tax season, you can file your coprorate tax online with a BIR51 form. The corporate tax rate in Hong Kong is set at 16.5%. If you run a high-profit business, though, you may be able to use two-tier taxation where your first HK$2,000,000 is taxed at 8.25% and anything over is taxed at 16.5%. Don’t forget to keep all your records for up to seven years.

    Sourcing and Logistics

    The next step in setting up an online shop in Hong Kong is to source products and find distribution channels. Hong Kong’s proximity to China means you’ll have easy access to Mainland factories and innovation hubs in the Greater Bay Area, all while taking advantage of low costs of production and shipping.

    12.2-greater-bay-area

     

    To start sourcing, many websites are available like Alibaba, Global Sources, and Made in China, which connect you with factories and suppliers but don’t forget to verify your suppliers by asking for audited accounts, VAT invoices, and samples.

    China also provides drop-shipping to Hong Kong and beyond, which is great for keeping your costs low and maximising your profit margins. Drop-shipping sites like ChinaBrands, AliExpress, and DHgate make it easy to streamline your sourcing and distribution. Just find a site that has a range of products that meet your needs and offers free (or low-cost) shipping for customers.

    Hong Kong also offers access to other manufacturing hubs across Asia. Consider sourcing in Vietnam, Thailand, Malaysia or India if it the kind of solutions you are looking for. These countries may have products and costs that are most suitable to your business, and could offer more convenient access to different markets.

    Starting your Online Shop

    Now that your business is up and running, it’s time to move on starting your online shop and while many can think that it’s a tricky task, there are actually shortcuts thanks to website builders that will allow entrepreneurs to have a platform without having to code.

    There are different companies in this market and Shopify is the leading one to build an ecommerce store since it proposes an integrated one-stop management system for online retailers. In short, it makes it easy for you to create your own shop with customisable themes, low costs, no fancy IT skills and full shopping cart management.

    12.3-e-commerce-shop

    In minutes, you’ll set up your brand name, get a domain and logo, and begin building your store. The advantage of these eCommerce builders is that you can easily manage your online business with a dedicated, easy-to-use website and app. You’ll access multiple points of sale aside from your online store, from real-life retail outlets to social media and sites like Amazon and eBay. Marketing support will help you with content SEO and Facebook ads so you can reach more customers and grow your business. And top-level management like processing payments and orders is a breeze. Your biggest question will be why you never considered starting an online shop before.

    With an easy incorporation process, good banking services, and an easy-to-navigate tax system, Hong Kong is a great choice for setting up a business. And with the city’s access to factories and suppliers in Mainland China – and around Asia – and a number of useful eCommerce platforms like Shopify, starting an online shop in Hong Kong has never been easier.


    Entrepreneurs – find the latest business networking and training events in this roundup!


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