Funding Support For Startups in Hong Kong
As an international financial center, Hong Kong has not only experiencing the typical business, but also a booming startup scene in recent years. In the 2019 Global Startup Ecosystem Report, Hong Kong is rated as a new entrant in the world’s top 25 startup hubs, listed as the third most innovative location in South East Asia, East Asia, and Oceania in the Global Innovation Index 2019. Furthermore, according to lnvestHK’s 2019 startup survey:
- Hong Kong has a significant increase over 2018 on all main parameters, with a total of 3,184 startups (+21 %) employing 12,478 employees (+31 %) across 92 co-work spaces, incubators, and accelerators.
- The group of multi-cultural startup founders, who are the backbone of Hong Kong’s startup ecosystem, continues to create job opportunities for the Hong Kong economy.
- The number of co-work spaces, incubators, and accelerators, which is supported by a robust network of ecosystem builders and stakeholders, has also shown remarkable growth over the years.
WHAT DO OVERSEAS STARTUPS NEED TO KNOW ABOUT FUNDING PROGRAMS IN HONG KONG?
The Hong Kong government and different stakeholders participate actively in the startup ecosystem, which offers more than 70 different programs to support potential entrepreneurs with different goals and needs. In this article, we aim at listing some interesting programs that you should know about.
In recent years, the Government of Hong Kong has forged ahead with the development of innovation and technology with plentiful funding schemes.
Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD) Fund
Provide funding support to individual Hong Kong enterprises in undertaking projects to develop brands, upgrade and restructure their business operations and promote sales in the FTA markets 3 and Mainland China market, so as to enhance their competitiveness and facilitate their business development in the FTA markets and Mainland China market.
Partnership Research Programme (PRP)
Launched in January 2019, PRP aims to support applied research and development (R&D) projects undertaken by R&D Centres or designated local public research institutes in collaboration with private companies.
Enterprise Support Scheme (ESS)
Launched in 2015, ESS aims to provide funding support for local companies to conduct in-house research and development (R&D) work with a view to encouraging the private sector to invest in R&D.
Technology Voucher Programme (TVP)
TVP subsidise local enterprises and organisations to use technological services and solutions to improve productivity, or upgrade or transform their business processes. TVP invites applications for funding all year round.
Reindustrialisation and Technology Training Programme (RTTP)
Reindustrialisation and Technology Training Programme (RTTP) is a funding scheme under the Innovation and Technology Fund that subsidises local companies on a 2:1 matching basis to train their staff in advanced technologies, especially those related to “Industry 4.0”.
Incubation and acceleration programs
Cyberport Incubation Program
Cyberport Incubation Programme supports entrepreneurs and start-ups with resources that aim to accelerate their growth. In addition to a range of business and professional services, incubatees get up to HK$500,000 support over 24 months.
Cyberport Accelerator Support Programme
The Cyberport Accelerator Support Programme prepares Cyberport incubatees and alumni for international markets and investors, providing up to HK$300,000 financial assistance to each successful applicant.
Cyberport Macro Fund
With an initial size of HK$200M, the Cyberport Macro Fund is set in place to provide seed to Series A stage funding to Cyberport digital entrepreneurs to assist them to accelerate; and promote the development of the venture capital ecosystem for digital entrepreneurs in Hong Kong.
Incu-Tech Incubation Programme
Incu-Tech helps technology startups kickstart their journey to productize its R&D outcomes, explore the market and scale their businesses. The 3-year programme offers comprehensive services including R&D support, mentorship, investor matching and more.
Incu-Bio Incubation Programme
A four-year programme managed by the Biomedical Technology Cluster, Incu-Bio supports the development of biomedical tech startups in Hong Kong. Connect with stakeholders in investment and regulatory support to devise the perfect business plan. Access cutting-edge equipment, co-working space and lab services. Cover R&D costs with financial support up to HK$6,000,000.
Incu-App Incubation Programme
Incu-App is a two-year programme designed to help startups develop new solutions from existing technology. We provide designated account managers who can give you professional guidance, so you can tap into industry expertise in content development, application platform and market support value chains through partnerships with top companies in Hong Kong.
Corporate Venture Fund (CVF)
The Corporate Venture Fund (CVF) gives early-stage Hong Kong technology startups a chance to fully develop their ideas and create revolutionary new tech products and services.
Besides looking for funding opportunities, overseas startups should also pay close attention to the abundant startup network, marketing campaigns, competitions and matchmaking events organized by an extensive network of stakeholders in the startup ecosystem. A good way to keep track of Hong Kong’s startup events is to visit the Events section on InvestHK’s startmeup.hk website: https://www.startmeup.hk/upcoming-events/events-calendar/
CW STARTUP SERVICE PACKAGE
The unique status of Hong Kong in the international community, the increasingly close co-operation between Hong Kong and the Mainland, and the financial support from various sectors of the society have all contributed to the startup development of Hong Kong.
Despite the fact that Hong Kong has been battered by social movements and epidemics, CW believes that it is precisely during uncertain times new forms of business start to sprout.
While our future relies on innovation and new business models, it is equally important for business advisory firms like CW to learn how to support startups to grow in a healthy and compliant manner. Last month, CW joined Cyberport Hong Kong, Brazil-China Chamber of Commerce and Invest Hong Kong in the promotion of Cyberport Venture Capital Forum (CVCF) which took place during 3-4 November. According to the post-event report, more than 250 deal flows arranged during CVCF. Startups received ample opportunities to meet with investors and showcase their solutions.
If you are ready to take advantage of the funding opportunities in Hong Kong to expand into Asia, CW offers an attractive service package to help you:
- Setting up a limited company in Hong Kong
- Taking care of your annual accounting and tax compliance
- Connecting you directly to our startup ecosystem partners
ACCESS OUR STARTUP SERVICE PACKAGE IN THREE DIFFERENT LANGUAGES
- Government Funding Schemes at a Glance https://www.success.tid.gov.hk/success_enews/govfundscheme/eng.pdf
- Startup Resources https://www.startmeup.hk/startup-resources/
- Trade and Industry Department, HKSAR, Resources Corner, Financing https://www.success.tid.gov.hk/english/res_cor/res_cor.html#T3
Today, organizations can now select from several international and local banks to open a corporate bank account in Hong Kong. Many products and services have been tailored to address these issues by every significant bank in Hong Kong, both local and international. You need to know those things required by your bank before opening an account so that whatever the bank offers can go with your needs.
Have you had a go at opening a corporate bank account in Hong Kong and had been dismissed with no clarification from the bank? The global banking system has been compelled to rebuild its activity and strategies. Compliance is characterized as the capacity to act by following some guidelines. By not complying with these guidelines, the reputation of the bank is affected.
You must come prepared with the following in mind, a non-exhaustive list, and be ready to wait for some days to get approval if you want to open a bank account without having issues. And be prepared for the banks to come back with more questions and clarifications, as a direct result of anti-money laundering and counter-financing terrorism (AML/CFT) during the process of opening a new bank account for the client.
Below, we list the primary reasons why people find it hard to open bank accounts in Hong Kong:
Banks work under a lot of standards and rules that are commanded by regulators. What is more, banks ought to be severely penalized under various sanctions if they do not conform to these rules. Subsequently, it has made them excessively protective of their financial services, which causes that the procedures involved in opening a new bank account gets more complicated and difficult and takes more time.
Banks are commercial organizations motivated by financial benefit. They hope to guarantee that the organizations are beneficial before contributing their time and assets. A business evaluation will be applied based on the interests that can be earned from the organizations. Along these lines, an organization’s profile is an important criterion that can influence the bank’s points of view.
By and large, banks will demand that each organizational head come to Hong Kong or meet them face to face for the procedures involved in opening a bank account. It makes things even more difficult, especially with the outbreak of COVID-19. Then again, the application surveying can be taken half a month or every month to process the stringent assessment. What’s more, the bank evaluation plan will differ by organizations, making the selection of candidates obscure. The whole process can move faster if the banks get advice from a service provider that is well-vast in this area and prepare adequately before an interview.
Most of the world’s important banks have branches in Hong Kong. Before you get involved in the opening of a corporate bank account, it is critical to consider these factors:
- The reputation of the bank
- Services and facilities offered by the bank
- Future support services like loans or trade financing
- Minimum requirement deposit
- Internet banking facilities offered and
- Monthly charges (if any)
Despite the difficulties, most international companies appreciate the advantages of establishing a company in Hong Kong and the using of Hong Kong’s banking system to facilitate their international transactions. These advantages include:
- No restriction on foreign exchange remittance or free transfer of funds;
- Convenience in settlement of international trades;
- No interest in tax with higher revenues of deposits;
- Free conversion of currencies;
- Convenience in daily account operation and online bank transactions; and
- The ease involved in getting trade financing from international banks.
As one of the world’s largest financial centers, Hong Kong is the perfect spot for making ventures and opening bank account for investors. Be that as it may, banks have various prerequisites on the procedures and information needed to open a bank account. The organization’s executive may need to invest extra energy in making inquiries to the bank for this, as he may neglect to produce the necessary information, which might lead to a lot of wasted time.
CW has been working closely with a couple of international banks trying to provide solutions to foreign companies with imminent needs to operate in Hong Kong. In the past few months, our Company Secretarial Team has helped several clients open the corporate bank account without the directors’ presence. We can help you navigate through the process of applying for a corporate bank account with our expertise in dealing with the increasingly stringent customer due diligence requirements mandated by the banks.
If you are interested in opening a corporate bank account in Hong Kong, please download CW service brochure (https://www.cwhkcpa.com/wp-content/uploads/2020/05/CW-Service-HK-Company-Corporate-Bank-Account-Opening.pdf) and contact Ms. May Ly (email@example.com).
Please click below link to access June 2020 South China Business Journal of American Chamber of Commerce in South China:
Written by Company Secretary Team, CW CPA