It is important to learn the Hong Kong business culture before doing any business in the country because it will definitely affect your relations with them. Know that Chinese culture is the dominant business and social influence in the environment. The pace of life in the country is hectic and its residents are highly entrepreneurial with strong commercial instincts. Chinese are also hardworking and very competitive. They are also very conscious of their face or image that is why they highly value their education which according to them will ensure one’s social and economic mobility. Families are hierarchical and members are committed to upholding the family’s honor through loyalty, respect and obligations. Introductions and connections are not essential in Hong Kong although they help in establishing credibility for business. Hiring a local representative to initially develop the business is advisable.

It is good to learn how to do the proper Chinese way of greeting so as to show respect for the culture and establish a good impression on them. Bowing is their way of greeting and when a handshake is made be gentle because they are not used to close and intimate interactions with foreigners or strangers for that matter. Because they recognize seniority, be conscious of greeting the most senior member first.

Hong Kong Business Culture may also be described as results or role-oriented rather than that of the Western values of personal and social growth. Avoid confrontation and aggression. Remember to use language diplomatically. Refrain from directly refusing anyone by saying “I will try” or “I will see.” Be modest in all you behavior and also keep you calm.

Gift giving is also a part of doing business in Hong Kong. It helps establish or maintain relationships. Avoid giving clocks, books, green hats and anything unwrapped or wrapped in blue. Gift money in a red envelope is known as hong boa. Accept gifts with both hands and remember that gifts are to be reciprocated. A meal could also be a form of gift for the Chinese. Be punctual and courteous in meetings. Do not set appointments on Chinese New Year because they look forward to this time for vacation.

Hong Kong provides entrepreneurs a number of options as to what kind of company to set up in Hong Kong. Liberal government laws make it the offshore destination of choice when it comes to company registration. Most entrepreneurs prefer to set up a Hong Kong company as a Limited company for the following reasons.

Limited companies

Limited companies are companies that shoulder limited liabilities from a legal standpoint. The liabilities of the shareholders and proprietors are limited to the value of the shares they hold. This means during a legal tussle, the proprietor or shareholders can only stand to lose the nominal value of their shareholdings. The director or shareholders do not bare any personal liability to the debts of the company whatsoever.

In non limited companies the liabilities of the investors is not limited to their investment in the company. The shareholders are directly responsible for the creditors’ losses and are required to repay the debt their company has caused to its creditors.

Conditions to register a limited company

The law allows for a company to be set up by one or more persons; furthermore one single legal or natural entity can act as a shareholder, a director, a proprietor, an investor and also a company secretary simultaneously. There are no restrictions to the nationality of the secretary involved; however it is required that he or she must be a resident. There are no restrictions on the domicile or nationality of the other members involved.

A company’s executive body is made up of its board of directors who are responsible for the daily functions, supervision of documentation and audits, and deciding and implementing the future course of action for the company in the AGM – Annual General Meeting. As per Hong Kong law an AGM must be held at least once a year; there is also a regulation that there cannot be a gap of more than 18 months between consequent AGM’s.

An alternate route to set up a Hong Kong company

If you, as an investor, wish to set up a company in a hurry and cannot afford to wait to complete the normal start-up procedure, there is the option of acquiring a readymade shelf company. Shelf companies are companies that have not commenced any sort or form of business and have no economic presence in the market; such companies have no liabilities or debts at the time of purchase. Shelf companies are set up as per Hong Kong laws and are registered with The Registrar of Companies and have already attained a Certificate of Incorporation. The cost to purchase a shelf company is almost comparable with that of the cost to start up and register your own company in Hong Kong. The company must then obtain a permit from the Business Registration Office to engage in commercial activities.