- InvestHK says Hong Kong represents a fertile incubation environment for local and pan-African tech startups.
- It notes that nearly 4 000 new businesses from around the globe are now based there, representing a 50 percent increase from 2018.
- InvestHK has also highlighted the favourable tax incentives available to businesses in the region.
Much has been made of technology companies with ties to China of late, with the likes of Huawei and TikTok coming under heavy scrutiny. For technology startups, however, a region like Hong Kong could prove a worthwhile launchpad into the rest of Asia.
This according to InvestHK, which is a part of the department of the Hong Kong Special Administrative Region (HKSAR), responsible for Foreign Direct Investment.
The organisation notes that startups in particular are doing well in Hong Kong, with nearly 4 000 new businesses from around the globe now based there, signalling a 52 percent increase from 2018’s figures.
“These start-ups operate in myriad sectors, however most operate in the digital technology sector. Many of these take advantage of Hong Kong’s specialised incubators and business accelerators, as well as comprehensive government funding schemes,” notes InvestHK in a press release sent to Hypertext.
“For years, there has been Chinese investment into Africa and cordial relations between China and some African countries, and we are now seeing the start of flowback investment into China out of Africa,” adds Stephen Phillips, director-general of Investment Promotion at InvestHK.
While we’re sure the South African government would like to keep as many local startups invested in efforts within our borders as possible, it looks like those businesses which want to tap into Asian markets in particular, could use Hong Kong to reach that goal. Here InvestHK points to its own online platform called smartmeup.hk, as the first port of call.
“Hong Kong offers a route to growth markets in Asia, with their demographic dividends, high rate of tech adoption and growing intra-Asian investment flows. Of course, there is also the economic beast – mainland China – with opportunities to enter the market through JVs and partnerships,” continues Phillips.
The company also highlights the tax environment for businesses in the region, noting that it, “is an international finance centre with an independent legal system, rule of law, free flow of information and capital, and a competitive tax system.”
“Profits tax for the first HK$2 million of profits of corporations is 8.25%, while tax on profits over that amount is capped at 16.5%. Hong Kong has zero sales tax and no import tariffs on almost all products,” the release explains.
With SA only holding so much value for tech startups, perhaps expansion abroad is an option for some.
