How to Run Your Own Business in Hong Kong
For as long as I can remember, I have had my own business as I like the sense of independence and the challenge that comes from being an entrepreneur. Often people overlook start up opportunities when living abroad because they assume that the process is too complex or risky. Risky, it can be, but starting your own business anywhere involves risks. For the past six years, I have had a part-time editing business in Hong Kong and in this article, I will use my experience to provide advice specific to Hong Kong but general enough to be applied to other places.
Research Your Legal Rights and Responsibilities
Obviously laws vary from country to country and even within a country. Nowhere is this more evident than in China. While Hong Kong as a territory belongs to China, Hong Kong’s legal system is separate from China’s legal system. While the former is based on the British legal system and as such is discernable and recognizable by western standards, the latter is a mine field of complexity and seriously compromised by corruption. In other Asian countries such as Thailand and Vietnam, non-nationals wanting to start a business must go into partnership with a local. This has its own potential for problems.
Starting Up in Hong Kong
Starting up a business in Hong Kong can require as little as a Hong Kong Identity [HKID] card, US$350, and a business registration form. But to get an HKID card, you need a valid visa. You could apply for an investment visa and, if successful, apply for the HKID card. The law regarding dependents changed on July 1, 2003. Those on a dependent’s visa can no longer easily start a business, unless, like me, they had their dependent status prior to 1st July 2003 or are married to a permanent resident.
Businesses are registered as limited liability companies, sole proprietorships, or partnerships with a sole proprietorship being the least expensive and complex; however, getting an investment visa for a sole proprietorship is also difficult. Getting an investment for a limited company is the norm. The law requires that all businesses be registered within one month of commencement. But with a business registration, you are ready to find clients.
In many ways, making professional contacts and finding clients while living abroad is easier than it is at home. Living happily and healthily abroad requires a desire to ferret out necessary and useful information. While reading information from the Internet is one form of research, there’s nothing like making flesh and blood connections.
If completely lost as to where to start, contact the American Chamber of Commerce. They facilitate business relations between the USA and the host country and as such are information rich. If the joining fee is beyond your budget, helpful information can easily be gleaned from their website. Professional women’s organizations such as the Hong Kong Women Professionals and Entrepreneurs Association (HKWPEA) provide both a forum for business owners and practical assistance such as mentoring. Other professional organizations targeting women include the Hong Kong chapters of Women in Publishing [HKWIPS] and Webgrrls. While a member of both these organizations during my first few years in Hong Kong, I found neither of particular help to either my business or my skills development.
A Lateral Approach
Ironically, the best professional contacts I made during my six years in Hong Kong were made on the side of a mountain or on a sail boat. Using my leisure interests as a means of meeting people was a much more effective strategy for me. Power lunches and happy hour networking sessions bore me to tears but change the context to a hiking trail and I’m enthralled.
While sailing, I met a woman who designed her own product line, had it manufactured on mainland China and sold her designs through a jointly owned shop in Bali to hip and trendy beach bums. Her only qualification when she started was a degree in fashion design and a few years experience in the rag trade in Asia. While her business and mine had little in common, I was inspired by her determination in the face of numerous setbacks and her willingness to take her mistakes in stride and learn from them.
Pricing a Job
The quickest way to tell the neophyte from the seasoned pro is how they approach the issue of costing an editing job. Especially when the dominant language of the country is not English, the pro will ask to have a few paragraphs or pages emailed for review. The uninitiated will ask for a word count. A fifteen page document written by someone with extremely poor writing skills in English can take much longer to edit than a document twice the length written by someone with a good grasp of English and a natural inclination to read in English.
Another important factor is defining the scope of the work expected from you. Proofreading, editing and copy writing can mean different things in different countries—or within different departments of the same company. I have had companies ask me to write entire sections of text, yet they called it editing. Copy writing requires more time and, thus, is more expensive. Starting off in any business requires a willingness to take life on the chin. You will make mistakes in pricing but that is part of the learning process.
When I first started my business in Hong Kong, I was advised by friends to have a contract at the ready for clients to sign to insure I got paid. As it turned out, most of my clients supplied their own contract. And despite the lack of a contract when editing dissertations, I never had a problem getting paid by a student. In fact, the only time I had a problem getting paid was for a project I did for a local non-governmental organization that had been contracted by The United Nations. Three months after project completion and I still hadn’t been paid. Having a contract and numerous emails as documentation, I could have easily taken the organization to small claims court. An accessible and accountable legal system is a must unless you have silly amounts of money to lose, which is a big reason why setting up a business in Hong Kong is preferable to setting up a business in mainland China.
As it turned out, I didn’t have to play my trump card and take the organization to small claims court. Instead, I took the penultimate step and played the embarrassment card. When the three Ps—politeness, patience and professionalism—fail to get the desired results, camping out in the client’s office or having a louder than normal conversation with the client’s receptionist can work like a charm. In my case, I simply called the friend who had put my name forward for the job, explained the situation and requested that she call her friend in the organization. Within two days I was paid.
Another attractive feature of Hong Kong is a low 15% income tax rate but, unless you have prior experience calculating profits tax, it is best to either hire an accountant or to find a hiking buddy in a similar line of business and who does her own taxes to show you the ropes.
As the editor of academic papers, I foresaw plagiarism as a potential issue. When I came across it in a paper, I assumed that the student didn’t intend to plagiarize and I took the opportunity to educate the student to what constitutes plagiarism, how to avoid committing it and the policy of the offending students’ university towards plagiarism. What I wasn’t prepared for was a flagrant disregard for academic honesty and scholarship.
I put an advertisement in one of the quality Chinese language newspapers to edit theses and dissertations. The advertisement was immediately successful but not in the way I had intended. The deluge of calls I received were from people not wanting me to edit their dissertation but to write it for them. My response went from perplexity—How did they get that idea from my very clear ad?—to self-righteous indignation—How blatantly dishonest!—to the practical logistics of such a stupid idea—How do they expect to defend a dissertation I’ve written? The last guy who called prior to me pulling the ad had a vocabulary range in English of twenty-five words yet he had been interviewed and accepted into a supported distance learning MA program from a British university.
Some months later and looking to expand my editing work beyond Hong Kong, I applied to several online editing services that I was lead to believe specialize in editing academic papers. While professing to have the highest ethical standards, these services really specialize in writing papers for students. They were quite adamant that any one working for them caught plagiarizing content would be immediately fired. But, I reasoned, wasn’t allowing students to purchase papers and submit them as their own equally dishonest?
You Can Take It With You
Despite the ups and downs, I still prefer to have my own business, especially now as my husband and I prepare to sail around the world for a few years. With a laptop, an Internet connection and a few loyal and connected clients, I will take my editing business with me from port to port.