Investors who want to start a retail business in Hong Kong can benefit from the city’s position in Asia: its geographical position and its position as an economic and financial business hub. The city attracts many foreign investors, tourists, and shoppers and it is a good location to base a retail business.
Hong Kong is a shopping destination for international tourists but it is also important for those shoppers coming from Mainland China – one of the most important emerging markets in the area. China is a valuable trade partner and supplier for business owners in Hong Kong.
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The retail sector in Hong Kong
Hong Kong’s retail environment is a dynamic one and it relies on the number of tourists who visit the city every year and on the domestic consumption. Street shops located in prime areas throughout the city and mall-based retail chains are both two good business options for those who want to engage in trading with consumer goods.
Retailers in Hong Kong tend to also focus on the online side of shopping. Consumers are receptive towards online retailers and many retail stores have online platforms that allow for an easy shopping experience.
Large companies and retail chains are established on the Hong Kong market and provide access to various goods and services, from grocery to clothing.
Opening a retail business in Hong Kong
One important advantage for retailers in Hong Kong is the low taxation system in the city. There is no VAT levied on goods and services, no capital duty tax or payroll tax. Property owners will have to pay a real property tax on the income they derive from renting store space. The corporate income tax has a rate of 16.5% and 15% for unincorporated businesses.
Retail business owners can set up a limited liability company in Hong Kong or if they prefer, a simpler business form such as the partnership. Most investors in the consumer products and retail sector will choose to open a Hong Kong company because of the limited liability and the advantageous tax rates.
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