Every time that the name Hong Kong is mentioned in South America, it rekindles flames of hope and desire to build a better future. Well, Brazil is doing is great, but you better be part of building it as opposed to waiting it to grow and impact on you. How better can you do this apart from travelling to Hong Kong for investment?
For years, Hong Kong has demonstrated its unique ability to nurture startups and transform them into great multinationals. Whether you are from Brazil or Argentina, there is a space for you to expand and grow into the big corporate in the Far East. In this post, we look at why you should come to and invest in Hong Kong.
Important facts about South America
The area and general population
South America is located in the western hemisphere with a very small section extending to the northern hemisphere. At times it is called an American subcontinent. It is very large with a total area of 17,840,000 square kilometers. According to the latest population census, South America had a total of slightly over 410 million people.
Of all the 12 countries of South America, Brazil is the most populous taking about 50% of the entire population. Most of the people stay near the western and eastern coasts while the interior are sparsely populated because of topography. Colombia, Argentina, Venezuela, and Peru follow in that order on population size.
The culture of South Americans is derived mainly from the interaction between European colonists (mainly Spanish and Portuguese) and indigenous people.
The South American economy is mainly based on exporting natural resources and manufactured products. The region’s merchandise exports stood at 16% of the GDP while the rest of the globe is 25%. Brazil is the largest economy in South America with a total merchandise export of $251 billion every year. It is closely followed by Venezuela, Chile, and Argentina with $93 billion, $86 billion, and $84 billion respectively.
Following the great recession of 1930, South America diversified its economy with livestock and agricultural products forming a significant driver of the economy. However, agricultural and livestock products are mainly consumed locally. In Argentina, Colombia, Paraguay, and Uruguay, commercial livestock farming has become an important economic activity.
Other important agricultural products include coffee, bananas, and cocoa that are grown in Brazil and Ecuador. On the Peruvian and Brazil coastal strip, sugarcane has become a very important product for driving the ethanol industry.
Of the 12 South American countries, only Argentina and Brazil have made to the industrial countries (G20). However, Brazil is more advanced and has attained the G8+5 status or most influential nations.
The four most industrialized nations in South America, Brazil, Argentina, Chile, Colombia, Venezuela, and Uruguay contribute to ¾ of the total GDP.
The industries in South America can be traced to the great depression of the 1930s after investors started diversifying to keep the risks low. This coupled with rich arable land helped to drive the agro-based industries. The key industries in South America include automotive, food, textiles, electronics, naval, clothing, timber, steel, and beverage among others.
It is important to note that the gap between the richest and poorest people in South America is very wide in comparison to other parts of the world. In Colombia, Brazil, and Paraguay, about 40% of the total income is shared by only 10% while the poorest only get3%. One ion every nine people in South America survive only on less than $2/pay.
Why you should come to Hong Kong ?
Ease of doing business
For more than a decade, Hong Kong has taken the top position as the region on ease of doing business. Taking lessons from its colonial history under the British, Hong Kong cultivated a unique sense of independence that remains to date. Though it operates as a Special Administrative Region of China, everything is independent except military and political system. This has given the region a perfect platform to drive its own business agenda.
As a South American, you will enjoy the ease of doing business in Hong Kong. From opening a business to market entry, everything is straight forward, fast, and highly convenient. For example, you can register a business in just three steps, open a bank account, and start trading within a very short time. It is this simple. However, you need to research the market well in order to get it right when entering and growing the business in Hong Kong.
Faster growth and success
When taking your company abroad, the dream that investors hold dearly is the desire to grow and become multinational. The population of Hong Kong is very big and will serve as the first most important target. For example, if you want to establish a restaurant, rest assured of getting a ready market for your delicacies. Make sure to focus on the target niche and perfect the products getting into the market.
Huge market in Hong Kong and Mainland China
As a free port, companies based in Hong Kong enjoy moving their products tax-free. Once the business has been established properly, you are sure of faster development because of the huge market in China. Because Hong Kong has entered into bilateral agreements with China, all companies located in the former get preferential treatment.
This means that you can enter, trade, and partner with other companies with minimal restrictions. Note that China is just one; a larger market awaits you in the neighboring Macau, Taipei, Taiwan, and other countries in Asia. Well, when you relocate a company to Hong Kong, the sky is the limit.
Stable political and banking systems
There is nothing as dangerous as unable political and banking systems. Most of the South America and Western political and banking systems are very fragile and unable to support businesses. For example, they lend all the money such that clients cannot withdraw large sums within a short notice. Therefore, even if you have an emergency, there is a risk that the cash in the bank might be of help.
However, Hong Kong has a very stable political system that works towards business stability. It has established important laws that protect both the banks and their clients. It is because of this that Hong Kong has become a paradise for banks. About 200 international banks have branches in Hong Kong. This means easy access to funding and other support.
Government support and chances of qualifying for 0% taxes
As indicated earlier, Hong Kong government encourages people to open businesses there and take advantage of the lovely operational environment. If your company involves adding value tech-products or in other tech niches, consider checking whether you can benefit from any of the government supported programs.
If most of the business operations will be based away from Hong Kong, you can qualify for 0% tax. However, even other taxes are very straightforward. Every business is required to only pay 16.5% in taxes for all transactions completed in Hong Kong. The 0% tax on transactions done away from Hong Kong, it is important to consult a tax expert in Hong Kong.
How to open a company and bank account in Hong Kong ?
Opening a company
For nonresidents to start businesses in Hong Kong, they are required to incorporate companies. Registering a company requires consolidation of the following documents and presenting them to the companies’ registry; shareholders passports, articles of association, minutes authorizing the formation of the company, and business address.
Before you can present the documents to the companies’ registry, the law requires you to carry online search for the business name. Then, you have to look for a company secretary and physical address. You can advertise the position of the company secretary on the Hong Kong dailies or use a recruitment agency. It is also crucial to get an appropriate business address as a reference point for your Hong Kong business.
The final stage is presenting all the documents to the companies’ registry for consideration. If the companies’ registry indicates that all the documents are okay, it will take about 14 days to get the certificate of incorporation.
Opening a bank account
You can only open a bank account after getting the certificate of incorporation. Most banks will require the company’s certificate of incorporation, shareholders passports, proof of residence, bank directors and company secretary details.
The bank will also require you to submit a complete structure and explain operational plan. Here, you might also be asked about the main source of operational capital and types of clients to anticipate.
Most banks do not want to risk their operational licenses by opening accounts with people they do not fully understand or operates fraudulent activities.
Today, it is important to ask the shareholders to also include their tax reference codes so that they can proof their tax residence status. This is one of the latest requirements after Hong Kong committed to working together with other OECD members to address tax avoidance.
If you are a South American, you have everything to gain by opening a business in Hong Kong. Do not experience any difficulty trying to open a company or a bank account; simply contact us for faster, economical, and convenient process of starting investment operations in Hong Kong.