Hong Kong Fact-File Part 5:
Small Business Incentive Programs
5.1 Hong Kong Small Business Support Schemes
Government and municipal incentive programs for small
business
Invest HK (http://www.investhk.gov.hk)
is the government’s foreign direct investment body (falling
under the policy umbrella of the Commerce and Economic Development
Bureau), and can provide assistance to overseas businesses
and their owners at every stage of the establishment and development
process, for example:
- Set-up: Assisting in finding the appropriate service providers
and location for the business, liasing with government departments
with regard to the obtaining of licences, and providing visa
advice
- Launch: Raising the profile of the business through various
channels
- Expansion: Providing advice on government initiatives and
grants, assisting in the networking process, and providing
support for international expansion
- Planning: Providing assistance with regard to incorporation,
regulatory, tax, employment and immigration-related planning.
The Hong Kong Science and Technology Parks Corporation (HKSTC)
is a statutory body set up by the Government. HKSTC supports
and assist new businesses in the technology or biotech sectors.
The program provides rent-free business premises for up to
one year and operates a number of assistance and re-imbursement
funds for certain business expenditure other than salaries,
licence fees and entertainment costs. The latest admission
criteria that must be met can be found at www.hkstc.org/incubation
.
Business start-up schemes
The Hong Kong Start-up Association (HKSUA), founded in 2008,
assists entrepreneurs in the field of internet and technology.
Such assistance is mainly provided via training and education,
although the Association also seeks to provide a forum for
owners of tech start-ups to meet, to collect and disseminate
information and statistics on the sector, and to act as a
representative and consultative body for such businesses.
More information can be found at: www.hksua.com.hk
SUCCESS (Support and Consultation Centre for SMEs) is run
by the Trade and Industry Department of the HKSAR and works
closely with many trade and industry organisations to provide
information and support for start-ups. The Centre also organises
workshops, seminars and consultation services for small and
medium size businesses at any stage of their development from
inception onwards. Detailed information and links to other
government websites as well as other associations and organisations,
including higher education institutions, is available via
their website: www.success.tid.gov.hk.
Youth Business Hong Kong was founded in 2005 with the support
the Youth Business Trust, a branch of the Prince’s Trust.
Its aim is to provide people between the ages of 18 and 35
who have a viable business idea with support, training and
access to seed funds. Seed funds are capped at HKD100,000
and are provided interest free. The Trust supplies young entrepreneurs
with business mentors drawn from industry, corporations, consultants
and other entrepreneurs. It helps to find business hardware
and gives advice on laws, finance and industry.
Support programs for bank lending
There are over 30 Public Lending Institutions (PLI) with which
the Trade & Industry department operates loan guarantee
scheme to help secure finance for small and medium sized businesses:
SME loan guarantee scheme for purchasing business installations
and equipment or for acquiring working capital loans. To be
eligible, the business must be registered under the Business
Registration Ordinance, employ less than 100 people if it
is a manufacturing business, or below 50 people if it is a
non-manufacturing business, this being the definition of an
SME as given in the Ordinance.
The loan may be used to purchase second-hand equipment and
installations but not to finance or re-finance machinery already
in use. The money may also be used as working capital.
The guarantee value is 50% of the loan amount, up to a maximum
amount HKD6mio.
In the face of the global financial crisis, a special loan
guarantee scheme was set up to help businesses overcome cash
flow problems arising from the crisis. Conditions of acceptance
for this scheme include that the business must have been operating
for a minimum of one year, the business owner or shareholders
holding more than 50% of the equity must act as personal guarantor(s)
and the business must be registered in Hong Kong under the
Business Registration Ordinance. The loan may not be used
for repaying other loans.
The loan guarantee value is 80% and the maximum loan amount
is HKD12mio.
The SME Development Fund (SDF) is designed to support research
studies, award schemes, seminars, exhibitions and other such
activities aimed at improving the competitiveness of SMEs.
Applicants must be non-profit distributing organisations and
must not already be in receipt of funding. Maximum amount
of loan is HKD2mio, 90% of which will be covered by guarantee.
The funds can be used to cover the following costs:
· The salary of any additional manpower required for the project
· Purchasing additional equipment
· External consultant fees
· Travel expenses
· Patent registration fees up to HKD100,000 or 90% of cost
involved
· External audit fees
An SME Export Marketing Fund (EMF) is designed to help support
manufacturing businesses with less than 100 employees or non-manufacturing
businesses with less than 50 employees to expand their business
through participation in promotional activities such as trade
fairs and exhibitions. The maximum amount of the loan is HKD50,000
or 50% of the total expenditure, whichever is lower.
In order to apply for the EMF, the business must be registered
under the Business Registration Ordinance.
Full details of the requirements and scope of the programmes
detailed above can be found here: http://www.smefund.tid.gov.hk/eng/eng_main.html?content=/eng/spgs.htm
.
The Hong Kong authorities are very keen to support SMEs and
approve the majority of applications for any of the schemes
above as long as the required criteria are met. Care must
be taken by the applicant to ensure that any monies approved
under the scheme are used for allowed expenditure, as checks
will be made to ensure that there has been no misappropriation
of funds.
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