Comparing Setting Up A Company In Hong Kong And Shanghai
With the incredible rise of China as one of the leading economies in the world
, both Hong Kong and Shanghai have emerged as cities with the brightest future. Both cities are considered as global business hubs and are home to some of the most innovative countries in the world. Both cities are also known for their unique characteristics and many cannot decide whether one city is better than the other. With so much talk of Hong Kong and Shanghai, it is but natural for many analysts to compare both cities on various factors. One of the aspects where foreign business owners usually evaluate Hong Kong and Shanghai is how simple it is to set up a new company in those cities.
Although both Hong Kong and Shanghai are part of China, Hong Kong has an advantage over Shanghai as it can create its own business or economic laws. This is because Hong Kong has the status of an administrative region of the Peoples Republic of China and has complete autonomy in its economic policies. On the other hand, Shanghai is very much a part of Mainland China. It is the most developed city of China and is considered as the financial capital of the nation. Most foreign companies entering China prefer to incorporate their Chinese Company in Shanghai.
Considering Hong Kong has autonomy in its economic policies, the city has followed a free market economy and has welcomed foreign companies to its shore. Administration in Hong Kong has made it as simple as possible for a foreign owned business to incorporate in the city and is working on making things even simpler. Currently foreign companies can complete the entire company incorporation procedure within a week. A new proposal is already on its way to reduce this time drastically to only one working day. There are no minimum investment requirements and foreign companies can have directors residing anywhere in the world. Annual general meetings or director meetings can be held in any country and the city has the lowest corporate taxation rate in entire Asia.
On the other hand, even though Shanghai has been developing at a faster rate than Hong Kong in the past few years, foreign companies planning to set up their base in Shanghai have to go through a complicated and time consuming process. This is because they have to follow the same process as is being followed in rest of China. Usually the company incorporation process takes well over a month and the foreign company has to make a significant investment to retain their full control over the company.