Doing business

(Last updated: 10 Sep 2008)

Business opportunities

Hong Kong sets the standard for trends and fashions that influence the whole region, from China to Taiwan, and even Singapore. Establishing a presence in Hong Kong will showcase your product, service or idea right across greater China. Hong Kong exists for business, and so its relationships with other countries are largely business in nature.

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

In conjunction with the market profiles, the Opportunities Online website may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, generated by our overseas network to Australian businesses.
 

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.
 

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

Business etiquette

Business tips

Although Hong Kong is a Westernised society, Hong Kong Chinese business people still retain their local customs and practices, which have a profound effect on business relationships.

Gifts – The exchange of gifts is not widely practised in business in Hong Kong.

Business cards – The exchange of business cards is a must in Hong Kong so it is advisable to carry a large number on you. Business cards should be presented and received with both hands.

Establishing contacts and networks – Exporters should send as much documented information about their companies, products and services as possible in advance of their visit. Business visitors must remember to follow up on their meetings in Hong Kong when they return to Australia. The quality of your agent or representative’s contacts is crucial, and business introductions are vital, as companies do not deal with unknown or recommended contacts.

Business entertainment – Dinners and lunches with local representatives and customers help to develop networks. Seating should be arranged so that the Australians are spaced evenly with the Chinese guests.

Correspondence – Answer enquiries, proposals, correspondence and invitations as soon as possible. At the very least, immediately send an acknowledgement stating that an answer will follow shortly. If you do not show sufficient interest and speed in your correspondence, your potential customer will easily find another firm who will!

Face – Avoid embarrassing Chinese in the presence of others. To avoid the person losing face, discuss any criticisms in private. In some cases, it may be helpful to use an intermediary to convey criticism, particularly with someone of high social status.

Punctuality – Chinese place importance on punctuality and Australian visitors should do their best to avoid arriving late at appointments. Itineraries should take this into consideration and allow adequate time to move from one appointment to the next.

Forms of address – Many Hong Kong business people will have an English first name, used with a Chinese family name, eg. Peter Chan. In this case, the family name is used last, as in Australia. Normally when a Chinese name is written, the family name comes first, with the given name following, eg. Mr Chan Tai-Man would be addressed as Mr Chan. When addressing business correspondence to Hong Kon 

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Customs duties are levied on a limited range of items, including:

• liquor with alcohol content exceeding 30 per cent
• tobacco products
• hydrocarbon oils
• methyl alcohol

All importers of dutiable goods must be licensed with the Customs and Excise Department. The department issues registered importers with a removal permit to control the import and movement of dutiable commodities.

Non-tariff barriers

Licences are issued by the License Branch of the Trade and Industry Department. In certain cases, import licence applications must be endorsed by other Hong Kong departments. Validity periods of licences vary from 28 days for textile products to one year for non-strategic dutiable commodities.

Import licences are required for the following items:

• rice (also subject to quota arrangements)
• frozen meat and poultry (must be supported by a valid health
• certificate issued in the country of origin)
• agricultural pesticides
• radioactive material and irradiating apparatus
• ozone depleting substances (also subject to quota arrangements)
• pharmaceutical products and medicines
• textile products
• arms and ammunitions
• radio transmitting equipment
• explosives
• a range of high speed ADP apparatus and components

Import licences issued by the Crop Division of the Agriculture, Fisheries and Conservation Department are also required for a range of plant products, and must be supported by phytosanitary certificates issued in the country of export.

Imports of live animals must be covered by import permits issued by the Agriculture, Fisheries and Conservation Department, and must be supported by health certificates issued in the country of export.

Imports of flora and fauna listed by the Convention on International Trade in Endangered Species (CITES) also require import licences issued by the Agriculture, Fisheries and Conservation Department.

Only pharmaceutical products and medicines that have been registered with the Hong Kong Pharmacy and Poisons Board may be imported for local sale or distribution. Health certificates may also be required to satisfy local importer's trading practices.

Import permits are valid for periods up to six months. Import permits are required for milk products from the Health Department of the HKSAR Government prior to import.

Sand permits issued by the Civil Engineering Department are required for the import of sand in excess of 100kg.

Product certification, labelling and packaging

Labelling and marking

Prepacked foodstuffs are subject to specific labelling regulations which require the following details to be indicated on the immediate packing:

• The name or designation of the product.
• A list of ingredients, in descending order of weight or volume, headed or preceded by the word ingredient, or a statement which incorporates this word.
• A statement of special storage conditions or instructions for use.
• The numerical count, net weight or net volume.
• The name and address of the manufacturer or packer.
• A nutritional panel in the prescribed format in relation to energy, protein, carbohydrates, fat, saturated fat, trans fat, sodium and sugars, plus any other nutrients for which nutritional claims are made on the packaging or label. 
• An expiry date for the product (in both English and Chinese), expressed in terms of date, month and year, in any order.  

With the exception of the preceding requirement regarding expiry dates, labelling may be in either English or Chinese, or in both languages.

The requirement for a nutritional panel was introduced in May 2008 and will take effect on 1 July 2010 but it is already being adopted at the trade level. A small volume exemption may be applied for products with a total sales volume in Hong Kong of less than 30,000 units a year, provided the products do not make any nutritional claims.

Packaging

There are no special packing requirements. In general, extreme humidity may cause rust and mildew and goods likely to be affected should be packed in weatherproof materials. Dangerous goods must be marked with labels indicating the appropriate usage.

Special certificates

All meat and poultry imports must be accompanied by a valid health certificate issued by the competent authority in the country of export (in Australia, the Department of Agriculture, Fisheries and Forestry-Australia).  The certificate must state:

• That the meat or poultry has been examined by ante- and post-mortem veterinary inspection and has been found to be free from disease and suitable in every way for human consumption.
• That the shipment has been properly packed under sanitary conditions.

Generally, any person who imports goods into Hong Kong is required to lodge an Import Declaration with Customs and Excise Hong Kong within 14 days after importation of the goods.

Declaration forms are available from:

Customs and Excise Collection Office
2/F Harbour Building
38 Pier Road
Central, Hong Kong

Crustaceans and molluscs may require an accompanying sanitary certificate, attesting to condition, to satisfy the local importer's trading practices.

Live plants and plant material must be accompanied by a phytosanitary certificate issued by the approved authority in the country of origin with a special endorsement attesting that the product is free from parasitic organisms. Plant import is subject to strict quarantine control and approval by the Hong Kong Agriculture, Fisheries and Conservation Department.

Pesticides entering Hong Kong are controlled under General Import Regulations and the Pesticide Ordinance. Under the Pesticide Ordinance, companies handling pesticide imports, whether for local use or subsequent re-export, must possess a pesticides licence or permit issued by the Agriculture, Fisheries and Conservation Department to trade in such products. A licence is required for pesticides registered in Hong Kong; a permit for those not registered in the Territory. Pesticides imported on a valid bill of lading are exempt from the control of the Pesticides Ordinance.

Live animals must be accompanied by a sanitary certificate issued by the approved authority in the country of origin with a special endorsement attesting that the animal is free from parasitic organisms, subject to strict quarantine control and approval by the HKSAR Agriculture, Fisheries and Conservation Department.

The prohibition on textile imports includes any natural or artificial fibre products and any combination of natural and artificial fibre products in the form of yarn, fabrics, garments or other manufactured articles. Some products are exempt and only require the issue of an import license.

Whisky imports must be accompanied by a certificate of age (minimum three years) and a certificate certifying that alcohol content is not less than 43 per cent ethyl alcohol by volume.

Methods of quoting and payment

Quotations are usually on CIF basis. Payment is usually by letter of credit or documents against payment.

Documentary requirements

Commercial invoice

No prescribed form. A minimum of two copies and fax signatures are not acceptable.

The invoice must indicate:

• A description of the goods
• Country of origin
• Quantities
• Number of packages
• Marks
• Prices
• Freight charges
• Insurance details

Bill of lading

No special regulations. If made out To Order must contain the consignee's name and address on copy bills or shipping instructions.

Packing list

May be required for piece goods imported into Hong Kong for making up and subsequent re-export to British Commonwealth countries.

Government procurement and tender processes

Detailed information about government procurement in Hong Kong is available from the Financial Services and Treasury Bureau (FSTB) website, particularly the Guide to Procurement.

Procurement of most stores and supplies for Hong Kong government agencies is handled centrally by the Government Logistics Department (GLD). Individual agencies would only be responsible for purchasing small quantities and/or small value one-off items.

Tender notices, contract award notices and general terms and conditions for government tenders can be accessed online through GLD's Electronic Tendering System (ETS).

Other tenders (public works, transport, marine services, IT, etc) are handled by various government agencies - these are listed, with web links, in FSTB's 'Information on Government Tenders'.

A list of all government agencies in Hong Kong, with web links, is available. Procurement contacts in each agency can be identified using the government online telephone directory.

Statistics on outsourcing contracts awarded can be extracted from the ETS website (under Contract Award). There does not appear to be any other publicly available source for these statistics, though it is possible that the information can be obtained from the Census & Statistics Department.

GLD's Electronic Tendering System is operated by the following company:

Computer And Technologies Holdings Limited
29th & 30th Floor, MLC Millennia Plaza
663 King's Road
North Point, Hong Kong
Tel: +852 2503 8000
Fax: +852 2503 8100
Email: enquiry@ets.com.hk
Web: www.ctil.com

Information about subscribing to ETS is available from their website.

Tender search services are also available from e.tendering.com. This website is operated by Go-Business, a subsidiary of Computer & Technologies Holdings. 

Public health requirements

Regulations covering the import of animals and animal products from Australia vary with the type of animal and the region of origin.

Phytosanitary certificates must accompany shipments of live plants and potting mixture.

Sanitary health certificates issued by the appropriate authorities in the country of origin must accompany shipments of animals and their products.

Foodstuffs are subject to random testing. Only certain foodstuffs such as dairy products and frozen confection must undergo extensive laboratory testing.

Food containing preservatives or antioxidants should conform with the details specified in the HKSAR Government Preservatives in Food Regulations.

Pharmaceuticals must be registered with the Pharmaceutical Registration Section of the Department of Health.

Goods prohibited entry into Hong Kong comprise dangerous goods, arms and ammunition, some pharmaceutical products, medicines, radio transmitting equipment, endangered species, animals and plants, pesticides, ozone depleting substances, acetylating substances and textiles.

Insurance

Normal commercial practice applies.

Weights and measures

The metric system must be used in all documents. Failure to do so will lead to rejection of the shipment.

Taxation

Hong Kong has a low tax structure and tax is levied only on income or profits arising in or derived from Hong Kong for the fiscal year ending March 31. Details of tax rates are available from the Hong Kong Government’s Inland Revenue Department.