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Tips for doing business in Hong Kong

Doing business in Hong Kong

With approximately 7.2 million people living on 407 square miles of land, Hong Kong is one of the most densely populated cities on Earth. The major Asian metropolis, located on the Pearl River Delta at the shore of the South China Sea, is also one of the world’s leading financial and business centers.

But an added layer of political complexity can create hurdles for those looking to do business in Hong Kong. From 1841 to 1997, Hong Kong was a British colony, and under British rule, it developed a culture far more Western in nature than other cities in China. When Hong Kong was transferred back to Chinese sovereignty in 1997, it was assimilated as a special administrative region.

The phrase “one country, two systems” is often used to describe the governing system of Hong Kong. It has its own legislative and governing powers, while the state government in Beijing oversees its military defense and foreign affairs. The result is a semi-democratic territory operating both alongside and within a communist state, with both sides sharing authority.

Here is some advice to keep in mind when doing business in this financially abundant, but politically complicated, part of the world.

Business structures

Large corporations tend to reflect the egalitarian, boardroom approach of Western businesses. But when dealing with the hundreds of thousands of small businesses in Hong Kong, you are likely to find a more traditional Chinese structure – family operated, with a paternalistic chain of command with highly centralized decision making. Such organizations are mobile and capable of quick adaptability, but they can also become de facto fiefdoms, where outsiders have no real hope of gaining influence.

Respect for elders and superiors

As is common in Asian cultures, respect for seniority and authority is held in extremely high regard. It is crucial to show the correct level of respect to members of senior management, which could include gestures such as standing when they enter the room or offering them the seat of honor at the head of the table.

Gift-giving

Gift-giving is an essential part of Chinese culture, and that extends to business, as well. The gift’s cost or type is secondary to the gift itself, which is a gesture of respect and goodwill. In business settings, there is often a ritual in which the recipient will refuse the gift several times before accepting, as a way of showing humility. The gift should always be wrapped and is seldom opened in front of the giver.

Dress code

It is best to err on the side of formal business attire – dark suits with ties for men, suits with skirts for women. Designer labels are a plus in a society that embraces American and Western European culture. However, bear in mind that Hong Kong is located in a borderline-tropical climate. Summers (June through September) can bring extreme heat and humidity, and the threat of heavy precipitation, including typhoons. Pack, and dress, in accordance with the seasons.

Women in business

Attitudes toward women in positions of power are generally more progressive in Hong Kong, compared to some other areas of China and East Asia, due to the longstanding influence of Western culture. You will often find a significant number of women throughout the chain of command in large multinational organizations. In smaller, family-run enterprises, which generally maintain a more paternalistic leadership structure, it is less common – but still not unheard of – to find women in positions of power.

Overall, visiting and expatriate women should encounter few difficulties working in Hong Kong, though they may experience subtle forms of sexism – for example, finding that the opinions of male colleagues hold more weight within a group setting.