China’s Gross domestic product (GDP) exceeded RMB 100 trillion or USD 15.4 trillion in 2020. The Greater Bay Area (GBA) reached USD 1,669 billion in the same year. It represents 10.8% of China’s total GDP. This figure came second among other major bay areas in the world. It is USD 312 billion less than the GDP of the Tokyo Bay Area. Nonetheless, GBA has the largest real GDP growth rate at 4.4%.
Beijing aims to transform the GBA region into the world-class technology and innovation centre of China. The local governments offer strong support for start-up companies and strive to incubate them in the fields of artificial intelligence, agile tech, biotech, blockchain, telecommunication, e-commerce, robotics, etc. GBA hosts many of the Chinese innovative technology companies, such as DJI, Huawei, Tencent and ZTE. Due to its industrial strength, advanced infrastructure and plenty of expertises, GBA has great advantages for Smart City development. It can deliver sustainable urban solutions of air pollution, transportation management and waste management.
More than half of the businesses in China would like to benefit from the technology and innovation initiatives from GBA. Those technology companies also want to grab this opportunity in the coming years by implementing strategic plans, recruiting more talents, increasing their R&D spending and expanding their operations in the GBA.
GBA is also a major logistics hub. It holds 3 of the world’s top 10 container ports and 5 international airports. It contributes to around 37% of China’s total exports. As e-commerce is accelerating across the world, the logistics and distribution sector is expanding rapidly in domestic as well as international businesses.
Access the opportunities in GBA starting from Hong Kong SAR
Hong Kong adopts a simple taxation regime, charging 8.25% for assessable profits under HKD 2 million and 16.5% for the excess. Capital Gains Tax, Dividend Tax, Value-Added Tax (VAT), Goods & Services Tax (GST), Sales Tax, Withholding Tax or Hotel Accommodation Tax (HAT) are absent in Hong Kong. This taxation policy is highly competitive within the Asia Pacific and the globe.
Furthermore, Hong Kong adopts free trade policy with a dynamic economic structure. The workforce is efficient and flexible. Business activities, including capital, goods and services, trading, e-commerce, manufacturing and professional services, are running freely in and out of Hong Kong daily. Together with a large free trade port, Hong Kong is the world’s 4th easiest city to do business in 2019 according to the World Bank report.
As an important member of the GBA, Hong Kong has high speed trains, buses and flights that connect to Mainland China. Hong Kong people are able to reach the cities of Shenzhen, Guangzhou and Macau within an hour. Same day travel to China for company visits, joining events or business meetings is very common. Moreover, Hong Kong has a well developed legal system as well as financial system, providing companies with essential tools for trading, investments, intellectual property, financial settlement and business co-operations.
S-O-L-A-R for Technology and Innovation Enterprises coming to GBA
It is undeniable that the GBA is providing a prospering eco-system for the development of technology and innovation. Increased public and private investment, regulatory development, and global talent mobility all encourage corporate investment across key sectors. Technology and innovative corporations should establish a regional strategy in the GBA in order to seize the advantages and opportunities given by the soaring development of GBA. Normsun and ACH help companies achieve their goals through SOLAR.
S- Starting and Structuring
Corporates need to comprehend market growth potential thoroughly and align their business models properly. To achieve continuous profitable expansion in businesses, wise “starting” and company “structuring” decisions in the expanding GBA market is crucial.
O- Operation (CFO & COO)
Companies with multi-operations in various cities around the world should operate effectively as one office. Flexible working rules present an opportunity for businesses to look far and wide to recruit expatriate talent from all over the world to work remotely, thereby supporting the company’s growth goals. Adopting SAAS software tools (e.g. Xero, Workstem, Dokka, etc) for effective virtual CFO and COO operation may be an effective way for managing cross regional operations.
There are a lot of favorable policies and taxation plans for companies coming to GBA through Hong Kong SAR. Learning or getting the advices about the related policies and opportunities through partnering with local professional bodies (e.g. Normsun and ACH) or supporting government body like InvestHK can be a good choice for optimising the return of resources investment.
There are an increasing number of funding sources available in the region for high-growth business. Numerous venture capital and private equity funds are looking to invest in technology and innovation firms. Besides, there are a lot of incubation platforms and government funds support the success of innovative technology companies expanding their business in GBA.
Normsun and ACH will be your trustworthy partners for the exciting GBA market opportunities. Normsun and ACH help companies raise funds for expansion and establish a successful operation in the region. Recently, an Italian technology startup incubation platform, Paradigma Exponential Hub, decided to kick off its expansion to GBA. Paradigma has been working on several advanced technology projects. ACH will collaborate with Paradigma to support the platform success in the growing GBA market. Hopefully, we will see many Italian products in the GBA soon.
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