Shenzhen thewristbands black launch pad for HK startups

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In chasing their dreams, a growing number of Hong Kong entrepreneurs have made up their minds to head north to set up businesses in Shenzhen — a high-tech city now hailed as the "land of opportunity". QILAI SHEN / BLOOMBERG

SAR"s entrepreneurs answer clarion call to go north to realize their dreams

It didn"t take long for Hong Kong entrepreneur Chan Sing to be shown the ropes when it comes to doing business — barely three years on the road from an incubatee startup to an incubator.

A newcomer to Shenzhen three years ago, he has made himself a skillful mentor, helping more startups from the Hong Kong Special Administrative Region to launch their business in the neighboring city.

In 2015, Chan tried his luck by taking his startup to an incubator in Shenzhen after running into trouble raising funds in Hong Kong. Within six months, he had managed to secure a 50-million yuan ($7.81 million) investment there.

Last April, he started running a 3,000-square-meter incubator in Shenzhen"s Nanshan district in cooperation with local government. So far, 40 Hong Kong teams have jumped on board, two thirds of them from Hong Kong and the rest from the Chinese mainland with a Hong Kong educational background.

Chan"s transformation reflects the in-depth development of Hong Kong entrepreneurs" explorations in Shenzhen. While other cities in Guangdong province are still trying to lure Hong Kong startups to their turf, Shenzhen has emerged as their second entrepreneurial home.

Chan"s business aspirations began at the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub, or E Hub, which has been home to more than 300 entrepreneurial teams since its official opening in December 2014, including more than 158 from Hong Kong and Macao. Half of the Hong Kong teams have gained funding, with total investments exceeding 1.4 billion yuan.

Chan recalls that it hasn"t been a bed of roses as many people may realize. "When I first started doing business here, I wasn"t familiar with the difference between the mainland and Hong Kong taxation systems. But, I"ve paid dearly to gain the experience, so I can now use that experience in starting a business on the mainland to help other Hong Kong entrepreneurs."

After two years of working in E Hub, he began operating an incubator in a Nanshan industrial zone — one of the city"s 10 Shenzhen-Hong Kong youth innovation and entrepreneur hubs set up by the government last year, following E Hub"s pioneering attempt.

He soon noted a growing number of Hong Kong youths heading to Shenzhen in search of new opportunities. "If there were no sound development within three to six months, they would probably lose confidence and go home. Therefore, the psychological support from a fellow townsman would be especially encouraging."

As for hardware, there"re many organizations to help them settle down in Shenzhen quickly and smoothly, such as HEX Cube. "As now, Hong Kong entrepreneurs need to follow the same administrative regulations as foreigners when setting up a company in Shenzhen, and it has many limitations," explained its founder Chen Jiwei.

He said while companies in Hong Kong have to declare tax once a year, it"s once monthly or a season on the mainland, and the tax categories are vastly disparate. Moreover, they cannot register a company in industries that are on the "negative list," such as education, finance and film production.

Chen"s enterprise offers a package of services for Hong Kong startups, including finding offices, company registration, finance management, employee recruitment and marketing.

Hong Kong universities also play a role in linking entrepreneurs in both cities as most of them have branches in Shenzhen.

Besides, various official and private associations have been organizing exchange activities, inviting Hong Kong youths to visit Shenzhen and helping them to familiarize themselves with the business climate in Guangdong province.

Hong Kong Chief Executive Carrie Lam Cheng Yuet-ngor has said the SAR should also serve as a "facilitator and promoter" in helping young Hong Kong people to work and live on the mainland.

With exchange activities picking up in the past few years, Guangdong is becoming a popular and familiar destination for emerging Hong Kong companies. According to a report jointly published by the Hong Kong Guangdong Youth Association and Proactive Think Tank Ltd, 67 percent of more than 800 Hong Kong youths surveyed said they are now more willingly to start a business in the province.

But, the report said both the Guangdong and Hong Kong governments have paid a "huge price" and taken a lot of measures to get more Hong Kong youths to take part in exchange activities on the mainland, and the next step is to provide them "more profound experience".

Chan Sing agreed that it"s time to push for deeper interaction among startup communities in the Guangdong-Hong Kong-Macao Greater Bay Area.

He urged organizers of exchange activities to pay greater attention to follow-up services and take them to a higher level.

He also proposed creating a "Hong Kong youth startup village" gathering all Hong Kong youths who are interested in starting a business in Guangdong and connecting their projects to cities with related industrial advantages, so that homogenization events could be avoided.

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