Hong Kong Wants to Expand Business Ties with ‘Start-Up Nation’
JNS.org – Israel’s business community has increasingly turned eastward towards booming Asian markets—so much so it was recentlyreported that in 2014, Israel is expected to export more on an annual basis to Asia than it will to the United States.
Fittingly, then, Asian countries had a major presence at the prestigious MIXiii – Israel Innovation Conference 2014, held May 20-22 in Tel Aviv. Hong Kong, represented by a diverse 31-member delegation, was no exception. The group was led byInvest Hong Kong (InvestHK), a government-backed financial body whose goal is to “encourage new global companies to set up their businesses in Hong Kong, and to help those existing companies expand,” said Simon Galpin, its director-general of investment promotion.
In addition to attending the conference, InvestHK used its trip to discuss the various advantages of doing business in Hong Kong with Israeli government officials, tech startups, business incubators, educational institutions, and venture capital investors.
Galpin told JNS.org that his Israel delegation included “a mixture of people [such as] key investors and entrepreneurs looking to invest or collaborate with Israeli start-ups”; some of Hong Kong’s leaders in innovation, high-tech, and R&D (research and development); and one of the country’s chief scientists. He hoped that the trip would “plug the entrepreneurs we have into what’s going on in Israel,” and encourage Israeli start-ups to explore Hong Kong as an option for expansion.
In Galpin’s estimation, Hong Kong is the ideal destination for Israeli investment. He cited the city-state’s high degree of autonomy, low barriers to entry, and simple low-rate tax system.
“We can register a new company in just about an hour,” he said.
Galpin stressed that Hong Kong already has a large Israeli population, and noted that it is one of the safest cities in the world, with a “secure environment and high-quality lifestyle.” The local Israeli community stands at more than 4,300 people, and includes a Jewish day school. Many Israelis living in Hong Kong work in the diamond industry.
Additionally, according to Galpin, Hong Kong can serve as an effective means for Israeli companies looking to make inroads in businesses on the nearby Chinese mainland.
“Sometimes Israeli companies, when looking to do business with China, they assume going straight to the mainland will save time and money,” he said. “However, in many cases, going through Hong Kong, with its limited bureaucracy and many accommodation options, a company can find the right accommodations and at the right price.”
“The communication and collaboration between Hong Kong and Israel is gradually building up,” added Galpin. “That’s why we are putting more emphasis here [in Israel] than in virtually any other part of the world.”
Jonathan Sternberg, a Jerusalem-based InvestHK consultant who spent his week with the group from abroad, explained that his role “is to advise and support Israeli companies across all sectors who are looking to expand their businesses in Asia and Hong Kong, and help them make informed business decisions.”
Sternberg told JNS.org that InvestHK’s Israel office “provides a range of free and confidential services to Israeli companies that are sector-focused.” For example, “we have diamond industry experts in Hong Kong, who can assist Israeli experts in that sector,” he said.
The office also provides Israeli companies with information on the availability of government support or grants that can be tapped into, and fosters business connections between Israeli companies and relevant partners in Hong Kong, according to Sternberg.
Sternberg said the idea is to “roll out the red carpet” for Israeli businesses in Hong Kong, ensuring “that their set-up is smooth, and that they can succeed.”
“We want to alleviate any concerns or potential headaches they might have to deal with when entering the market,” he said.
Parallel to the InvestHK mission to Israel, on May 19 the group kicked off its global 2014 StartmeupHK Venture Programme competition. The contest aims to help innovative ventures launch and develop their global businesses throughout Hong Kong. Last year’s competition received 384 entries from around the globe, including 43 from Israel. Two Israeli start-ups made it to the semifinals, and one—IT Central Station—was a finalist.
One of the judges who traveled to Hong Kong for last year’s StartmeupHK competition was Jon Medved, CEO of OurCrowd—an Israeli company that is the world’s largest platform for equity crowdfunding. Medved, who addressed the InvestHK delegation during its visit to his company’s Jerusalem office, told JNS.org that Asia is at the top of the list of locations where his company is looking to open a new office.
Medved said OurCrowd “is committed to building stronger ties between Israel and Hong Kong,” and that he sees significant commonalities in the cultures of the two nations.
“We [in Israel] offer a different kind of model than the innovation coming out of Silicon Valley,” said Medved. “Silicon Valley doesn’t emphasize respect for traditions, or elders, but here we can be innovative and still have serious respect for tradition. That’s important in our work and relationships with Asia, [and specifically in] Hong Kong and China.”
For Medved, meeting with the Hong Kong delegation was just part of an eventful week in Israel, the so-called “start-up nation,” thanks to the MIXiii conference.
“This country is on fire,” he said. “I’ve never seen anything like it. This week alone I’ve spoken to delegations from all over the world. People [from] all over are making pilgrimages to Israel, the start-up nation. We don’t even have to tell the start-up nation story anymore. Everyone gets it.”