Hong Kong, March 22 (IANS) Investors based in Hong Kong are putting more money in start-ups and are increasingly looking at India as an investment option due to its strengths in areas such as information technology, a senior official has said.
Jimmy Chiang, Associate Director-General InvestHK, told IANS that investors based in Hong Kong, including venture capitalists, private equity companies and family offices, were getting increasingly interested in start-ups.
"The start-up ecosystem in Hong Kong is growing quite quickly. Last year, we surveyed close to 40 co-working spaces in Hong Kong and found that there are over 1,900 start-up companies operating which represents a year-on-year increase of 24 per cent," Chiang said.
He said local investors in Hong Kong had been traditionally more interested in areas such as real estate. "They are getting more interested in tech-related businesses, more innovative and disruptive business models. We are seeing that becoming a trend. Maybe they will be more interested in investing in India where IT, technology are strong as the business sector," Chiang said.
He said they were trying to enhance collaboration with start-up ecosystems in other parts of the world, including India, and attract more start-up entrepreneurs to the city.
India is the world's youngest start-up nation with about 72 percent of founders less than 35 years of age and has the world's third-largest start-up base.
Chiang said India is also a very significant upcoming market for Foreign Direct Investment for Hong Kong. "The country is growing very fast economically and some sectors such as information technology present a very strong potential," he said.
Hong Kong Trade Development Council (HKTDC) officials said that the city-based companies were seeking alternative manufacturing bases in the region due to rise in land, labour and other production costs in China.
They said an HKTDC research team recently visited India and identified Gujarat, Maharashtra, Telangana and Andhra Pradesh as states with better potential for industrial relocation and business opportunities.
The officials said that India had seen increase in labour productivity and there was a trend among foreign investors to set up production units, particularly in electronics and mobile products.
India was Hong Kong's fourth-largest export market in 2015 (after China, the US, Japan) and Hong Kong was India's third largest export market (after US, UAE) in 2015-16.
Hong Kong occupied the 16th position in FDI equity inflows into India at $1.976 billion (April 2000 to September 2016). It became a special administrative region (SAR) of China in 1997 after 150 years of British administration.
Officials said that India takes part in many international trade fairs held in Hong Kong annually to promote its strengths. These fairs also provide a platform for the buyers and sellers from across the globe to come together and interact.
They said that Hong Kong International Diamond, Gem & Pearl Show, which ended earlier this month, was among the most important shows between India and Hong Kong. India is the world's largest manufacturer of cut and polished diamonds.
The 34th Hong Kong International Jewellery Show, which nearly coincided with the diamond show, also saw participation of Indian jewellers from several cities.
The two shows featured about 4,480 exhibitors and attracted over 85,000 buyers from across the world.
Chiang said Hong Kong has a big Indian community and there could be better Indian restaurants and better food products and some other consumer products from India. "In these areas we are trying to do more promotion in India," he said.
Chiang said Hong Kong was not only a regional trading hub, it had been successful in attracting foreign companies to set up their regional headquarters in the city due to its advantages such as strategic location and strong connectivity.
He said any foreign passport holder can set up a Hong Kong-based company within hours and there was no restriction on FDI as long as the business was lawful. Jiang said there is no restriction on nationality of a Hong Kong company's shareholder and director.
Rajeev Bhasin, managing director, Mayfare group, which owns and operates several restaurants in Hong Kong, said the city was one of the best places to do business.
"Everyone follows rules, the system is very transparent. You show concept feasibility and it works. (It is possible to) set up a company in 24 hours," Bhasin told IANS.