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Thursday, December 11, 2014, 10:12

HK entrepreneurs spreading their wings at Qianhai

By Chai Hua in Shenzhen
HK entrepreneurs spreading their wings at Qianhai

A view of the Qianhai Shenzhen-Hong Kong Youth Innovation and Entrepreneur Hub (E Hub). The Qianhai E Hub will compete with other incubator programs to foster innovation entrepreneurs in the near future.

Ricky Leung, a Hong Kong entrepreneur in his 20s, recently moved his new startup company, Printact, to Qianhai to take advantage of the various incentives offered by the newly established Youth Innovation and Entrepreneur Hub (E Hub) there. 

As guest at the opening ceremony of the facilities last week,  Chief Executive Leung Chun-ying called on young people to “spread their wings” to explore opportunities beyond the city’s borders.

To Ricky Leung and many other Hong Kong entrepreneurs, E Hub promises an attractive environment, including rent-free offices for one year, onsite residence at reasonable rental and free high-speed Wi-Fi. What’s more, the estate is managed by a Hong Kong company.

The biggest attraction, however, is ready access to the mainland market, Leung of Printact said. “At first, we are attracted by the special policies offered by Qianhai, such as low tax and rental and other subsidies,” he said. “Also, I think Qianhai is a good place for Hong Kong entrepreneurs to understand and explore the mainland market,” he said.

He also said he expected that, with the factory located in Qianhai, it can help him save transportation costs for the delivery of parts and components sourced from mainland suppliers.

On the opening day, the E Hub held an exhibition at a 3,000-square-meter center, one of its eight separate buildings designed by Hong Kong-based architect Barrie Ho.  

Exhibiting its products with another 13 startups from Hong Kong and Shenzhen that have moved into the premises, Printact’s booth attracted a host of mainland investors showing keen interest in the company’s 3D printing technology. Leung said he tried his best to use his not-so-fluent mandarin to introduce its environment-friendly printer to potential investors.

John Tang, project manager of City Image Technology Ltd, said: “I was considering opening a new office on the Chinese mainland. Qianhai has become one of my first choices. It’s close to Hong Kong while offering the convenience for contacts with my mainland customers.”

Tang’s company, a 3D photo service provider, is keen to establish partnerships with mainland theme parks and tourism sites that would find its service useful. Tang said his company has clinched several successful projects in cooperation with similar clients in Hong Kong and Macao.

"The potential to tap the huge mainland market is making the E Hub an ideal location for the startups of young Hong Kong entrepreneurs,” said Witman Hung, president of the Hong Kong Internet Professional Association.

Hung’s association is in cooperation with E Hub to provide professional guidance, business network and opportunities to Hong Kong entrepreneurs.  

So far, about 25 top international investment companies and incubator projects, including the Chinese Academy of Sciences, China Telecom, CT Venture, Huawei, Lenovo’s Legend Star and DJI Innovations, have established a presence in E Hub.

They have pledged to provide strong and diversified support in finance and education to startups from both Shenzhen and Hong Kong.

Deng Yongqiang, chairman of Qianhai Houde Entrepreneur Incubator, said his company has invested in about 10 Hong Kong startups in E Hub.

"We have invested 200,000 to 500,000 yuan ($32,355 to $80,888) in each project and the incubating period is about three to six months,” he said.

Deng said he has a team of experts to organize regular trainings for startups in different skills, including project presentations to potential investors.

"In Hong Kong, IT developers are in short supply. The programing languages our schools teach are traditional C sharp and Java, while the market is using new web and app development language,” said Josie Tam, chief solution officer and co-founder of Techpacker, a startup based in Hong Kong.

However, Tam does not plan to open an office in the E Hub before he can get comfortable with government policies and the legal and tax environment on the mainland.

To address such concern, the business division of the Qianhai administrative bureau has begun providing professional services on policy, management, law, finance, training and marketing to Hong Kong entrepreneurs.

HK entrepreneurs spreading their wings at Qianhai

Chief Executive Leung Chun-ying (second from right), Zhang Xiaoming (first from left), director of the Liaison Office of the Central People’s Government in the Hong Kong SAR, and top Guangdong officials at the launch of the Qianhai E Hub on Dec 7.

Leung’s application to set up in E Hub took him about a week. It took another week to arrange an interview. Now he is looking forward to start working in the E Hub premises in mid-January next year.

Companies operating in E Hub would automatically qualify for a reduced corporate income tax rate of 15 percent and qualified overseas talents working there are entitled to income tax rebates.

Tam said transportation cost is also another important factor to consider since they are still in the initial stage of startup business.

Leung once shared the same hesitation. “Since there are a lot of uncertainties for us about starting a business on the mainland, we were also a little worried about issues such as time management as many members of our team would have to travel between Qianhai and Hong Kong very frequently,” he said.

To make life easier for employees of Hong Kong companies located in E Hub, management of the facilities has introduced a shuttle bus service that stops at seven different locations in Hong Kong. Or they can choose to live in the on-site serviced apartments with another 140 young entrepreneurs at a reasonable cost.

However, Tam said it’s not easy to find partners sharing a common goal and mindset. It may take some time for Shenzhen and Hong Kong entrepreneurs with different education backgrounds and culture to integrate, he said. Qianhai’s E Hub can expect some fierce competition from Hong Kong in attracting young entrepreneurs. For instance, the HKSAR government-owned Cyberport, a digital community located on southern Hong Kong Island, has been most aggressive in roping startups with promise.

Cyberport is determined to establish itself as a leading ICT (information and communications technology) hub in the Asia-Pacific region, Paul Chow Man-yiu, chairman of Hong Kong Cyberport Management Co Ltd, told a media briefing on Tuesday.

Besides providing low rents office spaces for startups, Cyberport has an Entrepreneurship Centre, the mission of which is to nurture ICT startups through the provision of financial assistance, support and professional services during the early stages of ICT startups’ commercial development through its Cyberport Creative Micro Fund (CCMF) and the Cyber Incubator program. The CCMF is a seed fund program that promotes innovation and creativity through sponsorship of ICT projects or business concepts.

Successful applicants with proof of concept for developing prototype products over a six-month project period will be granted HK$100,000 ($12,900) in cash. By March this year, 45 projects have received the seed fund, according to Cyberport’s annual report.

Cyberport also provides startups with well-equipped facilities and services under the Cyber Incubator program. From July 2013 to March this year, Cyberport held more than 60 meetings with leading ICT companies and consultants from renowned organizations, such as Google, Microsoft, Hong Kong Business Angel Network and Tencent, to give its incubatees one-on-one consultations to help them enhance their fundraising and pitching capabilities.

By the end of March 2014, Cyberport’s tenants have raised more than HK$100 million of angel funding.


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