Hong Kongese businesses looking to expand their global presence frequently look to the United States. While goods have seen a steady sales decline over the past decade, many Hong Kongese services businesses are finding success in the USA. The past ten years have seen a 45% increase in services exported to the US, in services as diverse as travel, finance, and transport.
With only 7 million people, the Hong Kong market is only a fraction of the size of the US market. The United States’ service-oriented economy, stable currency, and consumer culture make it an excellent starting point for international expansion.
Like every other business opportunity, selling your services across international borders comes with risks and challenges. Foreign businesses need to understand the differences between the two countries. Laws are different, banking can be complex, and transferring money across borders can be expensive and confounding.
"The United States is one of the most accessible markets in the world, but there are trade controls in place, as well as both federal and state tax codes."
Understanding the Country
While the United States appears to be one nation, the reality is much different. Foreign businesses need to navigate a complex maze of federal regulations, state law, and local ordinances to be successful. Licenses that are valid in one part of the country need to be reapplied for in other areas, and the requirements for each may be different.
The United States is one of the most accessible markets in the world, but there are trade controls in place, as well as both federal and state tax codes. These can create unique challenges to businesses that aren’t prepared to deal with these issues.
It’s also important to recognize the diversity of the US population. While your company is rooted in Hong Kong, your customers come from many different backgrounds and cultures. Expanding your working team to include a diverse mix of employees is vital. Not only will your workforce reflect your customer base, adding in a mix of voices into the decision-making process will lead to better strategic decisions.
Corporate Decision Making
Asian businesses don’t always recognise the significance of time zones. Standard business hours in the United States take place between 9 PM and 8 AM Hong Kong time. So, if a crisis unfolds, and your corporate headquarters is based in Hong Kong, your next-day response will appear as unresponsive in the rapid 24/7 US news cycle.
As you move forward with your global expansion, you’ll need to consider locating your headquarters in the US, where it can react to events and make decisions in real-time. For those that need to maintain their Hong Kong headquarters, it’s vital to have decision makers and spokespeople available in the US so business doesn’t stall when a decision is needed at 4 AM in Hong Kong.
"Banks make it nearly impossible to open accounts, impose limits on money transfers, and charge a fortune to exchange currencies and transfer money across borders."
Handling International Financial Transactions
As surprising as it may seem, financial transactions are one of the most challenging elements that foreign businesses are facing. Banks are notoriously difficult for foreign businesses. They make it nearly impossible to open accounts, impose limits on money transfers, and charge a fortune to exchange currencies and transfer money across borders.
Yet, having a local bank account is vital to foreign businesses. Customers trust payment tools they recognise, and vendors expect to be paid in US—and not Hong Kong—dollars. There is no getting around the need for a localised financial presence.
Fortunately, the advent of the online economy has led to the creation of alternative financial tools. E-wallet services provide the benefits of a local bank account without the burden of lengthy time delays or the high cost of excessive fees. Look for a tool that provides local US currency accounts, allowing customers to settle money directly to your account. Make sure the solution you choose includes credit card processing, the ability to transfer cross-border payments, fx conversion, as well as the invoicing software you’ll need for your B2B customers.
E-wallets make it easy and inexpensive to transfer money across borders, exchange currencies, and manage multiple currencies. As you expand into new markets, your e-wallet should grow with you, allowing you to manage your money everywhere you do business.
Moving Outside Your Comfort Zone
When businesses expand beyond borders, many business owners find themselves working in foreign languages, trying to market their products to cultures that they barely understand. The last thing they want to deal with are global payment merchant services. As you grow your business, let the financial experts at MoneyNetint provide the financial tools and e-wallet you need for success.
MoneyNetint has been supporting internationally expanding businesses since 2004. Find out how they can help you with cross border payments, multi-currency accounts, and bringing your Hong Kong company to the USA.