Looking to get started with doing your business in Hong Kong? Or start in Hong Kong and represent a Western brand throughout Asia? Hong Kong is a good starting point, and maybe you’re still researching how to make the leap from your day job to full time entrepreneur.
Approaching a Western Brand
So let’s say that you email a famous brand in USA telling them you want to represent them in Hong Kong. You’re still in your day job and don’t have a company just yet. But of course, before you invest the time and money making the business setup, you want to make sure you have a business to actually do!
It is somewhat a chicken or the egg here. When you approach another company wanting to do a deal with them, they will feel a bit strange if you don’t yet have a company established.
This is why I recommend having a company registered, and being fully prepared for their questions when they reply to your inquiry.
What Will These Companies Ask For?
So depending on the product type, and the size of their business, they will ask for different things. Yet at the same time, they won’t ask for things that they can see at face value when you reach out to them. So here are the main things to keep on hand when they do ask you.
Most Important – Don’t Look For Excuses To Procrastinate!
Before I go through the list of items, I don’t want you to use this as a reason to further delay reaching out to potential brands and partners. You can tell them your company is being setup and you can still get information about their reseller pricing, setup calls with their business development team, etc.
You could use a trade name to get going, or if worst comes to worse, start with smaller companies who don’t have as much leverage to require you sending too much information up front to justify having a business conversation with them.
Main point – just keep pushing. Make steps every day to work towards this new business goal!
If They Ask For a Business License, Send them your BRC
So the world of international business is a complex one. And companies verifying who they are doing business with will have trouble really verifying. Some will ask for a business license from your company.
Don’t get too caught up with this and think you need to spend more money on top of the business you already have!
Most of the time, you can “get away with” your default BRC license. This is the Business Registration Certificate, and all Hong Kong corporations are required to renew this yearly. This is the number connected to your company tax ID at the IRD (Internal Revenue Department) and allows anyone to look up your business status in Hong Kong. Have you been paying your taxes, are you in good standing with the Hong Kong business bureaus?
I have sent this to other companies when they ask to verify my business license.
But of course, as always, “it depends”. Are you doing some special type of business that could require special certifications in Hong Kong? Maybe, but I’d still try sending this over to get started.
Your CI Is The Most Important Document
The next document isn’t really a business license, but instead your proof that your company exists inside Hong Kong. It’s call the CI, standing for the certificate of incorporation. This is issued to you once the company is established, and does not need to be renewed.
It is a single sheet of paper that shows the CI number (company ID number) and the name of the company. There is also the incorporation date on it. No other information, but someone with the CI number can research about your company in the government databases and dig in for more information if required.
This one I also include with the BRC, as it looks a lot more professional and serious looking.
NNC1 Is A Bit Too Intimate
Another document you could show is the NNC1, which shows who the owners and directors are. How many shares are outstanding, and other personal information.
I don’t imagine that many would want to disclose this to a new business alliance, but it depends on how intimate you will be with the counterpart. First I’d just start with the CI and the BRC. They may come back and want to know who the owners of the company are, and then ask for this or the latest Annual Return (NAR1).
Please bear in mind, that once you open a company in Hong Kong, this information can be requested from the government databases, so don’t think your information is hidden. That is one reason Hong Kong is seen as a good place to do business, as it is transparent on who the owners of the companies are. If you want to hide your personal ownership from the company, you should look into an offshore company like a BVI.
So, while you may want to hide some ownership information on the first exchange with a business you’re engaging with, don’t think they can’t pay to research more info.
DUNS (Dun and Bradstreet) Number
This is more a USA thing, but they do have a presence in Hong Kong. I wrote up a complete guide on getting a D-U-N-S number for your Apple developer account in Hong Kong, so check that out.
This is a system to see if anyone has filed complaints against this business in the past. You can also display this proudly on your website or place of business as well.
If you go ahead with this number, you can show that in your application to be a distributor of a famous brand overseas. Or other business relationship encounters. Even retail consumers will recognize this logo and feel a bit more safe to engage in business with your company.
Business Is Not An Exact Science, Its Negotiating
Again, while I know a lot of readers of the blog want the exact formula, in business often times the answer is “it depends”.
When a company you approach to engage in business with asks for your company license, what they are really saying is “I don’t know who you are, can you prove to me you’re a legitimate business partner for me”.
If you are planning to outreach to a lot of businesses, make a folder on your computer with all the documents together. You can make it part of a “media kit” or “partner kit” and send them one nice zip file bundle.
I’d even consider adding more information about your business, such as a business overview and introduction. You may know this brand forever, and been dreaming to be their authorized distributor in Hong Kong for years, but they don’t know you from a hole in the wall.
Set a nice impression and give them a complete business case. The contact person you are talking to in the company also doesn’t want to embarrass themselves introducing the other executives an unqualified business partner. So make them look good, have all your information ready to go, and you will get a much higher response rate from your email outreach to potential business collaboration partners.
Think From The Other Perspective
In business, and in life, it’s always good to think of things from the receiver’s side. The get an unsolicited email to their customer service email inbox. It is from a personal gmail address. It is asking to be a distributor in Hong Kong. Maybe a few paragraphs about how you love their product and have friends who want to buy it here too.
Now, how should they react?
They’ll probably see you as an individual working on nights and weekends trying to make some extra money. No harm in that! But, you don’t want to seem like that to a large brand company.
So, let’s approach this in a different way.
You email them from your company email address, you have a limited company, and you explain you want to be their distributor in Hong Kong and potentially China and other parts of Asia. You say you’d like to request a wholesale pricing list, and you have your company introduction and business overview packet you can send if they would like.
I don’t like to attach files on the first email. It’s better to ask them for their permission and get their interest.
So now, this customer service rep receives it, and it seems much more important and professional! They forward it on the the sales department or business development officer. He or she receives it, and probably will check your company website. They will see a simple brochure website, one page is enough, but it is there. Maybe they will Google you. But, why not give you a shot, and they ask you to send your company introduction and overview.
Now you have a much better position to negotiate from!
Basically, the Brand Company Wants to Cover Their Behinds
Really, boiling this down even more, they need to protect themselves. They don’t want a competitor, or an unqualified individual, to get their pricing list, their marketing materials, and other inside information.
On top of that, they also want to make sure if there is ever a legal issue in that region, they can at least say they had some due diligence done on you. Maybe a potential lawsuit for an issue with selling an expired good. They can say “our distributor is XYZ Limited, talk to them”, and then the Hong Kong buyer will chase after you.
They want to make sure you are legit, have the right intentions, and have some “skin in the game” when times may get tough down the line.
Look Legitimate, And Be Professional
Hope today’s guide on building a case to be an Asian distributor helped you out. With an engineering background myself, a lot of times I want to know the formula or checklist.
Really, put on your suit and tie, virtually, and make these Western brand owners excited they have the chance to work with you!
Best of luck on your international business expansion. All feedback, questions are welcome in the comments section below, cheers!