Why startup founders and investors are flocking to Hong Kong

Hong Kong has long been a sought-after destination for international business and investment, renowned for its world-class infrastructure, strategic location, business-friendly tax system, and multicultural environment.

Today, as evidenced by its burgeoning startup scene, Hong Kong's appeal increasingly extends beyond its financial markets, drawing in innovators seeking a platform for growth. Since 2020, the total number of startups has grown by nearly 50%, reaching a total of 4,694 in 2024.

Part of the credit goes to the start-up friendly policies from the Hong Kong Government which focuses on incentivising innovation and access to the market of Mainland China and the rest of Asia. The rest of it – to a diverse ecosystem that naturally encourages the interplay of talent, capital, and new ideas.

Hong Kong’s startup scene by the numbers

With Hong Kong’s reputation as a financial hub, it should come as no surprise that financial services is its forte in the world of startups, too. According to the 2024 Startup Survey conducted by InvestHK, the leading sector remains FinTech, with 619 startups, followed by Information, Computer & Technology (517), E-commerce (410), and EdTech (406) startups. Noteworthy growth has also been observed in HealthTech and GreenTech sectors, reflecting global trends and local priorities.

28% of startup founders in Hong Kong are non-locals, speaking to the availability of not only multilingual, but also world-class talent. Mainland China continues to be the largest source of non-local founders (40.3%), followed by the United Kingdom (10.7%), the United States (9.0%), France (5.6%), Australia (4.2%), as well as Canada, Germany, India and others.

This dynamic startup ecosystem has proven remarkably fertile, nurturing more than 20 unicorn companies since Hong Kong's first one in 2017. The city has also established itself as the world's second-largest fundraising hub for biotechnology enterprises, attracting substantial investment in a critical sector.

Government support and initiatives

The Hong Kong government is committed to developing the city into an international innovation and technology (I&T) hub – it has invested more than USD 25 billion in recent years to promote I&T development – and it’s moving forward with purpose.

The Hong Kong I&T Development Blueprint outlines a clear development path and strategic planning for the next 5 to 10 years. This comprehensive roadmap focuses on enhancing the I&T ecosystem, promoting "new industrialisation," expanding the I&T talent pool, developing a digital economy and smart city, deepening I&T cooperation with Mainland China, and leveraging Hong Kong's advantages to foster global I&T collaboration.

 This blueprint and I&T focus come on top of an already impressive track record of innovation. For instance, the Shenzhen-Hong Kong-Guangzhou cluster has come in second in the Science and Technology Cluster ranking of WIPO’s (World Intellectual Property Organization) Global Innovation Index – for five consecutive years.

 Moreover, five universities in Hong Kong are ranked among the top 100 on the QS World University Rankings 2025, providing a steady pipeline of highly skilled graduates across various disciplines.

 All of the above has contributed to a spike in I&T companies with 120 new establishments of overseas and Mainland companies in Hong Kong in 2024 – a figure that is rising year-on-year.

 At the same time, specific support mechanisms are already in place to nurture startups. Hong Kong Science and Technology Park (HKSTP) and Cyberport provide comprehensive support for startups and scale-ups through various programs. These include incubation, acceleration, and funding opportunities, and are growing more numerous by the year.

Hong Kong's distinct advantages

Of course, Hong Kong's attractiveness as a global tech launchpad is enhanced by its distinct advantages and legacy as a business hub. After all, it’s Hong Kong.

The city is recognised for its simple and low taxation system and has been named the world's freest economy. With only three direct taxes, a range of generous allowances and deductions, and no sales tax, VAT, capital gains tax, or estate tax, Hong Kong provides a competitive environment for businesses and investors.

Strategically located, Hong Kong also offers unparalleled access to Mainland China and the broader Asian market. Essentially, it’s a "super-connector" and "super value-adder", crucial for companies seeking to expand their reach within the region – or scale-ups aiming to put their ideas to the test. This is facilitated by incredible connectivity, with all major regional hubs just one short flight away. Plus, being home to the world’s busiest air cargo airport also helps – Hong Kong is the principal gateway between Mainland China and the rest of the world.

InvestHK – Hong Kong is for business

Hong Kong's unique combination of a business-friendly environment, proactive government support, and strategic advantages positions it as a prime launchpad for global tech startups – and a tantalising destination for investors on the search for tomorrow’s unicorn.

In either case, InvestHK can assist

InvestHK – Hong Kong Government’s department for attracting and retaining foreign direct investment – plays a crucial role in supporting companies looking to establish or expand their presence in Hong Kong. In 2024, InvestHK achieved a record-breaking year, assisting 539 overseas and Mainland companies, a 41% increase compared to 2023.

InvestHK provides free and confidential facilitation services to support interested parties in planning and implementing their business development plan for Hong Kong.

For more information, please visit investhk.gov.hk and startmeup.hk.