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Data Dynamics – Set Up a Data Centre in Hong Kong
Be future-ready and set up a data centre in Hong Kong with 3E Accounting’s quick-read checklist.
The rapid development of global ICT (information communication technologies) has driven the need for data centres exponentially. Statistics show that Hong Kong’s data centre market is expected to garner close to two billion USD by 2025. As far as investment goes, you really can’t go wrong when you set up a data centre in Hong Kong.
Doing Business in a Data World
Hong Kong is renowned as a global financial hub that has good governance, well-developed infrastructure and low taxation. It is well-placed as the go-to data centre destination in Southeast Asia.
Data centres are centralized locations that house computing and networking equipment. They facilitate the sharing of an organization’s equipment and data with end-users. Data centres can be:
- In-House: these can be wholly owned and managed by the company (Enterprise Data Centres) or managed by a third-party (Managed Services data Centres)
- Off-Site: set-up and operated by a third party (Colocation Data Centres) or hosted by public cloud service providers (Cloud Data Centres)
To get started, you will need to incorporate your company. This can be done online with the HK company registry. Company structures include:
- Sole Proprietorship or Partnership
- Private Limited Company (PLC)
- Public Limited Company (PC)
- Company Limited by Shares or Guarantee
- Branch or Representative Office
Your business will need a corporate bank account, and you should ensure all tax registrations are done.
Due to the scarcity of land in Hong Kong, it is becoming harder, and more expensive, to establish new sites for data centres. As such, the government is leading the push for small-scale, cloud-based data centres that need less space and infrastructure to operate.
Investors looking to set up a data centre in Hong Kong can:
- Buy greenfield sites outright from the government
- Lease and convert existing industrial buildings
- Buy or rent available sites in the open market via private deals
If you do choose to lease a site, you should check if the site permits the setting up of a data centre. You can apply for a lease modification or waiver from the Lands Department in the event there is no permission. If you choose to buy a site, you will need to be aware of Statutory Zoning Permissions. Some sites, especially on the open market, have land-use restrictions. It’s advisable to engage or seek advice from professional consultants, such as 3E Accounting, to ensure proper due diligence is done.
Most business activities in Hong Kong do not require a license. Those that do, need approvals from the Trade and Industry Department. Due to the nature of data centre set-ups, further permissions are necessary from specific departments.
Hong Kong’s government has set up easily accessible avenues to handle all matters related to data centres. These departments offer pre-submission conferences and include the:
Other considerations that need to be addressed include:
- The Buildings Energy Efficiency Ordinance (BEEO) – from the Electrical and Mechanical Services Department
- Clearances from the Transport Department
- Approvals from the Buildings Department on sustainable designs
The Future is Here Now
Data centres are becoming essential to the way businesses operate. As the push for e-commerce takes dominance, more and more entrepreneurs are looking to set up a data centre in Hong Kong. 3E Accounting’s skilled consultants are on hand to ensure performance and efficiency when it comes to starting your business.
Contact 3E Accounting today to get your business future-ready with the right professional alliance.