Headhunter Shirley Lee's business card lists an office at Eton Tower in Causeway Bay, but anyone paying an unscheduled visit won't find her there. The MauI Business Centre, which occupies the premises, merely provides a 'virtual office' service for clients. Lee works from home and the thousands of dollars she has saved each month on rent and secretarial support has helped keep her business afloat during the downturn. 'When the recession hit, we really needed to cut costs. So we stopped paying rent and switched to a virtual office,' she says. For an HK$800 monthly fee, Lee gets the use of a downtown address instead of a cheap Kwai Fong space for her correspondence, a trilingual receptionist who fields calls and sorts mail, notifying her of bank statements and government letters which may require urgent responses. And when she needs to host a meeting, Lee can book a state-of-the-art meeting room for a few hundred dollars more. 'The service is about the same as a physical office, but I am saving thousands of dollars a month,' she says. Managers seeking to avoid the hassle and costs of running full-facilities offices often take small spaces at business centres. Amid economic uncertainty, many find even this unnecessary and turn to virtual office providers such as MauI. Uptake at smaller centres has grown by about 10 per cent, with established companies, particularly those with A or B-grade office addresses, recording bigger increases. At The Executive Centre, for example, virtual office business has grown 50 per cent this year, with 500 new accounts, bringing its total in Hong Kong to 1,500. MauI booked about 50 new clients this year, registering a 33 per cent rise. Regus, which runs the largest virtual office network in Hong Kong, also registered double-digit growth during the downturn, says regional marketing director Paul Gregory. 'As people left their jobs, they came to us. Even if they were consultants or launching a start-up, they needed to retain a professional business address,' he says. 'We call it the address to impress.' Clients have their pick of premises from Exchange Square in Central to smaller commercial towers in Mong Kok, Tsim Sha Tsui and Wan Chai. 'In the current climate it's probably the least risky way to start a business here,' says MauI manager Joe Lee Ka-ling. 'You use the contact point to measure the initial interest. After about six to 12 months, you can usually tell if your business will continue. If so, then you can look for a physical office.' Some clients don't need the office space, Lee says. 'They need an address to register for a bank account or to start their own companies. They work from home, which may not be in Hong Kong.' Besides small business owners, MauI's clients include retirees, artists and freelance writers as well as offshore consultants seeking a presence in low-tax Hong Kong. Even multinational giants such as Google, Morgan Stanley and HSBC are using virtual offices to reduce costs, says Teresa Cheuk Pik-shan, group virtual office director of The Executive Centre. 'Sometimes a branch will become a satellite or representative office. It's very important to a brand to be able to boast a local address, it lets them absorb local opportunities without having to form a limited company within that city.' The service is increasing popular with companies eyeing the mainland market, which use Hong Kong as an entry point, says Fion Sen Lai-kit, managing director of Bridges Executive Centre. 'They don't have actual operations here but they need a correspondence address and contact point in Hong Kong to handle the co-ordination work,' she says. Such a set-up 'allows the company to enter a new market, barring legal rights, without having to spend very much', says Gregory. 'Typical commercial leases run for at least a couple of years but a virtual office can give you an address for a couple of months.' He says: 'The office of the future is completely mobile. The nature of virtual offices works along those lines.' Because the business is transient, virtual office centres typically require payment up front. 'There have been cases when tenants suddenly disappear. We usually discover this when they don't reply to e-mail or phone calls any more,' Lee says. 'It doesn't affect us; we just terminate their accounts.' Charges depend on the level of assistance required - whether calls are diverted immediately or messages taken instead; or if mail is forwarded or picked up - but rarely go above HK$1,000 a month. It can cost as little as HK$250 a month for the most basic service - the use of an address - which is all you need to set up a company and open a bank account in Hong Kong. Last year, American entrepreneur Rob Lok launched his company, BeiCii Productions, through a Central Tower address run by Bridges Executive Centre. 'I used them to get us incorporated and their address for our correspondence,' Lok says. Virtual offices offer a convenient transition for start-ups. For instance when Tang Lo-nar launched her own accounting firm in 2005, she didn't have the cash to rent an office space for herself and two part-time staff. She estimated that renting an office would cost at least HK$8,000 a month, a full-time secretary another HK$7,000 and utilities might require another HK$1,000. That meant she would have fork out about HK$16,000 before seeing a single pay cheque. By working at home and renting an address, Tang pared initial spending by 93 per cent. When business picked up a few months later, she upgraded to a ready-made office space at the same company. There's more to selecting a virtual office centre than the address it offers, she says. Some may merely be renting the premises, so if the operator moves, your address must change too. 'Each operator has a different sort of personality, which of course affects your business,' Tang says. 'A-grade offices in Central, for instance, are efficient but not as friendly. Receptionists at B-grade offices in Wan Chai and Causeway Bay seem warmer but may not speak English as well. 'So choose a virtual office based on what you want your company to project,' she says. 'It's a good idea to check out the place first.'
