Hong Kong may boost start-up ecosystem by offering more incentives to overseas angel investors, says financial secretary

Hong Kong will consider offering more incentives to attract overseas angel investors to the city, Financial Secretary Paul Chan Mo-po said on Sunday.

Writing in his personal blog, Chan said angel investors – private-equity fund managers that provide the first round of funding for newly created companies – were important to the ecosystem driving innovation and developing Hong Kong’s technology industry. At the moment, these investors are operating mainly outside the city.

“Angel investors can offer their capital and professional advice to help newly created start-ups grow. After a certain stage of development, these start-ups will then be able to attract other private equity or venture capital to invest in them, and later on they may go public and list,” Chan said.

“The Hong Kong government has been changing laws to make it easier for these companies to come to Hong Kong. The government will also consider offering more tax and other incentives to attract overseas angel investors to set up here,” Chan added, without giving more details.

He wrote the blog after a visit to Silicon Valley and Seattle last week. “The trip showed Silicon Valley was also aware of Hong Kong’s efforts to promote start-ups and opportunities in Greater Bay Area. As of the end of last year, Hong Kong had 2,600 start-ups, eight of them reaching unicorn valuations,” Chan said. Unicorns are privately held start-up companies valued at more than US$1 billion.