A Guide to Incubation Programmes for Tech Start-ups in Hong Kong

Innovation and technology (“I&T”) took centre stage in the 2022 Policy Address delivered recently by Hong Kong Special Administrative Region’s (“HKSAR”) Chief Executive, Mr John Lee. Identified as the next growth engine to drive sustainable economic development, entrepreneurial technology is a recurrent theme that runs through many of the HKSAR government’s plans for the city. To propel Hong Kong’s transformation into an international I&T centre through and through, a slew of governmental initiatives have been promulgated, including the earmarking of HKD10 billion for the launch of the “Research, Academic and Industry Sectors One-plus Scheme” in 2023, which aims to accelerate the commercialisation of research and development (“R&D”) outputs. Additionally, the Hong Kong-Shenzhen Innovation and Technology Park in the Lok Ma Chau Loop, the construction of which is now proceeding in full steam, will serve as the “bridgehead for I&T cooperation between Hong Kong and Shenzhen”. The HKSAR government is targeting to attract no fewer than 100 high-potential and strategic I&T enterprises to set up in or expand to Hong Kong in the next few years.

Incubation programmes provide an entry point and soft landing into Hong Kong’s rich and vibrant I&T ecosystem. For budding tech companies who often face an uphill struggle due to a lack of funding and access to hi-tech facilities, an incubation or accelerator programme can maximise the chances of entrepreneurial success by bridging the gap between conception and realisation, offering a supportive environment and the requisite infrastructure conducive to innovation and subsequent scaling-up, and providing expert advice in the form of mentorships.

Hong Kong offers a wide range of incubation and accelerator schemes to help you progress on your I&T journey. The guide below provides information on those offered by Hong Kong Cyberport and Hong Kong Science and Technology Parks (HKSTP).

• Cyberport Incubation Programme
• Cyberport Accelerator Support Programme
• HKSTP Ideation Programme
• HKSTP Incubation Programme
• HKSTP Incu-Bio Programme
• HKSTP Acceleration Programme
• HKSTP Elite Programme

Cyberport Incubation Programme

Aimed at digital tech entrepreneurs and start-ups, the Cyberport Incubation Programme (“CIP”) provides many resources to incubatees, including a range of business and professional services at their disposal, to facilitate and accelerate their development. Incubatees can receive up to HKD500,000 of financial support over 24 months and can elect to participate on-site at Hong Kong Cyberport’s premises or off-site.

Applicant eligibility

The following criteria will be taken into account when considering the eligibility of applicant enterprises:

• A feasible business plan for a product or service that will be ready for marketing in 12 to 18 months.
• The applicant enterprise must be a Hong Kong-registered company limited by shares (or in the process of being incorporated) that is engaging in the field of digital technology. The date of incorporation must be less than seven years before the date of the application deadline. In the case of companies in the process of being incorporated, incorporation should be concluded within 30 calendar days following the application deadline.
• The principal applicant working for the applicant enterprise cannot be a founder, co-founder or director of any of the following:
  • A company of the same nature currently enrolled on any incubation programmes operated by Hong Kong Cyberport, HKSTP or Hong Kong Design Centre;
  • A company of the same nature that has previously participated in and completed any incubation programme operated by the above institutions.
• The founders of the applicant enterprise – legally and beneficially – must hold no less than 51% of the company’s shares at the time when the application is made and throughout the duration of the programme.

Project eligibility

• The nature of the project should be related to digital technology.
• The project should not have previously received and shall not be receiving funding granted by other publicly funded institutions and/or programmes which provide support of a similar nature to that offered by the CIP.
• Examples of publicly funded institutions and programmes include:
  • Design Incubation Programme by Hong Kong Design Centre;
  • Incu-App Programme by HKSTP;
  • Incu-Bio Programme by HKSTP;
  • Incu-Tech Programme by HKSTP;
  • Leading Enterprises Acceleration Programme by HKSTP.

In addition, a project’s potential will be assessed against the following criteria:

• Market viability with milestones and contribution to Cyberport’s strategic clusters (30%);
• Quality and competence of the management team (20%);
• Business scalability (20%);
• Functional prototype or product secured by design to solve a real problem (20%);
• Innovativeness (10%).

Click here for more information.

Cyberport Accelerator Support Programme

The Cyberport Accelerator Support Programme (“CASP”) aims to prime Cyberport incubatees and alumni for their launch in international markets, providing up to HKD300,000 to each successful candidate.

Applicant eligibility

• Applicants must be one of the following:
  • A grantee of the Cyberport Creative Micro Fund (“CCMF”);
  • An incubate of the CIP; or
  • A Cyberport alumnus who graduated within five years up prior to the application submission date.

• Applicants must apply with the same legal entity with which they were enrolled on the CIP. For grantees of CCMF, applicants shall establish a legal entity in accordance with relevant requirements.
• It is mandatory for applicants to have been accepted on to one of the accelerator programmes endorsed by Hong Kong Cyberport. These include:
  • 500 Startups Accelerator Programme;
  • 500 Startups Global Launch Programme;
  • Accenture Fintech Innovation Lab APAC;
  • Berkeley SkyDeck Accelerator Program;
  • F10 Fintech Accelerator;
  • Startup Xchange;
  • Techstars.

A comprehensive list can be found here.

• Applicants should not have previously received and shall not be receiving funding granted by other publicly funded institutions and/or programmes which provide support of a similar nature to that offered by the CASP or the CIP. These include, for example:
  • Dedicated Fund on Branding, Upgrading and Domestic Sales;
  • SME Export Marketing Fund;
  • Programmes by the Innovation and Technology Fund;
  • Leading Enterprises Accelerator Programme.

Reimbursable items

The total reimbursement claims per applicant shall not exceed HKD300,000.

Qualified reimbursable items and the corresponding reimbursable percentages are shown below:

A) Programme fees paid to participate in the relevant endorsed accelerator programme upon successful admission– up to 75%

B) Office rental at a designated location of the relevant endorsed accelerator programme – up to 75%

• Qualified expenses include real estate agency fees and stamp duty for the office tenancy, legal fees for tenancy agreement execution, and management fees for rented office.

C) Internship staffing expenses – up to 50%

• The reimbursable amount in respect of internship expenses include 50% of the intern’s monthly basic salary (capped at HKD9,000 per intern per month) and 50% of employer’s Mandatory Provident Fund contribution for the intern (capped at HKD450 per intern per month);
• Other expenses, such as allowances and fringe benefits, are not reimbursable;
• The recruited intern must be a permanent Hong Kong resident or a person permitted to reside in Hong Kong for no less than seven years, and is either enrolled on an internship programme offered by a recognised local or overseas tertiary institution or has graduated within the last 24 months;
• Only expenses for a maximum of three interns at any one time are reimbursable.

D) Travel and accommodation expenses for attending the relevant endorsed accelerator programme at the designated venue

• Qualified expenses include international or inter-state air, ground, or sea travel tickets to the designated venue for the purpose of attending the relevant endorsed accelerator programme;
• Accommodation expenses, including stays at hotels, serviced apartments or apartments, for the purpose of attending the relevant endorsed accelerator programme;
• Eligibility is limited to expenses incurred one week prior to the commencement of the endorsed accelerator programme and up to one week following its completion.

E) Promotion and marketing expenses at the designated venue for the purpose of completing the relevant endorsed accelerator programme – up to 75%

• Advertisement costs for printed media and fees for enlisting online marketing services (capped at HKD50,000);
• Printing costs for marketing materials;
• Fees for conducting market research and marketing activities consultation;
• Fees for trade fair or exhibition at the designated venue of the relevant endorsed accelerator programme and associated costs of physical marketing collaterals (excluding expenses incurred from the production of souvenirs).

F) Fees for enlisting professional services for business establishment – up to 75%

• Qualified expenses include legal and consultancy services in respect of, for example, intellectual property consultancy services, accounting and auditing, services relating to the formation and execution of non-disclosure agreements and service contracts.
• The following expenses are not considered eligible for reimbursement:
  • Company registration;
  • Company restructure (except for the purpose of fund raising);
  • Compensation or brokerage and agency fees for fund-raising activities;
  • Immigration services (including investment visa application);
  • Trademark and patent registration.

Click here for more information.

HKSTP Ideation Programme

The Ideation Programme is a one-year start-up support programme aimed at tech-focused entrepreneurs at the beginning of their entrepreneurial journey, helping them transform innovative ideas from concept into reality. On the programme, successful candidates can acquire the necessary skills to kickstart their business. Comprehensive support is provided at every stage, from business modelling, attracting investment to finetuning technical development.

Eligibility

Qualified applicants must:

• Have an innovative idea supported by relevant R&D and business planning; and
• Be a Hong Kong Identification Card holder and aged 18 or above; or
• Have a limited company incorporated in Hong Kong for less than two years before the start of the application period; or
• Have a team (incorporation of a limited company in Hong Kong must be completed before the start of the programme).

Funding support

Upon successful admission, participants can receive HKD100,000 of seed funding granted in three instalments – subject to the progress achieved as laid out in the one-year development plan formulated under appropriate guidance. Participants are required to attend the ten prescribed courses on themes such as business management, Hong Kong’s start-up ecosystem and venture capital, in order to receive the funding in full.

Upon completion, participants are advised to continue their entrepreneurial journey by applying to a relevant HKSTP incubation programme.

Click here for more information.

HKSTP Incubation Programme

The three-year Incubation Programme aims to support the growth and development of tech start-ups in a wide range of areas from market exploration, business development to initial technical builds. All-encompassing support is provided in the form of funding, R&D support, mentorship, investor matching and scaling-up support.

Applicant eligibility

The applicant enterprise must be:

• A Hong Kong-registered technology-based limited company incorporated within five years before the application submission date.
• The founder(s) of the applicant enterprise and/or the applicant enterprise itself:
  • Must not currently be participating in other funding or incubation programmes operated by either HKSTP or Hong Kong Cyberport. However, admission to the programme may be permitted where the applicant enterprise or its founder(s) had been admitted to and had completed such programmes, on the condition that the enrolment on the Incubation Programme would only be the second time to participate in programmes of such nature.

Project eligibility

• The scope of the applicant enterprise’s activities must be technology-related, such as in the field of electronics, information and communications technology, material and precision engineering, or green technology.
• The innovation has been market validated with a Minimum Viable Product or prototype.
• The project involves a disruptive application, has an innovative business model and offers an impactful product or solution.

Additional requirements

• The founders of the applicant enterprise – legally and beneficially – must hold no less than 51% of the company’s shares at the time when the application is made and throughout the duration of the programme. The founders can be individual shareholders, non-operating holding companies or operating holding companies that fulfil the applicant eligibility criteria set out above.
• The applicant enterprise’s full-time R&D staff, including engineers and technologists, must legally and beneficially hold at least 10% of equity.
• The applicant enterprise must hire at least two full-time staff upon acceptance on to the programme.
• No fewer than two full-time staff must be based at HKSTP’s premises or at any other approved location for the entire duration of the programme to operate the applicant’s business; and the scope of work of at least half of the staff shall be limited to conducting R&D activities as stated in the application.
• The approved premises should be used primarily for R&D activities, not for sales and marketing activities.

Funding support

A successful applicant can receive a financial subsidy of HKD140,000 for R&D and business development activities, up to a maximum of HKD840,000, subject to satisfactory periodical assessment. In addition, incubatees can receive a rental subsidy of HKD12,500 per month and up to a maximum of HKD450,000 in total over the entire duration of the programme. Therefore, the maximum amount that an incubate can receive on the three-year programme is HKD1,290,000.

Click here for more information.

HKSTP Incu-Bio Programme

The four-year programme is targeted at biomedical tech start-ups in Hong Kong, aiding their all-round development and facilitating the materialisation of their transformational innovative solutions through the ample provision of funding, cutting-edge facilities, business support, investment opportunities as well as access to the local thriving biomedical ecosystem.

Applicant eligibility

Eligible applicants must fulfil all the criteria below:

• Must be a Hong Kong-registered technology-based limited company incorporated no more than two years before the application submission date;
• The applicant enterprise and its founding shareholders cannot be a previous or current participant of any incubation programmes operated by HKSTP, Hong Kong Cyberport or Hong Kong Design Centre, unless written approval to the contrary has been granted.

Project eligibility

• The applicant enterprise’s R&D activities should be conducted in key areas relating to diagnostic, therapeutic, medical device, or in other biomedical areas, such as regulatory or medicine use.
• All relevant technologies, innovations, or inventions to be developed and commercialised shall not involve infringement of any third party’s intellectual property rights.

Additional requirements

• The founders of the applicant enterprise – legally and beneficially – must hold no less than 33% of the company’s shares at the time when the application is made and throughout the duration of the programme. The founders can be either individual shareholders or non-operating holding companies.
• The applicant enterprise must employ at least two full-time staff, and all staff must have valid permits to work in Hong Kong legally.
• The premises provided by HKSTP should not be used for retail activities.
• The applicant enterprise must demonstrate that their R&D staff are sufficiently trained in laboratory operations, where applicable.

Funding support

The maximum amount of funding that an incubatee may be entitled to receive on the programme is HKD6,000,000. The breakdown is as follows:

A) Financial subsidy – HKD2,000,000

The financial subsidy will be disbursed in eight equal instalments of HKD250,000 each.

B) Regulatory Affairs Funding Support – HKD2,000,000

The above funding support is applicable to regulatory activities only.

C) Upfront grant – HKD2,000,000

The upfront grant subsidises 75% of qualified expenses incurred by the incubatee over the duration of the programme and will be disbursed in eight equal instalments of HKD250,000 each.

Eligible expenses are detailed below:

1. R&D expenses including salary of full-time R&D staff and student interns, laboratory equipment and consumables, IP licensing and development, public trials, and other relevant professional certification.
2. Non-R&D expenses including business consulting services, accounting and auditing services, legal services, sales and marketing, professional training, and international travel to attend scientific conferences.

Click here for more information.

HKSTP Acceleration Programme

The Acceleration Programme is a business-focused accelerator aimed at high-potential tech ventures at the growth stage, enabling them to fast track their entry into the international arena. A unique feature of this programme is that participants have the opportunity to launch their innovative products and solutions in the Greater Bay Area – a giant market of over 86 million people in 11 cities – not to mention the flourishing markets in the ASEAN region on Hong Kong’s doorstep.

Successful candidates will be welcomed into the biggest start-up ecosystem in Hong Kong and enjoy access to over 70 leading corporate partners and 110 mentors spanning 20 industries.

Since 2018, the programme has helped participants raise over HKD2 billion and scale globally, including in the United States, the United Kingdom and Australia.

Applicant eligibility

Applicant enterprises must fulfil all the following criteria to be eligible:

• Be a current incubatee of an HKSTP Incubation Programme, or have completed such a programme, or be a current tenant of HKSTP;
• Be a growth-stage tech start-up looking to expand globally;
• Have Hong Kong-based headquarters, executive functions and corporate CEO.
• Employ fewer than 100 employees;
• At least 50% of Hong Kong-based full-time staff must be engaged in technology-related work.

Project eligibility

The following technology-intensive areas fall within the funding scope:

• Information technology and telecommunications;
• Artificial intelligence and robotics;
• Electronics;
• Fintech;
• Biotechnology;
• Precision engineering;
• Green technology;
• Other technology-intensive areas not listed above.

Funding support

Acceleratees can receive financial subsidies of up to HKD4.8 million to cover their expenses for public relations, marketing, professional services and corporate compliance.

Click here for more information.

HKTP Elite Programme

Aimed at tech enterprises with very high growth potential, the three-year milestone-based funding programme helps aspiring unicorns scale globally and prepares them for the initial public offering or merger and acquisition process.

In addition to financial support, participants are offered all-round support in a wide range of areas from fundraising, business development, professional services to infrastructure.

Eligibility

Eligible applicants must be:

• A Hong Kong-registered company limited by shares established for more than two years;
• Have no fewer than 30 employees internationally;
• Willing to commit to signing a three-year lease agreement with HKSTP;
• Have exponential revenue growth and solid profitability;
• Have completed Series A round funding;
• Have set sights on the international market and have aspirations to become the next unicorn;
• Have a scalable and sound international business model.

Funding support

Successful applicants can receive up to HKD21.5 million in funding to propel their business growth, which includes a rental subsidy of up to HKD1.5 million.

Click here for more information.

What CW can do for you

We can help you kickstart your tech entrepreneurial journey by setting up the necessary business infrastructure, since incorporating a Hong Kong-registered company limited by shares is a prerequisite for all the above incubator and accelerator programmes. We offer a bespoke service package for tech start-ups, the aim of which is to provide a soft landing into Hong Kong’s start-up ecosystem by taking care of all matters relating to company and business establishment, ensuring ongoing compliance with various regulatory requirements, and providing guidance on the strategic formulation of the business proposal to be submitted together with the funding application – so as to maximise your chances of acceptance on to an incubator programme.