Kassey Lee examines the market for .hk domain names.

Being born and raised in Hong Kong, I’m aware that money and investing are part of the social fabric of this great city. In this article, I want to explore the topic of investing in .hk domains.

The .hk extension was released in 1990 while Hong Kong was still a British colony. Since 1997 when the city was returned to China, companies there have the advantage of operating from a domain in the .hk, .cn, or both extensions. This gives them the flexibility to target different audiences.

Take the example of Asia Business Centre, a Hong Kong-based provider of business management services such as company formation, offshore bank accounts, accounting, and virtual office. In addition to its English website developed on the AsiaBC.co domain, the company also uses AsiaBC.com.hk to provide content written in the traditional Chinese language (for Hong Kong audience) and AsiaBC.com.cn in the simplified Chinese language (for the mainland China audience).

Hosting a .hk (or .cn) website in Hong Kong has one advantage over doing that in mainland China –- no ICP license is required. Therefore, you can register a .hk domain and launch its website on the same day to start your business in Hong Kong. (All websites hosted in mainland China must carry an ICP license.)

How do you register a .hk domain? According to Wikipedia, direct registration of .hk domains is open to “local or overseas individuals or entities,” but .com.hk is limited to “commercial entities registered in Hong Kong.” Therefore, the shorter and direct registration of a .hk domain is the way to go.

Many registrars offer .hk domain registration. For English-speaking investors, you can try EuroDNS, 101 Domain, or Crazy Domains for between $30 and $80.

There is little secondary market activity for .hk domains. Some firms offer brokerage services, but I think they serve mostly buyers. Namepros.com is the only venue where I have found investors selling .hk domains. There are only 34 .hk sales recorded at NameBio.

Another issue in selling .hk domains is the difficulty in domain ownership transfer. It may involve tedious steps, requirements of other documents, and additional charges. For example, Hong Kong Domain Name Registration Company, a registrar which specializes in .hk domains, requires you to fill out an online form, submit additional documents, and pay a fee of HK$500 (about US$60).

The extension had 166,724 domains registered in January of 2014 and 211,847 domains currently, giving a mere 3% annual growth. In a city of 7 million, the .hk market size is small with limited potential.

So, before you decide to invest in .hk domains, consider its small market size, lack of an active secondary market, and the tedious steps involved in domain transfer.

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