Business Registration in Hong Kong: A Complete Guide
- Modified: 9 October 2023
- 9 min read
- Starting a Company
Gabi Bellairs-Lombard
Business Writer
Gabi creates content that inspires. She's spent her career writing compelling website copy, and now she specialises in product marketing copy. As the voice of our products and features, Gabi makes complex business finance and accounting topics easy to understand. Her top priority is ensuring that her words impact and inspire her readers.
If you're looking to take advantage of the incredible business opportunities in Hong Kong, you've come to the right place. Hong Kong is like a dream come true for investors – it's a proven powerhouse that can take you to new heights in Asia and globally. The administration here is extremely pro-business and goes the extra mile to ensure every business thrives. In fact, in the latest World Bank's Ease of Doing Business Index, Hong Kong proudly secured third place!
Now, let's talk about how you can make Hong Kong your ultimate launchpad. The first step is to incorporate your business right here. We've got you covered with this comprehensive guide.
Benefits of Business Registration in Hong Kong
Let's take a moment to understand the incredible benefits you'll be tapping into with company registration in Hong Kong. Here are just a few of them:
- Hong Kong, alongside Singapore, has gained a well-deserved reputation as one of the most business-friendly jurisdictions worldwide. When it comes to the registration process, you'll find it's a breeze – it's simple, fast, affordable, and convenient.
- Once you've incorporated your company, you'll have the freedom to manage it from anywhere you want. With the assistance of a service like ours, your business can operate smoothly daily, growing as you go. And if you bring in experts to help you run the show, your company could evolve into that dream multinational corporation even faster.
- As a savvy business owner, you know the value of a ready market for your products. Well, how about a market of 1.3 billion people? Hong Kong is the ultimate gateway to Mainland China, giving you access to a massive consumer base. And once you've completed your business registration, your enterprise will also enjoy special treatment from over 30 states that have signed bilateral trade agreements with Hong Kong.
- Despite being a Special Administrative Region of the People's Republic of China, Hong Kong enjoys significant autonomy, including an independent administration. This vibrant island has created an environment that sets you up for success. From a simplified tax system to business incubation programs, the administration leaves no stone unturned in supporting your enterprise.
Are you ready to learn how to incorporate a private limited liability company? Let's jump right into it!
Important Facts about Business Registration in Hong Kong
Let's dive into some useful facts about setting up a company. We’ve got you covered with all the essential details you need to know about incorporating a company in this Special Administrative Region (SAR) of China.
First things first, the Companies Ordinance of Hong Kong serves as your guide when it comes to company incorporation. It's like your trusty companion throughout the process. We’ve got the scoop on the requirements for business registration in Hong Kong, post-incorporation obligations and other important details.
Shareholders
Any private limited liability company needs at least one shareholder, and you can have a maximum of 50. The best part is there's no residency requirement imposed on shareholders. So, whether you're a local or an international entrepreneur, you can set up your business in Hong Kong.
Directors
When registering your company in Hong Kong, you only need a minimum of one director, but you can have as many as you want. The key is to have at least one individual director, and there are no restrictions or requirements regarding nationality or residency. It's all about flexibility and making things easier for you.
Company Secretary
Every limited liability company must also have a company secretary who resides in Hong Kong. This secretary is crucial in maintaining the company's statutory books and records. They're responsible for ensuring your company stays compliant with Hong Kong laws.
Tax
When you incorporate a company in Hong Kong, you have tax obligations to fulfil. In 2017, Hong Kong introduced a two-tiered profit tax regime to simplify taxation and drive economic development. Here's how it works: The profits tax rate for the first $2 million of assessable profits is a favourable 8.5%. Any assessable revenue above $2 million will be subject to a profits tax rate of 16.5%. It's important to note that Hong Kong follows a territorial basis of taxation. This means you'll only be taxed on the business conducted within Hong Kong's jurisdiction. So, you can enjoy the benefits of a business-friendly tax system.
Ongoing compliance
Once your company is registered, you must ensure proper accounting practices. Having your company's accounts audited annually by a Certified Public Accountant based in Hong Kong is a good idea. These audited accounts must then be submitted to the Inland Revenue Department. It's all part of maintaining transparency and keeping your business on the right track. Accounting services like ours can take this admin off your hands, so you don’t have to worry about it.
Expert company registration
We guide you through incorporation, advise you on a better setup and assist with licences if needed. We also offer our support beyond company registration as part of our subscription services.
What Type of Company To Choose for Your Business?
Choosing the right company type is crucial when setting up your business in Hong Kong. With options like Private Limited Company, Sole Proprietorship, General Partnership, Limited Partnership, Subsidiary, and Branch Office, it's essential to understand the characteristics and implications of each. Let's explore which type of company suits your business needs in Hong Kong.
1 Private Limited Company
In Hong Kong, a private limited company is the most commonly chosen business type. It provides a separate legal entity, offering liability protection to its owner(s). Whether owned by a single individual or multiple stakeholders, shares can be held within the company.
2 Sole proprietorship
Sole Proprietorship, on the other hand, offers a straightforward ownership structure where a single individual has full financial control. However, since the business is not considered a distinct legal entity, the sole proprietor assumes personal responsibility for all debts and liabilities.
3 General partnership
Partnerships involve joint ownership by two or more individuals. Typically, partners have equal managerial rights. Like Sole Proprietorships, partnerships lack separate legal status, resulting in partners sharing liabilities and debts.
4 Limited partnership
A Limited Partnership comprises both general and limited partners. General partners bear unlimited liability, while the liability of limited partners is limited to their capital contribution to the partnership.
5 Subsidiary
This is suited to those seeking to establish a subsidiary in Hong Kong. This type of company is a private limited company formed in Hong Kong, granting access to the same incentives and tax exemptions as local companies, along with the corresponding legal obligations.
6 Branch office
Branch Offices offer an option for companies based elsewhere to establish a presence in Hong Kong. This provides a formal business structure, with the foreign parent company assuming responsibility for the branch office's debts and liabilities.
Checklist To Register Your Business
If you're wondering how to start a business in Hong Kong, we've got you covered! Registering your business in this dynamic city is essential to establishing a successful venture. To help you navigate the process seamlessly, we've prepared a comprehensive checklist to ensure you cover all the essentials for business registration in Hong Kong.
Choose a business name
Before proceeding with the registration process, you must carefully select a suitable business name. Your chosen name plays a significant role in the necessary forms you'll fill out, so ensure it's unique and hasn't been previously used to avoid delays or the need for future changes.
Make a list of business executives
Maintaining a list of company executives, or those in your management team with significant control, is essential. This list, also known as the Companies Ordinance, should be diligently updated from registering your business to reflect any changes in executives. The Companies Ordinance is the official document outlining the legal limits for conducting business, providing guidance and compliance requirements.
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Appoint a Designated Representative
Appointing a Designated Representative (DR) is another important step. The DR, who must be a local resident, owner, director, employee, or licensed professional, is responsible for reporting to the Significant Controllers Register (SCR). This register contains information about the ownership and influencers of decisions within your company.
Choose a Director
For limited companies, the number of directors can vary, but at least one director must be appointed. Directors can be of any nationality, don’t need to be Hong Kong residents, and must be at least 18 years old. They are responsible for the company's overall management and should act in its best interests while ensuring lawful and efficient operations.
Decide on the shareholders
When it comes to shareholders, your business can have anywhere from 1 to 50 shareholders. Like directors, shareholders can be of any nationality, need not be Hong Kong residents, and must be at least 18 years old. Directors can also be shareholders, and shareholders hold ownership in the company and have decision-making authority.
Appoint a Company Secretary
Appointing a company secretary is essential to ensure compliance with statutory requirements and maintain proper records. A person or a company can fulfil this role, but if you have a sole director/shareholder, they cannot also act as the secretary. Contrary to the name, the company secretary is not merely a clerical role but plays a critical part in the legal maintenance of the registered company.
Share capital
Share capital refers to the equity value issued in shares by your registered business. While there is no minimum share capital requirement for Limited Partnerships or Limited Liability Companies, you must issue at least one share to a minimum of one shareholder. Shares can be issued in currencies other than Hong Kong dollars.
Provide a registered address
Having a local address is necessary for registering your company in Hong Kong. This address must be a physical location, not a PO Box, as it serves as the registered address to receive official mail from the government. While it doesn't have to be your main place of business, it's often the same location as the company secretary. Formation companies can provide a registered address if needed, but you can also use your residential address, keeping in mind that it will become publicly available once registered.
File company officers with Hong Kong companies Registry
Details about your company officers are considered public information and must be available through the Hong Kong Companies Registry. However, if you wish to keep this information confidential, you can hire a professional to appoint a corporate shareholder and an individual nominee director.
Hire an accountant
Maintaining accurate accounts is a vital responsibility. Annual audits conducted by Certified Public Accountants are required, and the audited accounts and your tax return must be filed with the Inland Revenue Department using your Business Registration Number. Hiring a company accountant can streamline bookkeeping, ensure compliance, and free up your time to focus on growing your business.
Get a Business Registration Certificate
Having an up-to-date Business Registration Certificate is crucial. This document outlines the fundamentals of your business and must be renewed annually or every three years, depending on the type of certificate. Remember to initiate renewals one month before the expiration date. Displaying the certificate in your office is required. You can download a Business Registration Certificate from the Business Registration Office website if you still need one. Within 30 days of starting operations or making any changes, complete form IRBR 37 and submit the necessary fees.
Gabi creates content that inspires. She's spent her career writing compelling website copy, and now she specialises in product marketing copy. As the voice of our products and features, Gabi makes complex business finance and accounting topics easy to understand. Her top priority is ensuring that her words impact and inspire her readers.
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FAQ
Can foreigners register a business in Hong Kong?
Absolutely! Foreigners are always welcome. With its open economy and favourable environment for foreign investment, Hong Kong encourages and supports international entrepreneurs. Non-residents can register and operate businesses in Hong Kong as long as they meet specific requirements.
Is it necessary to have a physical office in Hong Kong to register a business?
It's optional to have a physical office in Hong Kong for business registration. However, all registered companies must have a registered address within the city. This address serves as the designated location to send and receive official documents. It can be a commercial address, a residential address, or even a virtual office address, providing flexibility and convenience.
How long does a company registration in Hong Kong take?
Typically, the company incorporation process in Hong Kong is quite efficient, taking only five to seven working days. However, if you're located abroad, it may take a bit longer due to logistical considerations related to signing and sending the necessary documents. Rest assured, though, that our team will assist you every step of the way to ensure a smooth and timely process.
Do I need to obtain any licences or permits?
The need for licences and permits depends on the nature of your business. Certain types of businesses, such as restaurants or hotels, may require specific licences or permits to operate legally in Hong Kong. To ensure compliance and avoid any legal complications, it's advisable to consult with a professional service provider or seek guidance from the relevant government departments. They can assist you in understanding and acquiring the necessary licences and permits before commencing your operations.
Can I relocate to Hong Kong to run my registered company?
If you're a foreign entrepreneur looking to move to Hong Kong, you'll need to apply for an Investment Visa. Similar to an Employment Visa, the Investment Visa falls under the General Employability Policy. However, it's important to note that you can only apply for the Investment Visa after successfully completing the company formation process.
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