Hong Kong Company Incorporation – A Step-by-Step Guide
- Modified: 25 December 2024
- 10 min read
- Starting a Company
Jon Mills
Author
Jon's background is in copy and content writing for brands. He relishes writing educational and entertaining content. He's told unique stories in creative ways, and has added value to products in the luxury sector. Now, his stories bring the advice and journeys of Osome's accounting experts and small business owners to life, hoping to inspire entrepreneurs to be ambitious, set their sights high, and take pride in their growing businesses.
Iris Kwong
Reviewer
Iris Kwong is our Corporate Secretary Manager based in the Hong Kong office. With more than 10 years of experience navigating Hong Kong's Companies Ordinance and regulatory requirements, she is our go-to expert on everything from company formation and annual returns to board meetings and shareholder resolutions. She knows the secrets to ensuring smooth business operations and carefully reviews our Hong Kong-focused content, ensuring it's accurate, up-to-date, and packed with useful tips.
Incorporating a company in Hong Kong involves a legal procedure for registering a new limited liability company or corporate entity. These entities are recognised as separate legal entities and often include the "Limited" term in their names. Our comprehensive guide to company incorporation provides step-by-step instructions on how to set up a company, enabling you to understand and successfully navigate the process of starting a company in Hong Kong.
How To Incorporate a Company – Step-By-Step Instruction
You will need to follow some clear steps to meet the requirements of incorporating a company in Hong Kong.
When following the incorporation process, several roles need to be appointed, including a director, a secretary and a designated representative. You must also select a unique company name, register a physical address and have at least one shareholder.
By the way, our company registration services can assist you through each step of this process efficiently and effectively.
1. Choose a company name
Before you proceed with the incorporation process, you must decide on your business name. This is important in the early stages of setting up a business in Hong Kong as it is a crucial component of the incorporation form you must complete. Find a unique company name that hasn’t already been used, or you will be required to change it later, which could slow down your incorporation application.
Choose a company name that accurately represents your business, brand, and Hong Kong target market, and avoid anything that could be interpreted as offensive. Remember that this is likely the first thing customers will learn about your business, so you’ll want to give a good first impression.
2. Appoint a Designated Representative (DR)
For successful Hong Kong company registration, it is necessary to appoint a Designated Representative (DR) who will be accountable for fulfilling reporting obligations to the Significant Controllers Register (SCR). The DR must fulfil the requirement of being a local resident and can be an owner, director, or employee of the company. Alternatively, a licensed professional, such as a legal or accountancy professional, can also serve as the DR.
In Hong Kong, every company maintains records on ownership and individuals who influence decision-making processes. The Designated Representative plays a vital role in managing SCR inspections and ensuring the accurate and current maintenance of records for Significant Controllers.
3. Choose a company director
A Private Limited Company can have any number of directors, but you must appoint at least one when you set up a company. There are some rules about who can be a director in Hong Kong companies:
- They do not need to be a Hong Kong resident and can be of any nationality
- They must be at least 18 years old
- They must not be bankrupt or have any convictions
- They do not need to be shareholders
Directors are responsible for the company's overall management, both individually and collectively. They should act in their best interests and ensure it runs both lawfully and efficiently.
4. Decide on the shareholders of the company
Your business can have between 1 and 50 shareholders. There are some rules about who they can be during the incorporation process:
- They do not need to be a Hong Kong resident and can be of any nationality
- They must be at least 18 years old
- Directors can also be owners
- They can be an individual or a company
Put simply, the shareholders own the company and appoint directors to run it. Shareholders can generally make decisions on issues directors cannot, and also keep an eye on the finances, which includes approving how money is spent. These are important things to think about before you incorporate a Hong Kong company.
5. Appoint a company secretary
The next step in the Hong Kong company registration process is to appoint a company secretary who will be responsible for your records and ensure you comply with statutory requirements. This can be an individual person or a company. Individuals must be residents of the country, and companies must be registered locally as a place of business. If you have a sole director/shareholder, they cannot also fulfil the role of secretary.
Contrary to the company name, this is not a clerical role but acts as a form of gatekeeper, playing an advanced role in the company’s legal maintenance. You cannot complete incorporation without a company secretary and must always have one appointed for as long as you are trading.
6. Share capital
Share capital is the value of equity your business has issued in shares. There is no minimum share capital requirement for Private Limited Companies, but you will need at least one share issued to a minimum of one shareholder. Shares don’t have to be issued in Hong Kong dollars as long as they are in another major currency.
When incorporating a company in Hong Kong, the type of shared capital is Issued capital, which refers to the total value of currently allotted shares. This is calculated based on the number of allotted shares and the value of each share.
7. Provide a registered address
It’s important to have a local address to register and start your company. This must be a physical location in Hong Kong, not just a PO Box. A registered address is required in law to receive official mail from the government.
If you don't have a physical office in Hong Kong yet, one option is to use company registration services that can provide you with a registered address. You can also use your residential address as your business address, but remember that this information will be publicly available once you register.
8. File company officers details with the Hong Kong Companies Registry
Details about your company officers are public information and must be available under the Hong Kong Companies Registry.
It is possible to keep this information confidential. If you wish to do this when you set up your company, you must enlist a professional to appoint a corporate shareholder and nominee individual director.
9. Hire an accountant
When incorporating a company, it is essential to prioritise the maintenance and filing of accurate accounts. These accounts should undergo annual audits by an experienced accountant and be submitted to the Inland Revenue Department, along with your tax return, utilising your Business Registration Number.
Choosing to hire a company accountant is a wise decision when incorporating a business, as it enhances the efficiency of your bookkeeping processes and ensures that your accounts meet the required auditing standards. Additionally, it grants you the freedom to dedicate your time and efforts to managing and growing your company, fostering its success. Osome's expert accounting services can provide the support you need, ensuring compliance and accuracy while you focus on driving your business forward.
10. Get a Business Registration Certificate
When incorporating a Hong Kong company, it is crucial to ensure that you have an updated Business Registration Certificate from the Inland Revenue Department (IRD). This document serves as a fundamental outline of your business and must be renewed annually or every three years, depending on the type of certificate obtained. Renewals should be completed one month before the expiry date, and the certificate must be prominently displayed in your office.
Once your company is incorporated, the Business Registration Certificate will be automatically issued along with the Incorporation Certificate, eliminating the need to complete any additional forms. This streamlined process ensures that you can focus on setting up your business in Hong Kong without worrying about extra paperwork. Adhering to these guidelines is essential to facilitate setting up a Hong Kong company and ensure compliance with the necessary documentation.
The Business Registration Certificate will only be issued to a non-Hong Kong company that is not registered under the Business Registration Ordinance.
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What Documents to Prepare for Opening a Company?
Incorporating a company in Hong Kong requires submitting various documents to meet the requirements. This process can be complex and time-consuming, so seeking help from a professional business registration services firm is valuable. They have expertise in company incorporation, understand the necessary documents, and can guide you in presenting them correctly. Our overview provides a clear understanding of the essential documents and requirements, empowering you to navigate the process and meet obligations confidently.
1 Articles of Association
When setting up a company, one crucial document to have is the company's Articles of Association. This document outlines your objectives and goals. It explains how directors are appointed, finances are managed, and projects are approached. It provides detailed information about how tasks are carried out and how the company achieves its goals. Think of it as the blueprint or rulebook for your company, guiding its operations and shaping its overall structure. A clear constitution is essential for successfully incorporating and running a company.
2 Completed Incorporation Form
Complete the incorporation form with the following information:
- Company name — what will your new business be called? - Remember that this will be one of the first things people see or hear about your company.
- Registered address — this must be a physical location in Hong Kong and doesn’t necessarily need to be where your day-to-day business is carried out. It could even be your residential address, but bear in mind that this information will be publicly available.
- Number of shares taken up — how many shareholders do you have and how many shares have you distributed between them?
- Details of share capital — this should include details of the total value of your share capital, as well as whether you have issued more than one class of shares.
- Liability of members — in a company limited by shares (Limited liability company), usually only the shareholders’ liability is limited. This means they are not liable for any debts or obligations, aside from their own financial contribution or the amount unpaid on their shares.
- Information about owners, directors and a company secretary— these are the three members you must appoint in order to incorporate. Remember that an owner can also be a director, but the company secretary cannot be the sole director or shareholder.
- A brief overview of business activities — this is to communicate your commercial purpose and show the value your business will deliver to society. Depending on where your company is based, you may be able to give a brief overview, whereas some jurisdictions may require a more detailed description.
When choosing your company name, ensure it's unique and reflects your brand identity. A distinctive name not only helps you stand out but can also improve your online visibility and searchability. Make sure to check for trademark conflicts to avoid future legal issues. Additionally, consider securing a matching domain name for your website to create a consistent and professional brand presence from the start.
3 Documents required by shareholders and directors
When you're incorporating a company in Hong Kong, both corporate shareholders and directors have certain documents to provide in the incorporation process. These include the Articles of Association and the Incorporation Form, outlining the company's details, rules and regulations. As a resident owner or director, you'll need to provide proof of your residence in Hong Kong and a copy of your Hong Kong identity card. Non-resident owners or directors will need a copy of their international passports and evidence of their overseas residences. These documents are important for verifying the identity and residency of the shareholders and directors involved in the company.
Requirements for Foreigners To Set Up a Company
Hong Kong is the perfect place to set up a new company. As a foreigner:
- There are no requirements for you to be a local resident
- You are welcome to set up as a sole director or owner
- You don’t necessarily need to reallocate – it's possible to run a business from overseas
- You can set it up without being physically present
- However, you may need to be present to open a bank account
As you can see, there are fewer restrictions for foreigners looking to start a business in Hong Kong than other places in the region, which is one of the many things that makes it so attractive to potential business owners. Others include its strategic location in Asia, its well-regulated legal system, and its attractive taxation system.
It also has one of the best infrastructures in the world with efficient transportation and boasts a robust and stable financial system. With few to no language barriers for those speaking English, business communication is easier than you might expect in Hong Kong, especially as a foreigner.
And the company incorporation process is relatively straightforward.
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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.
Tips For Starting a Business in Hong Kong
If you're considering starting a business in Hong Kong, it's important to understand the essential steps involved in incorporating a company. From navigating legal requirements to embracing the vibrant business environment, there are crucial factors to consider. We’ll provide valuable tips and insights to help you successfully set up a company in Hong Kong. Whether you're a local entrepreneur or an international investor, these tips will guide you through the process and set you on the path to success in this dynamic business landscape. Now that we’ve convinced you that incorporating in Hong Kong is a good idea, here are some top tips for getting started.
Develop a business plan
When you're ready to open a Hong Kong company, ensure your business idea is practical. Test your idea and speak to potential customers to determine its viability. Afterwards, develop a business plan to transform your idea into a profitable venture. Consider the problem your idea solves, identify your target customers and competitors, and outline your long-term vision and financial projections. A well-thought-out business plan will guide you in transforming your idea into a successful and lucrative reality.
Invest in your brand
When it comes to opening and running a business, brand is everything. Similar to choosing a company name, your brand is crucial in communicating the right message about your business to your customers and helping you to stand out.
Take time to build out your brand look as well as really understanding the value you provide to customers. It’s important to develop a clear, consistent brand that customers recognise and can resonate with, so consider building this in your business plan and incorporation process.
A Private Limited Company gives your business credibility with investors and financial institutions, which can be crucial for securing funding, and allows you to raise capital through shares while safeguarding your shareholders’ personal assets. Each business case is unique, so I always suggest choosing a business structure based on your growth potential, funding needs and risk tolerance.
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Consistency is key when building your brand. Ensure your logo, message, and visuals are aligned across all platforms. This builds trust, recognition, and helps connect with your audience. Regular customer feedback can also refine your brand’s appeal.
Choose the right business structure
When you decide to open a company in Hong Kong, it's important to explore different business structure options. One popular choice is a Limited Partnership. To determine the right structure for your business, refer to our guide on company structures in Hong Kong. It provides valuable information to help you understand and choose the most suitable option for your company.
Familiarise yourself with official processes
Whilst Hong Kong is one of the easier places to open a company, there are still official documents to complete and processes to follow. We’ve covered some of it above, but if you’re looking for more support, don't hesitate to reach out!
Looking for more information? You can read our comprehensive guide to starting a business in Hong Kong where you’ll find lots of helpful advice on how to start a successful business in the region.
Jon's background is in copy and content writing for brands. He relishes writing educational and entertaining content. He's told unique stories in creative ways, and has added value to products in the luxury sector. Now, his stories bring the advice and journeys of Osome's accounting experts and small business owners to life, hoping to inspire entrepreneurs to be ambitious, set their sights high, and take pride in their growing businesses.
