Top Tips for Opening a Business in Hong Kong as a Foreign Entrepreneur
- Published: 3 April 2025
- 14 min read
- Starting a Company, Bookkeeping
Heather Cameron
Author
Heather is here to inform and inspire our readers. Boasting eight years in the world of digital marketing, working in diverse industries like finance and travel, she has experience writing for various audiences. As Osome’s resident copywriter, Heather crafts compelling content, including expert guides, helpful accounting tips, and insights into the latest fintech trends that will help entrepreneurs, founders and small business owners in Hong Kong take their businesses to the next level.
Sherman Ieong
Reviewer
Sherman Ieong is our Accounting & Tax Manager based in Hong Kong. She is on hand to help our writers level-up our blog posts and guides by making sure the information is accurate, informative and inspiring. Osome’s all-in-one accounting services make managing tax effortless - and that’s exactly what Sherman ensures we do with our Hong Kong-focused blog content, applying her knowledge of day-to-day bookkeeping, monthly financial reporting, Profits Tax Returns and much more.
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.
Opening a business in Hong Kong as a foreign entrepreneur is simpler than you might think. With minimal restrictions and the ability to have 100% foreign ownership, Hong Kong is an ideal place for international ventures. Thanks to the company ordinance, it is the world's freest economy, allowing foreign-owned companies to operate any business in Hong Kong with lots of tax benefits. This article covers everything you need to know, from the business environment and company registration to tax obligations and support resources. Get ready to take the first step in your business journey in Hong Kong.
Key Takeaways
- Hong Kong offers a favourable business environment for foreign investors, characterised by minimal restrictions, 100% foreign ownership, and various government funding programs.
- Selecting the appropriate business structure, such as a private limited company, is essential for liability protection and tax efficiency in Hong Kong.
- Complying with local regulations, including obtaining necessary permits and maintaining annual filings, is crucial for smooth business operations in Hong Kong.
Hong Kong's Business Environment Explained
Hong Kong’s economy is a beacon of free trade and minimal restrictions on foreign investments, creating an alluring business-friendly environment that attracts entrepreneurs from around the globe. The city is a global leader for excellent infrastructure, global connectivity, and supportive economic conditions that enhance its appeal as a premier business hub.
Hong Kong’s strategic location in Central Asia away from mainland China serves as a gateway to vast Asian markets, reinforcing its status as a global business leader. According to the World Bank’s 2020 report, Hong Kong has numerous tax benefits and ranks third globally in ease of doing business, underscoring its competitive edge. The IMD’s World Competitiveness Center’s 2024 report ranks Hong Kong fifth in competitiveness, showcasing its robust and dynamic economy and positioning it as global leader for investments.
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Why choose Hong Kong?
Hong Kong stands out as an economically free cosmopolitan hub, making it an attractive location separate from mainland China for startups and international entrepreneurs. Its dynamic economy and strategic location make Hong Kong ideal for businesses looking to expand into Asia. The Hong Kong government offers over 70 funding programs specifically designed to support foreign investors, facilitating easier business establishment.
Opening a business in Hong Kong is relatively easy and cost-effective. Moreover, the city allows 100% foreign ownership of companies, providing complete investment freedom and making it highly appealing for foreign business owners. The Closer Economic Partnership Arrangement (CEPA) further enhances this appeal by offering companies in Hong Kong access to the lucrative Chinese market.
The Hong Kong government actively works to make the business setup process seamless. Various initiatives and resources are in place to assist foreigners and overseas parent companies, from providing funding to simplifying administrative procedures. The ease of visiting Hong Kong and its friendly business environment make it a prime choice for foreigners looking to establish a successful business entity in Asia.
Key government bodies
The Companies Registry in Hong Kong is the primary body overseeing all aspects of Hong Kong parent company registration and compliance. It ensures that all companies meet the necessary legal requirements and maintain proper documentation. It oversees the incorporation process, from initial registration to ongoing compliance.
Another key government body is the Inland Revenue Department, responsible for tax administration and ensuring compliance with tax laws. The inland revenue department oversees the collection of taxes and the submission of annual tax returns, ensuring that businesses adhere to local tax regulations.
Together, these bodies form the backbone of Hong Kong’s regulatory framework, supporting a transparent and efficient business environmen
How To Choose the Right Business Structure?
Selecting the appropriate business structure is crucial when establishing a business in Hong Kong. The main entities available include sole proprietorships, partnerships, and limited liability companies, each catering to different business goals and offering distinct advantages. Each limited company in Hong Kong is a separate legal entity from the owner. As a foreigner, you can own 100% of your business in Hong Kong and hire employees as the sole director.
The most common choice for foreign entrepreneurs is the private limited company, which is favoured for its legal protections and tax incentives. Grasping the nuances of each structure aids in making decisions that align with your business goals.
Private limited company
Foreign investors often choose a private limited company in Hong Kong for its key advantages. One of the primary benefits is limited liability, which protects the personal assets of the business owners from the company’s debts. It also provides tax efficiencies, enabling companies to benefit from Hong Kong’s tax incentives. The combination of these factors makes limited companies or companies limited by shares particularly attractive for those looking to establish a secure and financially efficient business entity.
Incorporation as a private company offers separate legal entity status, enhancing business credibility and professional image. This status allows the company to enter into contracts, acquire assets, and incur liabilities independently of its owners.
Whether transitioning from a sole proprietorship or seeking an international foothold, a Hong Kong company provides solid legal and financial benefits.
Branch office vs. representative office
When expanding into Hong Kong, foreign companies often choose between setting up a branch office or a representative office. A branch office acts as an extension of the foreign parent company, sharing its liabilities and capable of conducting full business operations in Hong Kong. This setup is ideal for companies looking to have a significant operational presence in the city.
On the other hand, a representative office is limited to non-profit-making activities, such as market research and promotional activities. The representative office cannot engage in direct business transactions or revenue-generating operations, making it suitable for parent companies that wish to explore the Hong Kong market without full-scale business commitments. Additionally, representative offices can serve as a valuable resource for companies looking to establish a presence in the region.
Recognising these differences is key to choosing the right structure for your strategic goals.
Osome simplifies the process of choosing the right business structure, helping you confidently select the best option for your goals. Whether you’re setting up a limited company, branch office, or representative office, we provide expert guidance to ensure a smooth incorporation process in Hong Kong. Contact us to get started today.
How To Register a Company Name?
Choosing a company name is a vital step in incorporation. The name must be unique and not already in use by another company. It cannot be identical to any name listed in the Companies Registry’s Index of Company Names. Besides the name, you should also have a registered office address.
Meeting these criteria is crucial to avoid name rejection during registration.
Checking name availability
Selecting a unique name requires more than creativity; it necessitates thorough research and regulatory compliance. A proposed company name must not be trademarked, offensive, or in simplified Chinese.
The Companies Registry website offers a searchable database to check name availability. Local company registration specialists or company secretaries can also assist in ensuring your chosen name meets all legal requirements.
Trademark considerations
Trademarking your company name protects your brand and enhances credibility. You can verify if your company name is eligible for trademark registration. To do this, utilise the Intellectual Property Department’s Online Search System.
Registering your new company name as a trademark not only safeguards your brand but also prevents others from using a similar name or logo concerning your goods or services.
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Learn all you need to know about choosing the right company name in Hong Kong, from restrictions to relevance. Chat to our team today.
Company Incorporation Process
The incorporation process for any company in Hong Kong is straightforward, from choosing a unique name to receiving a Certificate of Incorporation and Business Registration Certificate. This process involves submitting the necessary incorporation documents to the Companies Registry, either online or in person. Hong Kong company incorporation is a key step in establishing a business.
Consultancy services can simplify this process, ensuring application acceptance and assisting with other requirements such as opening bank accounts.
Step | Details |
|---|---|
| 🏢 Choose a Company Name | Select a unique company name. Ensure it complies with Hong Kong’s naming regulations. |
| 📄 Prepare Incorporation Documents | Key documents for incorporating a company in Hong Kong include: Articles of Association (parent company regulations), Incorporation form (business details), Notice to the Business Registration Office. |
| 📑 Ensure Compliance | Documents must be accurately completed to avoid delays. - Foreign investors may benefit from incorporation specialists for legal compliance. |
| 📤 Submit to Companies Registry | Online submission via e-Registry (processed in under an hour). In-person or mail submission (processing time: up to 4 days). |
| 💳 Pay Incorporation Fees | Hong Kong government's fees vary based on the submission method. Ensure timely payment to avoid delays. |
| 📜 Receive Certificates | Upon approval, the Certificate of Incorporation and Business Registration Certificate are issued, completing the registration process. |
Preparing incorporation documents
Preparing the necessary documents is a crucial registration step. Standard documents include the Articles of Association, the incorporation form, and a Notice to the Business Registration Office. These documents must be filled out accurately to avoid delays or rejections. The Articles of Association outline the company’s internal regulations, while the incorporation form provides basic details about the business, such as its name, local business address, and nature of operations.
Foreign owners often benefit from using incorporation specialists. These professionals ensure that your documents comply with all local laws and regulations. They can also provide valuable resources and support to streamline the registration process, making it easier for you to focus on establishing and growing your business.
Submitting to Companies Registry
Incorporation documents can be submitted to the Companies Registry online or in person via the e-Registry portal. Online registration is particularly efficient, taking less than an hour to complete, while mailed submissions can take up to four days for processing. There is a fee associated with submitting these documents, which varies depending on the method of submission.
Local professionals can expedite the process, ensuring all paperwork is correctly done and submitted. Whether you choose online or in-person submission, accurate and timely documentation is key to successfully incorporate a company in Hong Kong.
Business Registration Certificate
The Business Registration Certificate (BRC) is required to operate a business in Hong Kong legally. This certificate confirms that your company is officially registered and complies with local regulations. It will be processed at the same time as the Certificate of Incorporation.
Obtaining a BRC involves submitting a business registration application with the necessary documents, typically taking around four days to process. The registration fee for the BRC is HKD 1,720.
Application process
Ensure your Business Registration Certificate application form is accurately filled out. Inaccurate or incomplete forms can lead to delays or rejections by the business registration office, impacting your Hong Kong company registration process.
Consulting with professional service providers can help ensure that your application is correctly completed and submitted.
Fees and validity
The Business Registration Certificate can be valid for either one or three years, depending on your preference. Should your application be unsuccessful, around 80% of the application fee will be refunded.
Once obtained, the BRC must be prominently displayed at your place of business to demonstrate compliance with local regulations.
How To Appoint Key Personnel?
Each company in Hong Kong must appoint at least one director, one shareholder, and a company secretary. Maintaining accurate registers of shareholders and directors is required for corporate law compliance.
These key roles are essential for the smooth operation and legal compliance of your business.
Company secretary requirements
The company secretary must be a Hong Kong resident or a licensed secretarial service. They ensure regulatory compliance and operational transparency.
While at least one director can also serve as the company secretary, this is not allowed if the director already serves as a director of another company. The sole director of a private company cannot be appointed also as the company secretary.
Stay compliant effortlessly with Osome’s company secretary services. We handle filings, maintain statutory records, and ensure your business meets all regulatory requirements in Hong Kong.
Director and shareholder roles
Directors must be at least 18 years old, free from bankruptcy, and act in the best interest of the company. Shareholders can be individuals or corporate entities with no residency requirement
How To Set Up a Corporate Bank Account?
Setting up a corporate bank account in Hong Kong requires more paperwork than personal accounts due to strict due diligence. The registration process can take 2 to 3 weeks but may extend to a month or longer in complex cases.
Foreign owners frequently choose multi-currency bank accounts for financial flexibility.
Traditional banks vs. digital banks
Hong Kong provides various banking facilities, including traditional and digital banks. Traditional banks often require a physical visit for account opening and management, providing in-person assistance. In contrast, digital banks allow the entire application process to be handled online, offering convenience and efficiency.
People running any business in Hong Kong should evaluate each option’s pros and cons based on their needs and preferences.
Documentation needed
Opening a corporate business bank account necessitates documents such as a certified copy of the company’s articles of association and the business registration certificate. Digital banks provide an alternative, enabling the entire process to be conducted online without a physical visit.
Company incorporation specialists can assist in navigating these requirements, simplifying the banking setup process.
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How To Obtain Necessary Permits and Licenses?
Securing necessary permits and licenses is vital for legal compliance and smooth operations in Hong Kong. Industry-specific permits and licenses vary, so understanding your business’s requirements is crucial.
Registering trademarks prevents others from using similar names or logos for their goods or services.
Common permits and licenses
Common permits and licenses for companies in Hong Kong include the General Restaurant Licence and provisional general restaurant licence for food service businesses and liquor licenses for establishments selling alcoholic beverages. All of these are issued by the Food and Environmental Hygiene Department. Import and export businesses must obtain specific licenses tailored to their operations to comply with local and international trade regulations.
Application process
The application process for permits and licenses varies by business type. Information on necessary permits and licenses can be found on the Trade and Industry Department website. Specific forms and documents must be submitted to various government departments depending on the business type, and engaging a service provider can streamline this process.
Tax Obligations and Financial Reporting
Hong Kong’s territorial tax regime means only income sourced within Hong Kong is taxable. Profits exceeding HKD 2 million are taxed at 16.5%, while the first $2 million are taxed at 8.25%.
Exemptions for VAT, GST, and capital gains make Hong Kong a favourable tax environment. Companies must pay taxes and submit annual financial reports to stay compliant with local regulations.
Corporate tax rates
Hong Kong’s corporate tax rate is set at a flat 16.5% on assessable profits, but a two-tiered system offers a reduced rate of 8.25% for the first $2 million of profits. This low tax rate makes Hong Kong an attractive destination for businesses. For companies not eligible for the two-tiered rates, a flat tax rate of 16.5% applies to all assessable profits.
Subsidiary companies and branch offices follow the same tax protocols, ensuring consistency across structures. However, a group of companies can designate only one entity to benefit from the two-tier tax rate of 8.25%. A branch office's liabilities are directly linked to its parent company.
Financial reporting standards
Businesses in Hong Kong must prepare annual financial statements per the Hong Kong Financial Reporting Standards (HKFRS). These statements are submitted to the Inland Revenue Department as part of the annual tax return process.
Adhering to these standards ensures transparency and regulatory compliance, which are crucial for your business’s integrity.
How To Maintain Regulatory Compliance?
Regulatory compliance in Hong Kong is essential to avoid legal penalties and ensure smooth operations. The company secretary ensures statutory records are maintained and in compliance with local regulations.
Companies must submit tax returns annually and file annual returns within 42 days of their incorporation anniversary to remain compliant.
Annual filings
All Hong Kong companies must file annual returns to stay compliant with local laws. Submit these filings within 42 days of the company’s incorporation anniversary, either electronically or by physical delivery. Late filings can result in fines, so it’s crucial to stay on top of these requirements.
Legal advisors can assist in navigating business regulations in Hong Kong.
Role of the company secretary
The company secretary ensures compliance with statutory requirements and maintains records. They manage the timely submission of compliance documents, including annual returns, and assist in maintaining corporate governance.
Local professionals can enhance compliance with Hong Kong’s regulations, ensuring smooth and legal operations.
Effortless company secretary services in Hong Kong
Simplify compliance with our expert company secretary services tailored for HK businesses. Contact us for reliable assistance.
Resources and Support for Foreign Entrepreneurs
Hong Kong provides extensive resources and support for any foreign-run business in Hong Kong. InvestHK provides free services to promote investment and assist foreign companies in setting up operations in the region. The Hong Kong government offers funding schemes and resources targeted at supporting SMEs.
These resources can ease the business setup process and support ongoing operations.
Government resources
The Hong Kong government provides special programs, including loan funding and market funds, to attract foreign investment and support SMEs. The Hong Kong Trade Development Council assists foreign businesses entering Asian markets, offering market research and networking opportunities.
These resources can help any owner who is not a Hong Kong resident navigate the Hong Kong market and take advantage of its business-friendly environment.
Professional services
Professional services can streamline the business setup process in Hong Kong. Experts in legal, accounting, and consulting ensure compliance with local regulations and efficient transactions.
The SME ReachOut service offers face-to-face assistance to SMEs in identifying funding schemes and navigating business establishment complexities for companies in Hong Kong.
Open a company in Hong Kong with ease—Osome simplifies the process by handling registration, compliance, and administrative tasks so you can focus on growing your business. Take advantage of Hong Kong’s business-friendly environment with expert support. Contact us to get started today.
Summary
Embarking on the journey of opening a business in Hong Kong as a foreigner can be both rewarding and challenging. This guide has provided a comprehensive overview of the necessary steps, from understanding the business environment and choosing the right structure to obtaining permits and maintaining compliance. Leveraging the resources and support available, foreign companies can navigate the complexities of Hong Kong’s company registration and establish a successful and compliant business entity.
Heather is here to inform and inspire our readers. Boasting eight years in the world of digital marketing, working in diverse industries like finance and travel, she has experience writing for various audiences. As Osome’s resident copywriter, Heather crafts compelling content, including expert guides, helpful accounting tips, and insights into the latest fintech trends that will help entrepreneurs, founders and small business owners in Hong Kong take their businesses to the next level.
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Advice on starting and growing your company, as told by Osome's business community
FAQ
What are the main business structures available in Hong Kong for foreign entrepreneurs?
The three main business structures available for any business in Hong Kong run by foreigners are sole proprietorships, partnerships, and limited liability companies, with the limited company being the preferred option due to its legal protections and tax advantages and being a separate legal entity from the parent company.
How long does it take to incorporate a company in Hong Kong?
Incorporating a company in Hong Kong can be completed in less than an hour through the online e-Registry portal, while mailed submissions may take up to four days to process.
What are the requirements for appointing a company secretary in Hong Kong?
To appoint a company secretary in Hong Kong, the individual must either be a resident of Hong Kong or a licensed company secretarial service. Their primary responsibilities include ensuring regulatory compliance and maintaining statutory records.
What is the corporate tax rate in Hong Kong?
The corporate tax rate in Hong Kong is a flat 16.5% on assessable profits, with a reduced rate of 8.25% applicable to the first $2 million of profits.
What permits and licenses are commonly required for businesses in Hong Kong?
Businesses in Hong Kong commonly require permits and licenses such as a General Restaurant License for food service, liquor licenses for selling alcoholic beverages, import/export licenses, and money service operator licenses.
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