Setting Up a Company in Hong Kong From the US: 2024 Straightforward Guide

Step 1. Choose your company name

Your company’s name is its first impression, a unique identity that must resonate with your brand and comply with Hong Kong’s regulations.

Opt for a distinctive name that is not currently in use or undergoing registration in Hong Kong. It’s essential to decide whether to register your company name in English or traditional Chinese characters. The English business name for a limited company must end with “Limited” rather than “Ltd.”

Steer clear of names that could infringe on existing trademarks, suggest government affiliation, or are deemed against the public interest. Remember, certain words and expressions may not be adequate to distinguish your proposed name from those already registered.

Step 2. Verify name availability

Once you’ve settled on a potential name, you must ensure it's available. The Hong Kong Companies Registry e-Services Portal is your go-to resource for this verification. A quick online check can validate if your chosen name has been claimed, allowing you to proceed with confidence.

This step is vital to avoid any legal complications or the need for a last-minute name change. Note that some names require to be approved before they can be registered. You can find more information regarding business names in Hong Kong's Companies Ordinance.

Step 4. Appoint a company secretary

A key legal requirement in Hong Kong is the appointment of a designated representative as a company secretary, a role that holds significant administrative responsibilities.

Your company secretary must have a local address. Therefore, you can only appoint a Hong Kong resident to be your company secretary. Alternatively, you can appoint a corporate body with a Hong Kong-registered office to fulfil this role.

Regardless of your choice, the company secretary must be appointed with caution as they are instrumental in maintaining the smooth operation of the company's articles and corporate governance.

Step 5. Select your registered office address

Your company’s registered office address in Hong Kong is more than just a location. It’s the official point of contact for receiving government communications and notices. This must be a physical address within Hong Kong instead of merely a P.O. Box.

If you use a residential address, ensure it meets government regulations and can properly handle official correspondence. You also need to provide the residential address proof to complete the registration. A virtual office service can provide a professional address if a physical office is not an option.

If your registered business address has changed, notify the Business Registration Office by filling out the NR1 form from the Companies Registry.

Step 6. Prepare and fill in your incorporation documents

To bring your Hong Kong company to life, you must prepare and submit key incorporation documents, including the Articles of Association and the incorporation form. If your documents are not in English, they must be accompanied by officially certified translations.

You must also include a Notice to Business Registration Office with your company incorporation filings and complete your registration within one month of incorporation. Be aware that the details of your company officers will be made publicly accessible through the Companies Registry office.

Step 7. Get a Business Registration and Incorporation Certificate

The Business Registration Certificate (BRC) is your ticket to operate legally in Hong Kong. Failure to register can result in significant fines or even imprisonment.

No matter the structure, all businesses must obtain a Business Registration Certificate, available in one-year or three-year terms. Along with your certificate, you will receive a Business Registration Number (BRN), which serves as your tax identifier.

The Certificate of Incorporation, on the other hand, is vital for opening bank accounts and engaging in contracts. While the Business Registration Certificate requires renewal, the Certificate of Incorporation does not expire. You can apply for these certificates online through the e-Registry service and receive them in about an hour.

Step 8. Open a business bank account

Navigating Hong Kong’s banking landscape is the next critical step. Fortunately, there’s a plethora of options to suit your business needs, from traditional banks and virtual banks to non-bank financial service providers. The process can be complex and time-consuming, especially for foreign entities, so it’s essential to:

• Prepare for in-person interviews
• Understand the various account features
• Understand the eligibility criteria
• Understand the associated fees.

This will ensure your company’s financial transactions are handled smoothly and securely.

Step 9. Stay compliant with your taxes and financial reporting

Hong Kong’s tax system is known for its simplicity and low rates. Taxes owed by your companies are reported to the inland revenue department accordingly.

Here are some key points to keep in mind:

• The corporate tax rate is 16.5% for profits generated within Hong Kong.
• Income from capital gains and offshore profits is not taxable.
• It’s important to align your accounting practices with the local tax year.

The Inland Revenue Department collects your corporate tax, including profits tax, property tax, stamp duty, and other related taxes. Royalties and consignment sales can also create tax liabilities.

You should also consider the impact of Hong Kong’s comprehensive double tax agreements on your business. Staying compliant with these regulations will ensure your business thrives without tax-related hiccups.

When unsure, consult a professional accounting firm specializing in Hong Kong business taxes, such as Osome. Having an accounting professional by your side will safeguard your tax compliance. Conducting an audit during your annual general meeting also helps keep you compliant.