Setting Up a Company in Hong Kong From the US: 2024 Straightforward Guide
- Published: 14 April 2024
- 11 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.
Thinking of setting up a company in Hong Kong? You’re in the right place. Hong Kong's convenient market access and stellar international reputation make it a top choice for entrepreneurs looking to start a business. This guide will walk you through the company registration process in Hong Kong, ensuring you can swiftly turn your ambition into reality no matter where you’re starting from, including the US.
Key Takeaways
- Hong Kong’s strategic location, free trade policies, and role as a gateway to Mainland China make it ideal for US entrepreneurs to establish a company.
- US-based individuals can register a company in Hong Kong digitally as long as they have a local Hong Kong company secretary. Services facilitating the process can sometimes complete the registration within a single business day while guiding you through every aspect, including legal and banking arrangements.
- Registering a company in Hong Kong from the US has several critical steps, including choosing a company name, verifying name availability, choosing a business structure, and appointing a company secretary
- You must also prepare incorporation documents, acquire a Business Registration and Incorporation Certificate and ensure compliance with tax and financial reporting regulations. While sole proprietorship is an option, most choose to form a private limited liability company for its agility and security.
Benefits of Starting a Business in Hong Kong for Foreigners
Nestled at the heart of Asia, Hong Kong offers a dynamic business environment where global commerce converges. This city’s free trade policies and commitment to the rule of law create a trusted infrastructure for financial transactions, making it an irresistible global financial hub.
Hong Kong's strategic geographic position is more than mere convenience. It also serves as a bridge to key Asian markets such as Mainland China and the manufacturing-rich Pearl River Delta. It is also an active participant in major economic developments like the Belt and Road Initiative and the Greater Bay Area, amplifying its role as a regional powerhouse. The Hong Kong dollar further strengthens this position as a major currency that is generally stable and widely accepted.
Ambitious entrepreneurs can also find an impressive pool of skilled professionals offering specialised services instrumental in navigating the complexities of Asian markets. All these elements signify an advantageous starting point for foreign businesses to tap into exponential growth opportunities.
Is It Possible To Register a Hong Kong Company From the USA?
The digital age has erased borders, making it entirely feasible for US entrepreneurs to register a Hong Kong company from thousands of miles away. With the advent of specialised online services like Osome, registration can be completed as quickly as a single business day.
These service providers streamline this process, offering packages catering to US-based individuals looking to start a business in Hong Kong. These services also extend their support for subsequent steps like banking arrangements.
Imagine registering your company with a few clicks and receiving guidance on every administrative aspect, from choosing a registered branch office to staying on top of compliance notifications. With companies like Osome, acquiring your business registration certificate has never been simpler.
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How To Set Up a Company in Hong Kong from the US
Starting a business in Hong Kong from the US is a strategic decision that can introduce you to a world of new opportunities. The process is straightforward but requires careful planning and execution because each step is critical to laying a solid foundation for your business.
The core steps leading up to a successful registration include:
- Choosing company names and verifying their availabilities
- Choosing the right structure
- Appointing a company secretary
- Choosing your company's registered address
- Filing for incorporation
- Acquiring the Business Registration and Incorporation Certificate
- Company bank account
- Staying compliant with an annual general meeting
While some steps may be more complicated, you can navigate these waters easily and confidently with the right guidance. It's time to establish a robust presence in one of the world’s most vibrant economies.
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 3. Decide on a company structure
The structure of your company is the backbone of your business. The structure determines your company's potential for growth, funding avenues, and the level of personal risk you must accept. Further, aligning your business goals with the appropriate structure is a strategic move that will pay dividends in the long run.
Hong Kong offers a variety of private companies limited by of structures, from sole proprietorships to limited liability partnerships. However, the private limited liability company, also known as a private limited company, stands out as the preferred choice for its numerous advantages, including limited liability for shareholders, tax benefits, and organisational flexibility.
When there is more than one partner in a private limited company, you must also identify the significant controllers. While the Company Registry does not require the significant controllers register to be delivered, it must remain at the company's local office or inside Hong Kong to always be accessible.
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.
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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.
Best Ways to Set Up a Company in Hong Kong for US Expats
US expats can set up a company in Hong Kong while enjoying full ownership. You control the new company, as the sole director and shareholder. Whether you’re a seasoned entrepreneur or a start-up maverick, there are tailored pathways to navigate the company incorporation process efficiently and effectively.
Let’s explore the most advantageous routes to Hong Kong company formation.
1 Engage a local service provider
By partnering with a local service provider, you can tap into a wealth of experience and resources designed to streamline the company incorporation process.
With our on-the-ground knowledge and expertise, Osome can demystify the process and help you establish a private limited company that fully enjoys Hong Kong’s tax advantages.
Our professionals offer comprehensive packages that address everything from strategic planning to compliance with government regulations for your one company limited legal entity, ensuring a smooth process even if your parent company is involved.
Contact us for more details!
2 Work with legal advisors
Navigating the complexities of Hong Kong’s corporate landscape requires a firm grasp of its legal framework. Engaging legal advisors ensures that your company’s structure aligns with your business goals and adheres to all local regulations.
These experts can guide you through maintaining statutory records, appointing key personnel, a separate legal entity and protecting your intellectual property rights. They can also advise you on the intricacies of Hong Kong’s business process and communicating with Hong Kong authorities.
3 Online registration
The digital landscape has significantly simplified company registration in Hong Kong. Online registration can be completed in under an hour if your documents are prepared, with immediate issuance of the necessary certificates.
The Hong Kong Companies Registry, managed by the Inland Revenue Department, facilitates various registration requirements, such as applying for documents, notifying changes, and searching for business registration numbers.
The Companies Registry's e-Services Portal offers a seamless experience for submitting incorporation applications and fulfilling other electronic services. If you are struggling with the portal, reach out to the companies registry office during their business hour for guidance.
4 Visit Hong Kong
Some entrepreneurs may prefer a hands-on approach, such as visiting Hong Kong to set up their company. This path allows you to:
- Immerse yourself in the city’s vibrant business culture
- Navigate the incorporation process with a personal touch
- Benefit from the straightforward immigration policies for business owners
- Prepare diligently for the rigorous bank account opening process.
Moreover, establishing a company in Hong Kong can add a layer of legitimacy for startups eyeing venture capital or IPO prospects.
Summary
In conclusion, Hong Kong is a beacon of opportunity for US businesses looking to expand internationally. Its strategic location, robust legal system, and advantageous tax regime offer a fertile ground for business growth.
A registered company is documented in the Companies Registry. You must update your business information every time it changes. Meanwhile, keep a copy of all your company's articles and designated representative information at your local office. Remember, you must appoint a Hong Kong resident as your company secretary.
This guide will help you get your companies registered. If you need additional information, Hong Kong's Companies Ordinance is a wealth of resources, from forming a legal entity to tax requirements for a private limited company.
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
Why set up a holding company in Hong Kong?
Setting up a holding company in Hong Kong offers significant tax benefits, such as no value-added tax, sales tax, or capital gains tax, and a low corporate tax rate of 16.5%, with no withholding taxes on dividends and interests. These advantages can lead to increased profits and financial efficiency.
What is the minimum capital for a Hong Kong company?
Hong Kong companies have no minimum share capital requirement. Still, the general norm is to have companies incorporated have an authorized share capital of HKD 10,000 represented by 10,000 ordinary shares of HKD 1.00 each, with a minimum issued/paid-up capital of 1 share of HKD 1.00. So, the minimum capital for a Hong Kong company is usually one share of HKD 1.00.
How much does it cost to set up a company in Hong Kong?
Hong Kong company formation typically costs around HKD 9,053, but this can vary based on the specific services and options chosen during the setup process. Essential fees, such as the business registration fee, can significantly impact the total cost. The current business registration fee in Hong Kong is HKD 2,200.
Can a foreigner set up a company in Hong Kong?
Yes, foreigners can set up a wholly-owned subsidiary company incorporated in Hong Kong, which provides limited liability and tax advantages, making it the most common and preferred option. However, your company secretary must be a Hong Kong resident.
Can I register my Hong Kong company name in both English and Chinese?
No, you cannot register your Hong Kong company name in both English and Chinese. The company name must be entirely in English or Chinese, not a combination of both. If your new company is a Hong Kong limited company using an English name, your name must end with "Limited" instead of "Ltd."
Do I need to register a branch office?
Yes. You must register your branch office with the Companies Registry within one month of establishing a place of business in Hong Kong. The branch's name must be the same as the parent company. Note that your branch office is not considered a separate legal entity.
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