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Why Register a Business in Hong Kong?

Hong Kong is a premier trading and service hub. With easy access to the market of Mainland China, along with an independent and free trade policy, it makes perfect sense for foreign entrepreneurs and multinational firms to incorporate a company in Hong Kong, which can be the launch pad of their operations in the region. 

Its vibrant economy consistently achieves top global rankings in economic freedom, creating a welcoming atmosphere for businesses and attracting international investors. Enhanced by government initiatives like InvestHK, special loan schemes, market funds, and incubator programs, these factors collectively bolster the attractiveness of establishing a business in this flourishing region.

Benefits of Starting a Business in Hong Kong

Tax Incentives: Hong Kong stands out with a low corporate tax rate of 16.5%, devoid of VAT or taxes on dividends and sales. It further sweetens the deal with a reduced tax rate of 8.25% on the first HKD 2 million in profits.

Simplicity of Setup: The region supports 100% foreign ownership and boasts a streamlined registration process that can be completed in as little as 48 hours.

Market Access: As a leading global financial hub, Hong Kong offers robust banking services, including multi-currency accounts. Its strategic location near mainland China and other Asian economies facilitates convenient access to extensive markets.

Hong Kong Company Setup Requirements

Do note, in Hong Kong, such companies require:

  • A registered office in Hong Kong
  • One company secretary, who might be a natural person (must then be ordinarily residing in Hong Kong), or a body corporate (must then have its registered office or place of business in Hong Kong)
  • At least one director who is a natural person but can be a non-resident in Hong Kong

It must be noted, though, that if the company incorporated has one director only, he or she cannot also function as the company secretary.

In terms of shareholding, in Hong Kong, shareholders are not required to be residents, and the director can also be the sole shareholder.

It must also be noted that in Hong Kong, a company must maintain up-to-date beneficial ownership information in the Significant Controllers Register, which should be open for inspection by enforcement upon demand. This is to enhance the transparency of corporate beneficial ownership in the jurisdiction.

How To Set Up A Company In Hong Kong In Five Easy Steps

Planning to sign up for Hong Kong company formation services? We detail the step-by-step procedure for company formation in Hong Kong below.

1. Choose a Hong Kong Company Name:

Companies set up in Hong Kong must have different and unique names as depicted in the index of company names kept by the Registrar of Companies.

So, decide on your company name, and carry out a free search at the Registrar’s website, the Hong Kong company register, to check its availability. It is also advisable to choose a name which depicts your company’s business activities.

2. Decide on a Hong Kong Company Structure

There are three business entity types prevalent in Hong Kong, depending on your business requirements.

Business Entity Description
Private Company Limited by Shares This is the most common type of company incorporated in Hong Kong, and it can enjoy the benefits of the Closer Economic Partnership Arrangement (CEPA), a free trade agreement with Mainland China.
Branch Office This is when a parent company – incorporated outside Hong Kong – wants to establish a place for carrying out its business in Hong Kong. Such a company may register in Hong Kong as a Registered Non-Hong Kong Company, and its branch office is not treated as a separate legal entity. Such an office can only leverage funds off the credit ratings of the parent company.
Representative Office  It is useful for companies incorporated outside Hong Kong, looking to explore the business scene in the region before making a larger investment. Such offices cannot engage in profit-making activities and can perform only certain functions, e.g. back office or administration.

Also Read: The Different Types of Business Entities in Hong Kong

3. Drafting and Filing the Incorporation Papers

After the name and structure are decided, an application for company incorporation can be made, which will include a simultaneous application for a business registration certificate. The documents required include:

  • Incorporation Form (Form NNC1 for a company limited by shares)
  • A copy of the company’s Articles of Association
  • A Notice to Business Registration Office (IRBR1)

The applications can be submitted either online – 1) via the 24-hour portal e-Registry, 2) via the “CR eFiling” mobile application, or 3) by delivering the documents in hard copy to the Companies Registry with the prescribed fees.

Staying true to Hong Kong’s business-friendly reputation, online applications for company incorporation are normally processed within an hour. Hard copy application generally takes four working days.

4. Obtaining Required Permits and Licenses

Although not all businesses require permits, specific sectors do necessitate various licenses. 

For instance, opening a restaurant demands acquiring a General Restaurant Licence, a Provisional General Restaurant Licence, and a Liquor Licence, which are all provided by the Food and Environmental Hygiene Department.

It is advisable to visit the Trade and Industry Department’s website to identify the precise licenses, permits, certificates, and approvals needed for your business.

5. Opening a Corporate Bank Account in Hong Kong

The procedure for opening a corporate bank account in Hong Kong is similar to that in other regions but includes some specific steps. It is crucial to have your company fully operational and demonstrate a viable business model to ensure the bank trusts the stability and prospects of your venture.

You must provide detailed evidence of your company’s potential, such as financial records, online presence, and projected profits.

Required documentation typically includes proof of business operations, registration certificates, and a completed application form for the bank of your choice.

Where To Next?

The dynamic city of Hong Kong, while serving as the perfect launch platform for companies looking to trade in Mainland China, is also one of the most tax-friendly jurisdictions in the world.

That’s why Hong Kong is:

  • Placed fourth in the world’s easiest place to do business by the World Bank’s Doing Business Report
  • First in the world’s lowest tax jurisdictions by the World Bank’s Doing Business Report
  • Fourth in the world’s business environment rankings by the Global Financial Centres Index 25
  • Second in the world’s fastest place to start a business by the Global Competitiveness Report 
  • First in the world’s freest economy by the Index of Economic Freedom

If you want to take advantage of all the above, contact us. Our team of Hong Kong company incorporation services experts will take you through the company incorporation and setup process.

FAQs

What are the 3 common types of business entities for company formation in Hong Kong?

The 3 common types of business entities for company formation in Hong Kong are branch office, representative office, and private companies limited by shares.

What are the documents required to incorporate a Hong Kong private company limited by shares?

Both the applications for Hong Kong company incorporation and subsequently business registration certificate will be made. The documents required are the following:

  • Incorporation Form (Form NNC1 for a company limited by shares)
  • A copy of the company’s Articles of Association
  • A Notice to Business Registration Office (IRBR1)
When should businesses register with the Business Registration Office of the Hong Kong Inland Revenue Department?

For successful company incorporation in Hong Kong, businesses should register within one month of starting the business.

Contact Our Hong Kong Team

Dominic Chan

Dominic Chan

Country Head

Guy Man

Guy Man

Director

Corporate Secretarial

Becky So

Becky So

Senior Manager

We make starting a business in Hong Kong easy

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