As we navigate the complexities of 2024, the appeal of Hong Kong as a global business hub connecting to Asia remains as strong as ever. As a Special Administrative Region (SAR) of China, Hong Kong offers a unique blend of economic and legal systems distinct from mainland China. For instance, Hong Kong adopts a Free Trade Policy and experiences less government interference compared to China.
This, combined with a common-law-based legal framework and a straightforward taxation system, including flat rate profits tax and favourable corporate tax rate, makes Hong Kong an ideal place of business for international entrepreneurs and a popular offshore banking location.
This article will explain in detail the steps to open a company in Hong Kong, the types of legal entities available, and the post-incorporation documents that you must be aware of before starting a business in Hong Kong.
Types of Business Entities in Hong Kong
Once you have decided to establish your company in Hong Kong, carefully consider which types of companies, businesses, or legal entities in Hong Kong best suit your business intentions.
To make this simple, we have listed the uses and features of the most common types of business entities below.
Private Limited Company
A private limited company is an independent legal entity capable of acquiring assets, entering contracts, incurring debts, and forming legal agreements, all conducted in the company's name and separate from its shareholders.
A private limited company is the most common way to establish a business in Hong Kong, as the business is seen as legally separate from its owners. This means that they benefit from limited legal liability, so any debts or financial obligations that are accrued won’t be the personal burden of the owner, unlike unlimited personal liability, where the company debts can be paid with the owner's personal assets, as in the case of a sole trader.
There can also be multiple shareholders with easily variable amounts of responsibility and control over the business. However, there are potential share transfer restrictions and a cap of 50 shareholders.
These entities are also commonly known as "private companies limited by shares," "limited liability companies," or simply "limited companies."
🔎 Tip: Explore our guide to Hong Kong Private Limited Company
A Hong Kong branch office functions as an extension of the parent company.
This entity allows an overseas company to operate directly in Hong Kong without requiring the lengthy process of re-establishing itself locally. All actions and liability are the responsibility of the overseas parent company.
🔎 Tip: Learn how to register a branch office in Hong Kong
This allows a foreign company to have a presence in Hong Kong to research the market, conduct promotional activities, and provide customer support. However, this entity type does not allow profit-making or independent legal activities.
A representative office is occasionally referred to as a liaison office.
🔎 Tip: Discover everything you need to know about opening a representative office in Hong Kong
This legal entity allows individuals to register themselves as the sole holder of all liability and obligations imposed upon them as the company holder.
However, it is extremely important to note that with this type of legal entity, the sole proprietor is subject to unlimited personal liability, unlike members of a private limited company. This means that the owner is personally responsible for all the business's debts.
Among all business types, this one carries the most substantial responsibility during a crisis. Although less appealing for larger enterprises, it can be a fitting option for small-scale businesses.
Sole proprietors are also commonly known as sole traders.
🔎 Tip: Learn how to register a sole proprietorship in Hong Kong
A partnership is an agreement between two parties to share the responsibility of the holding and running of the company. Hong Kong has two types of partnerships: General Partnerships and Limited Partnerships.
|Type of Partnership
|• Two or more partners
• Unlimited personal liability
• Quick and easy registration process
• Popular amongst small-company business owners
|Limited Liability Partnerships
|• Two or more partners
• Limited personal liability
• More complicated registration process
• Popular amongst medium-sized business owners
🔎 Tip: Discover the steps to register a Limited Liability Partnership (LLP) in Hong Kong
How to Open a Company in Hong Kong
To demonstrate the step-by-step process of company registration in Hong Kong, we will use the most common legal entity type as an example: the Private Limited Company.
We will look into the requirements for registering a company, including choosing a company name, selecting directors and shareholders, defining share capital, and appointing a company secretary and designated representative. We'll conclude with a look at the necessary documentation to be filed with the
authorities in Hong Kong.
1. Choose a Company Name
Choosing a company name is a fundamental step. The local authorities in Hong Kong will use this official name to address the entity.
When naming your Hong Kong company, you have the option to choose between English, Chinese, or both, but refrain from combining characters from both languages. If you decide on a Chinese name, you must use traditional Chinese characters, not simplified ones.
Your company name must not duplicate any existing company names. However, variations in letter case, spaces, and accent marks are not considered. We recommend having three options for the official name, as it’s common for company names to be already reserved.
If the proposed company name is ineligible for registration, the application may face rejection.
💡 Tip: The Hong Kong Company Registry will not approve company names that could cause confusion or controversy, and this selection process is based on their discretion.
2. Defining the Company's Purpose
Once you have selected your company name, the next step is to define the intention and outline the intended business activities in Hong Kong. A Private Limited Company in Hong Kong is allowed to engage in various profit-making activities such as manufacturing and ecommerce businesses.
However, it must be ensured that all intended profit-making activities are included in the initial statement of purpose as that is all the company will be entitled to engage in.
If you're unsure where to start, we suggest exploring this list of business nature codes and their descriptions.
Certain sales, activities, or specialised industries, such as the sale of alcohol, may require specific licensing. You can explore the Hong Kong Business Licence Information Service to determine if additional requirements exist for the business to operate legally.
💡 Tip: When making significant changes to the purpose or nature of a business, it's necessary to inform the changes to the Inland Revenue Department (IRD).
3. Organising The Company's Structure
After completing the first two steps, the next is to outline the internal structure of the Private Limited Company. As required by the Companies Ordinance law of Hong Kong, the following positions must be fulfilled:
- One shareholder (minimum).
- One acting Director (minimum).
- An acting Company Secretary: A person who is a Hong Kong permanent resident or a company in Hong Kong with an official certification.
- A Designated Representative: An individual authorised to act on behalf of the entity, and they must be a Hong Kong permanent resident.
- A designated registered business address to receive official notifications.
- Definition/Date of the end of the fiscal year. This will impact the date to declare taxes within the defined fiscal period.
4. Determining the Company's Initial Investment and Shared Capital
The minimum requirement for the initial investment is a share of HKD$1 (Hong Kong Dollar). The value of the shares or the number of shares can be modified and amended as the company's members see fit in the Articles of Association.
5. Planning the Company's Meetings
Regular shareholder meetings should be established to discuss the continued activities and oversee the company's changes and progress. It should be indicated within the Articles of Association how often a shareholder’s board meeting must be held to ensure that their voices are being heard in the continued running of the company.
It is mandatory to hold at least one AGM (Annual General Meeting) per year.
The decisions taken during these meetings, either special resolutions or ordinary resolutions, must be recorded and informed to the company members. The name of the record is called the meeting minutes.
6. The Company Formation Steps
Once all of the steps outlined above have been completed, the remaining step would be to submit the incorporation form that includes the company's name, purpose, and Articles of Association with all the details of the member's particulars, share capital, and the meetings.
You can submit your incorporation documents to the Hong Kong Company Registry through the 24/7 Companies e-Registry, by mail, or in person at the Companies Registry address: 14th floor, High Block, Queensway Government Offices, 66 Queensway, Hong Kong.
Setting up an Offshore Hong Kong Company
A Hong Kong company can be operated and established from anywhere in the world without needing to be physically present in the country. This is referred to as establishing your business offshore.
💡 Tip: Read our comprehensive guide on how entrepreneurs worldwide set up offshore companies in Hong Kong.
Post-Registration Company Documents in Hong Kong
After the proofs have been completed and submitted to the Hong Kong Authorities, such as the Companies Registry and the Inland Revenue Department, will issue identification documents to the newly established Hong Kong companies.
Here, we will detail the most common and relevant documents that the owners of Hong Kong companies must be familiar with
Certificate of Incorporation
The certificate of incorporation is one of the most essential documents for companies incorporated in Hong Kong. This proves not only the official existence of the company but also its legal right to operate.
The Hong Kong Companies Registry issues the document, which includes the identification number and date the company was officially established.
To authenticate a Certificate of Incorporation, you can use the Companies Registry e-services portal (Formerly the Integrated Companies Registry Information or ICRIS). This government platform allows the public to verify company information, such as its presence in the records, name changes, and date of incorporation. While basic information is accessible for free, more detailed documents can be downloaded for a fee.
🔎 Tip: Find all you need to know about Certificate of Incorporation in Hong Kong
Articles of Association
Before forming a company in Hong Kong, the owners and members must prepare a set of rules that will serve as operational guidelines. These are known as the Articles of Association.
The Articles of Association will include the share capital amount, the corporate shareholder's rules, and other key regulations that members and employees of the new company must follow.
🔎 Tip: Check out this guide for a complete overview of Hong Kong Articles of Association & why it matters
Business Registration Certificate
Another essential document is the Business Registration Certificate. This certificate is mandatory for any profit-generating activity. The Hong Kong Inland Revenue Department will issue this document, indicating the company is in operation.
Additionally, this document shows the registration number, usually used as the tax identification number outside of Hong Kong.
Usually, banks will require a current or valid Business registration certificate to verify the company's existence before opening a business account for companies.
🔎 Tip: Explore the ins and outs of Business Registration Certificate in Hong Kong
Maintaining Your Hong Kong Company
All companies, by law, whether local or overseas entities, operating in Hong Kong must have an appointed Company Secretary. A Hong Kong Company Secretary is the company's chief administrative officer responsible for ensuring legal compliance and good governance and maintaining communication with all the relevant government departments.
The mentioned position can only be filled by a natural person who must be a Hong Kong permanent resident or a company certified in Hong Kong to provide this service.
🔍 Tip: Find the right Company Secretary for your business based on verified Statrys client reviews.
The Significant Controllers Register in Hong Kong
The Hong Kong Significant Controllers Register is required since a new law was enacted in 2018. It names all the persons, either natural persons or legal entities, who hold "significant control" of the company.
To be considered a significant controller, an individual or company must possess 25% or more of the shares or voting rights in the company.
The Designated Representative is responsible for the Significant Controllers Register. They must keep the physical document at the registered business address or another approved location. The document must be available for the
authorities' inspection whenever requested.
💡 Tip: Read our dedicated article about the Significant Controllers Register in Hong Kong to learn more about the record and the designated representative.
What Is the Cost of Hong Kong Company Formation?
If you’re handling Hong Kong company formation on your own, your primary cost will be a government fee ranging from HKD 3,695 (online delivery) to 3,870 (hard copy delivery), along with variable costs associated with CPA certification (possibly HKD 200 - HKD 500 per passport), company secretarial services, and obtaining a registered office address.
Figuring out the actual cost can be challenging due to various factors, such as the complexity of the company, the need for extra licenses, and the number of shareholders, which all contribute to the overall expense.
However, if you use professional help for registration, the cost ranges from around HKD 6,000 to HKD 12,000, depending on what services are included.
💡 Tip: Explore our detailed report on Hong Kong company formation costs, sourced from real business owners operating in Hong Kong.
The company formation process can be confusing, especially if it is your first time. However, as long as you are patient and follow the steps in our guide, you should be able to register a company in Hong Kong.
If you don’t have the time to deal with paperwork, we suggest looking at Hong Kong company incorporation services providers. These professional services for company set-up can save you both time and money.
Launch Your Hong Kong Company with Statrys
Statrys offers an all-in-one service at a single price, encompassing not only everything required for company registration but also everything essential to kickstart operations in Hong Kong.
Here are the services we provide:
- Preparation and submission of incorporation documents
- Articles of Association
- Certificate of Incorporation
- Business Registration Certificate (valid for 1 year)
- Company chops (corporate seals)
- 24/7 access to company documents on Statrys’ online platform
Company Secretary Services:
- A Company Secretary (1-year term)
- A Designated Representative (1-year term)
- Annual Return filing (NAR1)
- Automated reminders for filing deadlines
- Maintaining the significant controller register
- Managing the statutory records
- Preparing for the Annual General Meeting (AGM)
- Convenient online access to all statutory records and compliance documents 24/7
- A registered Address in Hong Kong for one year
- Mail scanning and forwarding
- Applicable online business account opening with a corresponding payment card
- Document certification for business account opening
- Post-incorporation assistance
Statrys can also help you find the ideal accounting firm to meet your specific accounting and bookkeeping requirements in Hong Kong. Share your needs, and Statrys will gather quotes from different Hong Kong accounting firms, offering you a pool of fitting choices to select from.
How do I set up a new company in Hong Kong?
You can set up a company in Hong Kong by following these steps:
1. Get Familiar with Local Organizations and Institutions.
2. Choose a company name
3. Choose the Legal Vehicle of Your Company
4. Appoint a Company Secretary
5. Select the Registered Address of Your Company
6. Prepare the Incorporation Documents
7. Submit to the Companies Registry
8. Pay the Government Fee
9. Get Relevant Permits and Licenses (if necessary)
10. Keep Up With Your Taxes & Financial Reporting
How much does it cost to set up a company in Hong Kong?
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