It's one of the most important documents for your business. When you decide to start a business in Hong Kong, you need to consider the rules for business registration: This applies equally whether you intend to register a company in Hong Kong, begin a sole proprietorship, form a partnership, or engage in some other form of business enterprise.
The Inland Revenue Department manages business registration and registered businesses receive a business registration certificate, very commonly called the BR in Hong Kong service providers.
Here we explain how business registration in Hong Kong works: including how to register a business in Hong Kong initially, how to renew your business registration, and the potential penalties for non-compliance.
Which Businesses Require a Registration
According to the Companies Ordinance, all the following business structures and entities must be registered to operate in Hong Kong, including local companies and representations of international entities:
- Companies that are incorporated in Hong Kong. This includes companies in Hong Kong that are subsidiaries of international enterprises. And it applies whether the business operates solely in Hong Kong or operates in other jurisdictions;
- Branches or representative offices of international companies; branches will obtain their own branch registration certificates;
- Partnerships, including limited partnerships;
- Sole proprietors and self-employed.
Business registration is a requirement for any activity which makes a profit. Sole proprietors who are not residents of Hong Kong may use an authorized agent to register their business in Hong Kong. The key exception to the requirement for business registration is where income arises from employment.
What To Include In a Business Registration Certificate
The business registration certificate ('BR') must be applied for within 30 days of commencing business operations and contains the following information:
- The business name;
- The business's physical address;
- The type of business and the nature of its activities;
- The date of beginning operations;
- A Business Registration number;
- Date of expiry.
When To Register Your Business
When doing the incorporation of a company in Hong Kong, you should apply immediately after receiving your certificate of incorporation from the Companies Registry.
To facilitate the process, the Hong Kong authorities have set up the "One-stop Company and Business Registration service" available on the Companies Registry website.
Once the incorporation form is submitted to the Companies Registry (Form NNC1, NNC1G, or NN1), it will be considered the Business Registration application to be made at the same time as the business registration office, making the company registration process easier for applicants.
Where you are commencing a self-proprietorship, partnership, branch, representative office, non-Hong Kong company, or sole proprietorship, you should apply for business registration within one month of the commencement date of operations with the business registration office.
What To Do With The Business Registration Certificate
Once you have received the Business Registration Certificate or BR, you should display it in your place of business so that the Hong Kong authorities can review it when necessary.
Besides being a compliance requirement, displaying your BR also promotes the business's reputation in the eyes of the consumer and any potential investors of business in Hong Kong.
The Penalties For Failing To Register Your Business
If you fail to register your business on time, as required under the law, you may be subject to stiff penalties — a fine of $5,000 and up to 1 year of imprisonment.
Even more serious is the fact that you will struggle to file your tax returns without a business registration number. Failing to file your tax returns, and pay the appropriate amount of tax, is an even more serious compliance breach than failing to register your business.
Note also that if you have failed to register your business and then subsequently do so at a later date, you will need to pay for all periods of non-registration, including any late penalties.
How To Renew a Business Registration Certificate
On application and payment of your registration fee, you will elect to have a BR for either one year or three years.
During the month prior to your current BR expiring, you should receive a demand note from the Inland Revenue Department asking for full payment of the business registration fee to renew your certificate.
If you do not receive such a demand, you should contact the Inland Revenue Department. Once the business registration fee is paid, the demand note converts into the new valid business registration certificate.
As part of the business incentives, the Inland Revenue Department notifies each year of different benefits, including a waiver of the Business Registration fee.
It is important to consult the last revision date on the official website of the authority and know the correct amount for the business registration fee applicable for your company registration.
Why It's Important To Register Your Business
Some businesses incorporate local companies in Hong Kong and believe that is the end of their compliance obligations. This is incorrect.
Business registration is a separate and crucial step. Whether you are operating through a Hong Kong company or any other kind of business setup, it is crucial that you receive a business registration certificate issued by the Inland Revenue Department.
One important piece of information in your Business Registration Certificate is the number given to the company. This number can be used as the Tax Identification Number or TIN for a business in Hong Kong.
Seek Expert Advice On Business Registrations and Renewals
The business registration certificate in Hong Kong can be obtained during the company incorporation. Your service provider, either a company secretary, lawyer or advisory firm, can perform the application and obtain the certificate for your company in accordance with the Companies Ordinance in Hong Kong.
If you do not have a service provider to help you with the company incorporation and obtain your business registration, you can contact Statrys at firstname.lastname@example.org or visit our Company Secretary Review page and find the right option for your project.
The business registration certificate is not only important during the incorporation of the company, but is crucial for proper compliance, reporting with the authorities, identification, and useful for third parties like banks and other entities. Maintaining the document up-to-date will make the operation smooth and easy for business owners.
Which businesses need a Business Registration Certificate?
All business structures and entities that operate in Hong Kong and make a profit, including subsidiaries of international enterprises, branches, representative offices, partnerships, sole proprietors and self-employed individuals.
What is a "Business Registration Number"?
What happens if I fail to register my business on time?