Company Registration in Hong Kong: The Definitive Guide 2024

If you’re considering registering your company in Hong Kong, this step-by-step guide is for you. 

Hong Kong was recently ranked 7th in the latest edition of the Global Competitiveness Booklet, and there are many reasons for its high ranking, such as its favourable tax system,  business-friendly environment, stable legal and political environment, and intellectual property protection. 

In this guide, I’ll share the steps required to register your company and discuss the benefits and things to consider before setting up a company in Hong Kong. 

Let’s get started.

There are many benefits to registering a company in Hong Kong. Here are some of the biggest benefits:

Incorporating a Hong Kong limited company enables you to operate your business from anywhere in the world. Whether you have a physical presence in Thailand or an online store in Singapore, your business can effortlessly reach a global audience without needing a physical presence in Hong Kong.

Hong Kong is a strategic gateway to Mainland China, offering access to a vast market of over 1.3 billion consumers. This facilitates seamless selling, marketing, and distribution of your products or services to a diverse and expansive customer base.

Hong Kong's multicultural environment and flexible work arrangements provide access to a pool of highly skilled and diverse talent from around the globe. This diverse workforce brings unique expertise and perspectives, enriching your company's capabilities and fostering innovation.

Hong Kong's government places a high emphasis on intellectual property (IP) protection, providing a comprehensive framework to safeguard businesses' innovative ideas, creations, and assets. This commitment ensures that your intellectual properties, innovations, and other valuable assets are adequately protected, fostering a conducive business growth and innovation environment.

Before we jump into how to register your business in Hong Kong, let's understand some key points.

When you start a business in Hong Kong, you'll have to work with three main groups:

• Your company secretary
• The Companies Registry
• The Inland Revenue Department (IRD)

Your company secretary will be the main person managing and setting up your company.

The Companies Registry and the Inland Revenue Department work together to ensure your business follows Hong Kong laws and keeps accurate records. They also oversee things like filing your annual return on time.

Additionally, Hong Kong is known for having one of the world's simplest and most business-friendly tax systems, making the city a preferred choice for conducting international business in Asia.

Hong Kong's corporate tax system offers two profit tax rates for companies, the single-tier and the two-tier.  

Single-Tier

• This option gives a rate of 16.5% based on assessable profits for companies.
• However, for unincorporated companies, the rate is 15%.

Double-Tier

• For incorporated and unincorporated companies, the second option lowers the tax rate for assessable profits within the first $2 million Hong Kong Dollars.
• This rate can be helpful for small and medium-sized enterprises, as it reduces the amount of taxes to pay, starting the year of assessment 2018/2019. To consult the tax rates in Hong Kong, please see the following link from the tax authority. 
• Companies with profits under the first $2 million cap get a concessionary tax rate of 8.25%. Any remaining profits above $2 million will be taxed at 16.5%.
• Unincorporated businesses with profits under the first $2 million are taxed at 7.5%, while all other profits above the first $2 million will be taxed at 15%.

If you’ve just started your company, and it has yet to reach profits of more than $2 million Hong Kong Dollars, it is recommended to use the Double-Tier tax system to enjoy lower tax rates.

Now, let's look at how to register your business in Hong Kong.

The first step in registering a company in Hong Kong is choosing a name. With over 1.3 million registered companies, finding a unique name can be challenging. Conducting a thorough name search and considering important factors when brainstorming name ideas is important. Ensure that the name is original and doesn't infringe on intellectual property rights.

You can register your company with an English or Chinese name, but it can't be a mix of both. If you choose an English name, it must end with "Limited" instead of "Ltd." If you find similar names to yours, consider adding extensions like "Asia Pacific" or "HK" to make it unique.
You can check the availability of a name on the Companies Registry website before you decide on a particular name.

The next important step is selecting your company's legal structure, which will impact various aspects such as tax filing and business operations. In Hong Kong, the leading legal entities to choose from include:

• Private Limited Companies
• Companies Limited by Guarantee (often for non-profits)
• Sole Proprietorships
• Partnerships
• Branch Offices

It's essential to understand the features of each structure, as the choice depends on your business's nature. However, private limited liability companies, also known as "limited companies" or "LLCs," are the most common choice. Registering a private limited liability company is likely the best option unless you have specific objectives that you would like to achieve with the other options available.

Appointing a local company secretary is mandatory for establishing a business in Hong Kong. Non-compliance can lead to fines or legal action.

The role of a company secretary in Hong Kong is distinct from that of an office secretary. Instead, think of a company secretary as a "compliance manager" for your business. They ensure your company operates according to local laws under the Hong Kong Companies Ordinance, regardless of size or listing status. Company secretaries handle legal and administrative matters, informing the company about legislative changes, necessary paperwork, and legal obligations. They are the primary contact with government bodies like the Inland Revenue Department, the Companies Registry, and the Hong Kong Stock Exchange. The company secretary will typically act as the designated representative of the company’s significant controllers’ register. Moreover, the company secretary organises and prepares the agendas and takes minutes of your board and annual general meetings.

The company secretary will typically act as the designated representative of the company’s significant controllers’ register.

Due to the complexity and importance of the role, many companies opt to outsource the position to specialised agencies for guaranteed expertise and compliance.

This step requires appointing two key legal representatives: directors and shareholders.

For directors:

• Every company must have at least one director, who can be an individual.
• Directors aren't required to live in Hong Kong or be shareholders.
• Their role involves managing the company's affairs, ensuring compliance, and acting in its best interests.
• Directors don't have to be employed or paid by the company.

For shareholders:

• A company must have at least one shareholder, with a maximum of 50.
• Shareholders can be individuals or companies without nationality restrictions.
• They don't need to reside in Hong Kong.
• Shareholders own the company and make key decisions, including approving annual financial statements and appointing directors.

It is important to note that any Hong Kong company must have these 2 types of legal representatives, and company directors are appointed by the shareholders.

In Hong Kong, every company must have a share capital, but the jurisdiction offers maximum flexibility in this regard:

• There's no minimum or maximum requirement for the share capital.
• The capital can be in any major currency, although the Hong Kong dollar (HKD), US dollar (USD), or Euro (EUR) are commonly used. 
• It's advisable to start with a modest amount of registered capital, such as 100 shares for 100 HKD.

Notably, there's no specific timeline for paying the share capital, nor is there a requirement to deposit it in a bank account before registering the company. If you're setting up your company remotely, you can explore options for obtaining a registered address in Hong Kong remotely.

When setting up a company in Hong Kong, you'll need to prepare several incorporation documents for approval before commencing business operations. Here's a breakdown of the required documents and how to prepare them:

• NNC1 Incorporation Form: This form, provided by the Companies Registry of Hong Kong, must be signed by at least one shareholder of your company.
• Identification documents: Copies of HK ID cards or passports of at least one shareholder and one director.
• Articles of Association: This legal document outlines the internal rules of your company, including share transfers, director appointments, and compliance with relevant ordinances.

Once you have these documents ready, you can submit them to the Companies Registry through various channels:

• The online portal platform of the Companies e-Registry is accessible 24/7.
• Mailing the documents to the Company Registry address.
• In-person submission at the Company Registry.

Alongside document submission, you'll need to pay the applicable government fees. These fees are typically paid annually, but it's essential to stay updated on any changes made by the HK government regarding fee structures.

Once all necessary documents are submitted, you can expect to receive your business registration and incorporation certificates within two to six business days, which can be collected at the Companies Registry office. These certificates confirm your company's existence and good standing in Hong Kong.

These documents are essential for opening a bank account, with the Business Registration Certificate (BRC) needing annual renewal from the Business Registration Office. On the other hand, the Certificate of Incorporation is valid indefinitely.

These documents contain basic company information like name, registration date, and address and do not disclose confidential details such as director or shareholder identities. It's crucial to safeguard these documents by entrusting the originals to your company secretary.

Once your company is set up, the next step is to apply to open business bank accounts. This step is crucial because you will need a business to send and receive payments to your business.

To help you get started, here is a list of the best business accounts in Hong Kong.

After your company is incorporated, the last advice we have is to stay on top of the taxes to ensure your company stays compliant in Hong Kong.

The tax benefits that Hong Kong offers are often cited as one reason why entrepreneurs around the world are opening offshore companies here.

Here are some of the benefits that you might be eligible for:

• Single-tier: It is set at a rate of 16.5% for the accessible profit of Hong Kong companies. For other types of businesses in Hong Kong, such as unincorporated entities, the rate is set as 15%.
• Two-tier: For this option, the tax rate is lowered to 8.25% but only for an amount of 2 million Hong Kong dollars on the assessable income.
• If the profit of a company exceeds 2 million, the remaining amount will be taxed at a rate of 16.5%.
• Offshore status: This means that your income will not be subject to local corporate profit taxes. However, only certain types of companies are eligible for this.

Deciding how to register your company is important to think about, because it can affect a number of factors. Here are some things to keep in mind, no matter which options you choose:

Registering Your Company Independently

• Cost-Effective: This approach allows you to avoid service provider fees, maximising your initial investment in your business.
• Full Control: You maintain complete autonomy over the registration process, ensuring all details align with your preferences.
• Educational Opportunity: Doing the registration yourself provides valuable insights into the legal and administrative aspects of business formation.

However, independent registration comes with its own considerations:

• Time Commitment: The registration process can be intricate and time-consuming, especially for those unfamiliar with legal and regulatory requirements in Hong Kong.
• Risk of Errors: Inaccurate filings can lead to delays and incur additional costs for rectification.
• Limited Support: Without legal expertise or a business advisor, you might overlook crucial steps or encounter compliance challenges specific to Hong Kong.

Using a Company Registration Service Provider

Next, let's look at the advantages of using a service provider in Hong Kong:

• Expert Guidance: Their experience minimises the risk of errors and ensures your company adheres to all legal requirements specific to Hong Kong.
• Enhanced Efficiency: They handle the paperwork and administrative tasks, allowing you to focus on core business development activities.
• Ongoing Support: A reputable service provider offers continuous guidance throughout the registration process and beyond, addressing any challenges that may arise specific to Hong Kong regulations.
• Faster Hong Kong Registration: Providers familiar with the Hong Kong business landscape can expedite the process and ensure compliance with local regulations.

Naturally, there are some trade-offs to consider:

• Cost: Service provider fees contribute to your startup expenses.
• Reduced Control: You delegate some control over the details to the service provider, so choosing a trusted and reliable partner is crucial.
• Potential for Dependence: While their expertise is invaluable initially, aim to develop your understanding to lessen reliance on them for future administrative tasks.

Statrys goes beyond simple company registration. We offer a one-stop solution, including:

• Company Registration: Handle all incorporation tasks, including document preparation and government fee payment.
• Company Secretary Services: Ensure compliance through annual return filing, record maintenance, and more.
• Registered Address: Provide a professional business address with mail scanning and forwarding.
• Business Account Assistance: We assist you with the application to our business account service, where we can provide multi-currency accounts for major currencies and physical cards.

With Statrys, you can register your company and open a business account in Hong Kong in less than 5 days! (Subject to applicable requirements and regulations).

Focus on your vision. Let Statrys handle the formalities. Get started today and set up your business in Hong Kong!