When doing business or investing in Hong Kong, you need to decide which kind of legal entity you would like to incorporate or register.
Hong Kong is almost-unique in Asia for its ‘common law’ regulatory environment for company incorporation and set up, meaning that the process is very similar to that in the UK, US, Canada, and Australia.
Here we explain set out the things you need to consider when thinking about the correct Hong Kong Incorporation Entity type.
Every Incorporation Entity Type in Hong Kong
The key incorporation entity types and business structures in Hong Kong are:
· Sole proprietorship
· Partnership (including limited liability partnerships) and
· Companies (including private and public, and companies limited by shares or guarantee).
Here we look at the costs and benefits of each business structure or incorporation entity type in Hong Kong. Take a look here at Every Incorporation Entity Type in Hong Kong
Business Registration Certificate in Hong Kong: Everything You Need to Know
In Hong Kong, incorporation and business registration are not the same thing. Whether incorporated as a company in Hong Kong or not, all businesses operating in Hong Kong need to approach the Inland Revenue Department for a Business Registration Certificate (BRC). The BRC ensures that the business (whether company, sole proprietorship, or partnership), is paying the correct tax in Hong Kong. Check out our article about Business Registration Certificate in Hong Kong: Everything You Need to Know
Choosing between a Hong Kong company, a partnership, or a sole proprietorship
How do you make the decision between the key Hong Kong company incorporation types/business structures? We suggest that you look at:
· The different applicable tax rates
· Liability (is it limited or unlimited?)
· Public reputation
· Ease of set-up and closure
· Compliance costs.
Read more about how Choosing between a Hong Kong company, a partnership, or a sole proprietorship
How to Register a Branch Office in Hong Kong
In addition to incorporating a Hong Kong company, it is possible for international companies to operate directly in Hong Kong. They can do this via registering a ‘branch’ of their foreign company with the Companies Registry in Hong Kong.
We explain the process, as well as the pros and cons, of setting up a branch office in Hong Kong. While straightforward to set up and closedown, branches expose the international company to liability for the actions and debts of their Hong Kong operations. See How to Register a Branch Office in Hong Kong
How to Register a Subsidiary Company in Hong Kong
The most common choice of incorporation entity type in Hong Kong is a subsidiary company. Here we set out all the steps that need to be taken to register a subsidiary company, including naming directors and shareholders, contributing share capital, appointing the company secretary, and filing all the necessary documentation with the authorities. Read about How to Register a Subsidiary Company in Hong Kong
How to Register a Sole Proprietorship in Hong Kong
Those doing business in Hong Kong can choose to register as a sole proprietor (what is known as a ‘sole trader’ in some countries), rather than incorporating an entity. While a straightforward process, this does carry risks (the business owner has unlimited liability for the debts of the business). Here we explain the steps you need to take to register a sole proprietorship in Hong Kong. See How to Register a Sole Proprietership in Hong Kong
