Travel and tourism are significant industries in Hong Kong. As an international business and finance hub, Hong Kong is a common destination for events, conferences, and general business dealings, alongside its robust tourism market: Before the Pandemic, tourism contributed around 4.5% of Hong Kong’s total GDP and accounted for about 6.6% of total employment. It is unsurprising then that running a Travel Agency is a popular business venture in Hong Kong and an industry that is strictly regulated by the government.
Starting a travel agency in Hong Kong requires the possession of a travel agent’s license. Here we explain the key steps you need to take to acquire a travel agent’s license and start your travel agency in Hong Kong.
What is the definition of a ‘travel agent’ in Hong Kong?
The definition of ‘travel agent’ in Hong Kong, is provided in the Travel Agents Ordinance (the Ordinance). The Ordinance distinguishes between inbound and outbound travel agents.
Outbound travel agents, as part of their business, obtain for another person:
- Carriage on a journey that begins in Hong Kong, and thereafter is mainly outside Hong Kong; or
- Accommodation outside Hong Kong, for which payment is made by or on behalf of that person.
There are two exceptions where the individual, though otherwise meeting the definition, will not be an outbound travel agent. This occurs where:
- The provider of carriage is themselves the operator; or
- The accommodation is for a period exceeding 14 days.
An inbound travel agent is defined as a Hong Kong person who, as part of their business, obtains for a visitor to Hong Kong:
- Carriage on a journey that begins outside Hong Kong and either -
- Accommodation in Hong Kong for which payment is to be made to that person, by or on behalf of the visitor, for the cost of that accommodation; or
- One or more of the following services:
There is an exception for any person or business which otherwise meets the definition set out above where:
- The provider of the carriage themselves operates the carriage; or
- The accommodation is to be occupied by the same person for longer than 14 days; or
- The provider of the services is themselves the owner/operator of the service being provided to the visitor.
Meeting either the definition of an inbound travel agent or an outbound travel agent requires a business to hold a Hong Kong travel agent’s licence.
What are the requirements for receiving a travel agent’s licence?
Before you apply for a Hong Kong travel agent’s licence you need to:
- Be a registered business in Hong Kong. It might be thought that Hong Kong travel agents need to be a Hong Kong-incorporated company. This is not so. An applicant for a Hong Kong travel agent's licence can be either an incorporated or unincorporated business (e.g., in the latter case, a sole proprietorship or partnership). What is crucial is that the business is registered as required for that type of business in Hong Kong;
- Ensure the applicant (or any of their business partners) is a ‘fit and proper person’ to hold a Hong Kong travel agent’s licence;
- Ensure that for a body corporate, in addition to the applicant, any controller, director, officer, or secretary of that body corporate is a ‘fit and proper person’;
- Organize suitable premises for operating as a travel agent in Hong Kong. This means you must have a dedicated space for the travel agency.
- Sort out membership of the Travel Industry Council of Hong Kong (TIC). Their website (http://www.tichk.org) provides further information on the procedure for TIC membership
What is the ‘fit and proper’ person test?
It is ultimately up to the Registrar of Travel Agents (the Registrar) to determine who is, or is not, a fit and proper person. However, matters that will be taken into account include:
- Whether the individual has been convicted of a dishonesty or fraud offence;
- Whether the individual has been convicted of an offence against the Ordinance;
- In the case of a natural person, whether the individual is an undischarged bankrupt or has entered into a creditors’ arrangement (such as a scheme of arrangement);
- In the case of a body corporate, whether it is in liquidation, subject to a winding-up order, in receivership, or whether it has entered into another formal insolvency process.
What happens if you don’t apply for a licence?
Under section 9 of the Ordinance, it is an offence to carry out the work of a travel agent without a licence: Under section 48(1)(a), contravention of section 9 is an indictable offence, liable to a fine of $100,000 and imprisonment of up to 2 years.
Action can also be brought as a summary offence (a less serious offence, triable only in the Magistrates’ court) for a fine of up to $10,000, and imprisonment for up to 6 months.
How does licence renewal work?
Once issued, the licence is valid only for the period stated on the licence. Applications for renewal must be made no earlier than two months, but no later than one month, prior to expiry. Operating as a travel agent after expiration of the licence can result in a fine of up to $100,000 and imprisonment for up to two years.
When is a licence amendment required?
As the licence refers to key details relating to the business, it is crucial that an organization applies to amend their licence where necessary. This means applying to amend particulars where there is a:
- Change of business address. This includes a change in the address of the head office or branch office. The application for amendment should include a duly amended TIC membership certificate, a duly amended business registration certificate (BRC) approved by the Inland Revenue Department, and a certified copy of a new tenancy agreement or record of ownership;
- Opening of a new branch. This requires approval from the Registrar and will require documentation relating to the registration of the new branch with the TIC and the Inland Revenue Department;
- Change of ownership or control. A change of shareholders, directors, partners, sole proprietor, officer, or controllers requires prior approval from the Registrar;
- Increase in paid‐up capital. This also requires prior approval from the Registrar. A certified copy of the Board Resolution and form reporting the allotment of shares is required;
- Change of company name/trade name/addition of trade name. This also requires written approval from the Registrar, as well as documentation relating to amended TIC membership, an amended BRC, and a Certificate of Change of Name of Company (where applicable).
Which documents must I submit with my application?
Once you have decided to apply for the licence, alongside the licence application form, other required documentation includes:
- For companies, a Board Resolution indicating the appointment of an authorized person for licensing matters;
- Certified copies of Hong Kong ID cards or other travel documents for all controllers, shareholders, directors, secretaries, and officers named in the application;
- For each controller, shareholder, director, secretary or officer named in the application, the following forms: Authorisation to the Police; Authorisation to the Official Receiver’s Office; Authorisation to the TIC. These authorisations allow the Registrar to vet applicants properly;
- A certified true copy of Proof of Residential Address within the last three months for all controllers, shareholders, directors, secretaries and officers named in the application;
- A resume for each of the controllers, shareholders, directors, secretaries and officers named in the application, setting out their respective career backgrounds in the travel industry;
- A ‘Scope of Business’ document;
- A certified copy of the valid BRC;
- A certified copy of the Certificate of Incorporation, Memorandum and Articles of Association for incorporated bodies;
- A certified copy of the TIC membership certificate;
- For incorporated bodies, a certified copy of the form reporting the allotment(s) of all shares in the company;
- Share transfer documentation;
- For corporate shareholders, a certified copy of the latest Annual Return;
- For companies, a certified true copy of forms relating to changes of directors and officers;
- A certified copy of the tenancy agreements or record of ownership for the office;
- An estimated business budget for a given period (six months or a year), relating to forecast travel business operations.
Starting a travel agency in Hong Kong
Starting a travel agency in Hong Kong means ensuring that your business has the necessary registrations in place, and that you have a valid travel agent’s licence. Failure to hold a travel agent’s licence, or to comply with licence conditions, can result in hefty fines or imprisonment.