As you are getting closer to moving forward with your business idea in Hong Kong, it's time to explore the options for your Hong Kong company. As you go through the prerequisites to register your business, you see that you need to have an address that will serve as the official location of your company.
But then, a vague memory comes across your head, and you remember that you have heard from the news or your business contacts how expensive it is to buy property in Hong Kong. Out of curiosity, you do some research and in fact, the real estate market of Hong Kong ranks as one of the most expensive cities in the world for buying flats.
Nevertheless, with more research, you have also found many options to solve what seems to be a barrier to starting your business. Luckily, this same real estate market is well-diversified and adapted to different business needs of all sizes and scales. What catches your eye is the Virtual Office.
In this article, we will focus on the scenario of having a virtual office address for a Hong Kong private limited company. More details will be explored in the below sections.
Virtual office address
Before we start with this section, it is important to highlight that it is a requirement by the law of Hong Kong, the Hong Kong Companies Ordinance, that businesses registered in this jurisdiction have a designated Hong Kong business address. This address will serve as the location where your company will receive all the official notifications from the local authorities such as the Hong Kong Companies Registry or the Hong Kong Inland Revenue.
Although it is a requirement to have a registered address, it was not clearly stated in the law what business addresses are. This is where the concept of a virtual office comes in. A virtual office address allows individuals to use an authorized address for their Hong Kong company without having to formally sign a lease for a physical space.
Usually, other companies or service providers are the ones that offer a package together with acting as your Company Secretary. This is normally known as a virtual office package. Moreover, it is a mandatory requirement to have someone qualified to act as your Company Secretary for your Hong Kong company. At Statrys, we created a reviews page that our customers can use to write reviews of local company secretaries in Hong Kong. You can read the reviews here to find the right Company Secretary for your needs.
Now that we have gone through the basics of what and how a virtual office works, let's discuss more details of using a virtual office address for your Hong Kong company in the next sections.
In this section, we will go through some of the most common positive aspects of using a virtual office:
- Price: Comparing the price of using the service of a virtual office address to signing a lease of a physical office, either in a serviced office, business centre, or co-working space, your business operations expenses can be greatly reduced by this option. For example, the service to use a registered address, provided by a third party, is charged annually and is substantially lower than the monthly rent for office space in Hong Kong.
- Virtual office packages: As we have mentioned in the first point, the price is quite attractive compared to other options. Additionally, it is common to have packages for the service that go together with someone acting as your Company Secretary, making compiling with the local requirements way easier and cheaper for your business expenses.
- Prestigious virtual office address: As it is widely used, virtual offices are located all over Hong Kong, allowing you to use a more known address without having to pay the premium fee for renting a physical office. Let your clients know your prestigious business address in the signature of your daily email exchange communications.
- Virtual office services: The pickup courier services are normally included in your virtual office package. Once your company receives important notifications from the government authorities, your service provider will let you know, so you don't have to worry about missing any of the important deadlines to comply with the laws of Hong Kong.
- Easy to change virtual address: As it is not a physical office with a deposit and a lease, it is significantly easy to change service providers and addresses. Nevertheless, it is important to notice that there is a process that needs to take place between the old and new service providers and handle the corporate documents of the company.
In the previous section, we analysed the good side of having a virtual address. Now we will review the downsides of using this option for your Hong Kong business:
- Physical office space: One of the biggest downsides of using a virtual office, is the lack of the right to use physical space for your business. Normally, businesses that provide the service of a virtual address, do not allow their clients to use their meeting rooms or other facilities. This point can be clarified in the service contract or in the virtual office package to see which perks are included and which are not.
- Business compliance operations: Not all businesses in Hong Kong can be operated through a virtual address. Some businesses, such as those related to preparing food, displaying items, or storing, need to comply with some physical office space regulations and laws for the safety of the customers. For more details about this scenario, you can see our dedicated article for getting a private office in Hong Kong.
- Internal team operations: Although not having a physical office space does not impede hiring staff in Hong Kong, some businesses that need face-to-face and constant interactions to operate properly could be a challenge for communication. Going back to the first point mentioned in this section, the lack of physical space is the main downside, and even though it is not a general rule and not all businesses are the same, it could indirectly affect business operations.
We recommend learning more about private offices in Hong Kong and comparing them with virtual offices before deciding which option is right for your business.
As we have analyzed in this article, having a registered business address in Hong Kong, is an essential part of having a company in the jurisdiction. With the many options available in the real estate market, the virtual office is widely popular for businesses that do not require a physical office space. Additionally, it greatly reduces the cost of operations and there are a lot of service providers with virtual office packages.
What does a Virtual Office service include?
The pickup courier services are normally included in your virtual office package. Once your company receives important notifications from the government authorities, your service provider will let you know, so you don't have to worry about missing any of the important deadlines to comply with the laws of Hong Kong.
Why use a Virtual Office in Hong Kong?
Which business type cannot use a Virtual Address?