Setting up a Company in Hong Kong the Easy Way in 2024

Hong Kong is one of the most business-friendly cities in the world, and as a result, it attracts global entrepreneurs and companies. With favourable tax regimes, a strategic location in Asia, and a highly skilled workforce, it makes sense that you'll want to set up a business here in Hong Kong.

This article will explain the necessary steps, requirements, and tips for those of you who are unfamiliar with the local laws and regulations in Hong Kong.

Why Set Up a Company in Hong Kong?

Beyond its vibrant culture, superb infrastructure, and high standard of living, Hong Kong is renowned as one of the world’s hubs for international trade and investment. It is also among the countries with the freest economy in 2023.

Here are four reasons why setting up a company in Hong Kong can help your business thrive.

1. It’s Straightforward and Cheap to Set Up

Company registration in Hong Kong is relatively fast and cost-efficient. You can usually get a business registration certificate from the Hong Kong Companies Registry within a few days, and the government fees for incorporation are reasonable and transparent.

Hong Kong offers a business-friendly environment with minimal bureaucratic constraints; it does not require minimum registered capital or a local director, and there is no restriction on foreign investment. 

🔍Tip: How much does incorporating a Hong Kong company cost? Statrys conducted a survey study of 120 entrepreneurs to find out how much it costs.

2. Hong Kong Offers a Vibrant Business Environment

Home to over 360,000 SMEs, Hong Kong is a dynamic hub for start-up growth and development with its adaptability and innovative environment. According to IMD World Competitiveness Center’s report, Hong Kong ranks among the world’s top ten countries with a competitive economy.

The Hong Kong Government also supports innovation and technology development. In 2023, it allocated HKD 500 million to launch a Digital Transformation Support Pilot Programme to provide SMEs with essential digital solutions.

That’s why many entrepreneurs use Hong Kong as a strategic springboard to expand their businesses in the rest of the region.

For more information, we interviewed InvestHK, the government body in charge of attracting and retaining foreign direct investment, which is strategically important to Hong Kong's economic development.

3. Taxes Are Business-Friendly

Hong Kong has a two-tiered profit tax rate for corporations with an exemption for the first HKD 6,000 profit. Incorporated companies pay 8.25% tax on earnings up to HKD 2 million and 16.5% on any part of the profits over HKD 2 million. This tax system is one of the lowest in Asia and globally. 

Additionally, it has a territorial tax regime, which means there is no corporate tax for companies conducting their business outside Hong Kong.

4. No VAT or Tax on Capital Gains

Another significant benefit of setting up a company in Hong Kong is the absence of certain taxes common in other jurisdictions, such as Value-Added Tax (VAT) or Goods and Services Tax (GST). Profits from selling an asset, such as property or shares, are also not subject to capital gains tax.

How to Set up a Company in Hong Kong

There are ten steps to set up a company in Hong Kong:

1. Get familiar with local organisations and institutions
2. Choose your company name
3. Choose the legal entity of your company
4. Appoint a company secretary
5. Select the registered address of your company
6. Prepare the incorporation documents
7. Submit to the Companies Registry
8. Pay the government fee
9. Get relevant permits and licences
10. Keep up with your taxes and financial reporting

You can follow these steps yourself or opt for a more convenient route by using a company incorporation service that simplifies the process, handling everything from document submission to regulatory compliance for you.

Let’s look at each step in detail.

Step 1. Get Familiar with Local Organisations and Institutions

When setting up your company, you will have to engage with two government departments mainly:

The Companies Registry

The Companies Registry is the government’s business registration office responsible for company incorporation in Hong Kong.

Its role also includes overseeing companies to ensure they comply with corporate laws and regulations following the Companies Ordinance. 

The Inland Revenue Department

The Inland Revenue Department (IRD) in Hong Kong is responsible for the administration of taxes and duties as a government department. 

You must file your company tax return with the IRD every year to determine how much tax your company has to pay.

Step 2. Choose Your Company Name

The actual company registration process begins with choosing a name for your company. It can be in Chinese, English, or both. However, the name must not combine both English and Chinese characters.

If your company name is in English, it must end with “Limited.” You must use traditional characters if you name your company in Chinese, and it must end with “有限公司.”

The Companies Registry may reject your application if you choose an unregistrable name. To avoid that, here are some helpful tips on company naming.

Tip #1 – Check if the name is available on the Hong Kong Company Registry’s website. Alternatively, you can send a list of names to your company secretary to check. 

Tip #2 – Make sure your company name is not trademarked in Hong Kong or other regions to avoid legal cases. You can verify that your company name is free to use on the Intellectual Property Department’s Online Search System. 

Tip #3 – Protect your company name by registering it as a trademark at the Hong Kong Intellectual Property Department. 

If you need more details on company name registration, check the Companies Registry guideline.

Step 3. Choose the Legal Entity of Your Company

Now that you have your company's name, the next step is to decide what legal entity is best for your business. 

Choosing the right business structure is essential in new company formation, as it affects your tax responsibilities, flexibility of business operations, and legal liability.

There are three main types of business entities in Hong Kong:

1. Public and Private Limited Company
2. Sole Proprietorship
3. Partnership

Among these options, a limited company is the most popular and common type of company structure in Hong Kong for multiple reasons. 

Firstly, this business type offers the shareholders limited liability. This means that their financial risks do not extend beyond the amount in their share capital investment, protecting their personal assets from the company’s financial obligations. 

Secondly, the share-based structure of a private limited company facilitates capital growth and expansion as it attracts external funding from investors. 

On that note, transferring shares from one shareholder to another is a very straightforward process in a limited company. This convenience makes it an attractive choice for businesses aiming to expand and readily adapt their ownership structure to include new investors.

Step 4. Appoint a Company Secretary

All companies in Hong Kong are required to have a local company secretary.

It is mandatory to appoint a company secretary when registering your company, as they are a direct point of contact for inquiries from authorities, ensuring regulatory compliance and operational transparency.

Your company secretary will be in charge of ensuring that your company is in good standing with the regulations governing the incorporation and maintenance of companies in Hong Kong. They also have other responsibilities, including filing annual returns, managing company seals, and helping with company restructuring. 

🔍 Looking for a Company Secretary? With over 6,000+ company secretaries in Hong Kong, it's easy to make the wrong choice. Read their reviews first before deciding on the right company secretary for you.

Who Can Be Your Company Secretary?

A company secretary can be an individual Hong Kong resident or a certified company. You can appoint your friends or family, provided they reside in Hong Kong and are familiar with a company secretary's complex responsibilities and duties.

To ensure your company complies with Hong Kong corporate laws and regulations, we recommend choosing a qualified company secretary with a TCSP licence. 

What Does a Company Secretary Do for Your Business?

Do not underestimate how much time and trouble your company secretary can save you.

The services your company secretary may provide include:

• Maintaining your company records, such as the register of directors, the register of shareholders, the share certificates, and the significant controller register
• Organising, preparing the agendas for, and taking minutes of your board and annual general meetings
• Arranging your tax filings
• Monitoring changes in relevant legislation and the regulatory environment and taking appropriate action

Step 5. Select the Registered Address of Your Company

Your company's registered address is the address at which governmental departments will send correspondence.

Using your company secretary’s address as the registered address is common and recommended to ensure you receive all official communications and legal documents, especially if you do not have physical offices in Hong Kong. 

If you change your office address, ensure that you fill in the NR1 Form and notify the related authorities to prevent missing important correspondences. 

Step 6. Prepare the Incorporation Documents

Unlike many countries, the incorporation process in Hong Kong does not require an extensive amount of documentation.

Here are the required documents for company incorporation: 

• NNC1 and IRBR1 Forms for companies limited by shares. The incorporation forms must be filled in and signed by one of the shareholders. 
• Copies of the directors’ and shareholders’ identification documents (Hong Kong ID cards for Hong Kong residents and passports for foreigners).
• A copy of the company’s Articles of Association outlining the company's internal governance rules, such as director appointments, share transfers, and financial management. The company secretary typically provides this document. 

📖 Want to learn more? We have a detailed guide on company formation in Hong Kong in 2024.

Step 7. Submit to the Companies Registry

Incorporating your company with the Hong Kong Companies Registry is a straightforward process.

You can submit the incorporation documents in one of the following ways:

• Online submission through e-Registry Portal
• Send by mail to the Companies Registry’s address to 14/F, Queensway Government Offices, or
• In person at the Shroff Counters at the Companies Registry office.

Within 2 to 6 business days after submission, the Companies Registry will issue two documents evidencing the incorporation of your company: the certificate of incorporation and the business registration certificate.

Both certificates can be collected in person at the Companies Registry or electronically.

Keep in mind that the certificate of incorporation is issued only once when your company is set up and remains valid during the entire lifetime of the company.

On the other hand, the business registration certificate is only valid for one or three years.  It must be renewed every year within one month following the anniversary date of the establishment of your company (otherwise, fines will be issued).

Step 8. Pay the Government Fee

At the time you submit the incorporation documents to the Companies Registry, you will be required to pay the applicable government fee.

Below are the incorporation fees for Hong Kong private limited companies. Please refer to the Companies Registry’s official website for other related service fees.

💡 In cases of unsuccessful applications, Companies Registry may refund around 80% of the application fee. 

Step 9. Get Relevant Permits and Licences (If Necessary)

Typically, you would not need permits or licences to do business in most industries in Hong Kong. 

However, some types of businesses need to apply for licences and permits, such as restaurant licences, liquor licences, money service operators licences, and import and export licences.

For instance, if you’re opening a restaurant, you must obtain a General Restaurant Licence, a Provisional General Restaurant Licence, and a Liquor Licence from the Food and Environmental Hygiene Department.

You can visit the Trade and Industry Department website to find out which licences, permits, certificates, and approvals are needed for certain businesses.

Step 10. Keep Up With Your Taxes & Financial Reporting

At the time of incorporation, the Companies Registry will automatically report your company's existence to the Internal Revenue Department.

However, it is your responsibility to keep up with your financial reporting. Typically, your company secretary should handle your reporting and tax notifications, as well as communicate with you on this matter, depending on the level of service your company secretary provides. 

For more information and updates regarding the rules and regulations for tax in Hong Kong, you can check the Hong Kong Government’s website.

The Easiest Way To Set up a Company in Hong Kong

Setting up a company in Hong Kong can be a tedious process if it is your first time. That is why Statrys offers a Hong Kong company registration service that makes it simple for individuals or businesses. When you incorporate or register your Hong Kong company with us, you will get the following:

Additionally, you can open a multi-currency business account with Statrys to streamline your company operation in Hong Kong. You can get monthly fees waived and save HKD1,056 per year on your Statrys Business Account when you use our company secretary services.