BR Fees (business registration fees) —You may have seen it on the list of your requirements and wondered what it entails when setting up a business in the Hong Kong business centre. So what is it?
BR Fees is a critical aspect of doing business in Hong Kong that can’t be overlooked. Not only do these registration fees forms part of your financial obligations to the government, but recent changes to the fee structure also mean that staying informed is more important than ever.
In this comprehensive guide, we’ll explain everything you need to know about the BR Fee, from its purpose and calculation to the latest updates and how they could impact your business.
Whether you’re just starting your entrepreneurial journey or looking to optimize your existing operations, this guide will equip you with the knowledge and insights needed to comply with the BR fee requirement with confidence, and make sure you’re able to calculate tax liability efficiently and with ease.
What is a business registration or BR fee in Hong Kong?
The Business Registration fee (BR fee) is a mandatory annual payment for all businesses operating in Hong Kong. This fee is essential for legally recognizing your business with the Hong Kong government and ensuring that your company complies with local regulations.
Paying the BR fee officially registers your business, granting you a certificate validating your operations. This company incorporation certificate is a formality and a critical document demonstrating your business’s legitimacy and allowing you to operate legally within the city. Understanding and complying with the BR fee is crucial for maintaining your business’s legal standing and credibility in Hong Kong.
Additionally, be aware of other fees, such as knowing how to calculate stamp duty, which may apply to various transactions, including property tax returns and financial dealings, further contributing to the regulatory compliance of your business operations in Hong Kong.
Who needs to pay the business registration fee?
The short answer: pretty much every business in Hong Kong. Whether you operate as a sole proprietorship, partnership, or limited company, registration and payment of the business registration fee are mandatory.
Even if your business isn’t making any profits, you must register within one month of starting operations. The only exceptions are if you’re running a charitable organization or if your business is already registered under the Business Registration Ordinance.
How much is the business registration or BR fee in Hong Kong?
The Business Registration (BR) fee in Hong Kong depends on whether you choose a one-year or three-year certificate:
- One-year Business Registration: HK$2,200 (current charges starting from April 1, 2024)
- Three-year Business Registration: HK$5,870 (total fee for three years)
Note that branch registration fees are different from this.
The fees were increased in April 2024, and there’s always a chance they could change.
Understanding the business registration certificate and levy table
Congratulations on successfully registering your business in Hong Kong. Now, let’s delve into the specifics of the Business Registration Certificate you’ve received and the accompanying levy table.
The Business Registration Certificate is a crucial document that legitimizes your business operations in Hong Kong. The levy table on the certificate outlines the various fees and charges associated with maintaining your business registration.
Let’s clarify this information to ensure you fully understand your obligations and can manage them effectively.
What information is included on the business registration certificate?
The Business Registration Certificate is essentially an ID for your business, listing all the crucial information like the company’s name and other specifics.
- Business Registration Number (BRN)
- Business name
- Business address
- Nature of business
- Commencement date
- Expiry date of the certificate
The certificate also includes a levy table showing the business registration fee and levy amounts based on when your business commenced.
How to calculate the business registration fee using the levy table
Important updates have been made to business registration fees in Hong Kong. As of April 1, 2024, the base fee for a one-year Business Registration Certificate has increased to HK$2,200.
However, there’s some good news for new businesses—the HK$150 levy that used to contribute to the Protection of Wages on Insolvency Fund has been waived for two years, starting from April 1, 2024. This means you’ll only pay the base registration fee when starting your business during this period.
While the levy is currently waived in Hong Kong, the levy table can still be helpful for understanding prorated fees if your business starts before April 1, 2024. Here’s how to calculate the fee using the levy table (remembering the levy is currently waived):
- Obtain the Levy Table: You can download the Business Registration Fee and Levy Table from the Companies Registry website.
- Identify Your Commencement Date: This is the date your business officially started operating.
- Find the Corresponding Row and Column: The table will have rows representing the commencement date range (e.g., Jan-Mar 2023, Apr-Jun 2023) and columns for the type of certificate (one-year, three-year).
- Locate the Fee: The base registration certificates’ fee amount (excluding the currently waived levy) is located at the intersection of your commencement date range and chosen certificate type.
Example (assuming levy was not waived):
Let’s say your business started on July 1, 2023 (before the levy waiver), and you want a one-year certificate.
- Find the row for “Jul-Dec 2023” on the levy table.
- Locate the column for “One Year Certificate.”
- In this cell, you’d find the base registration fee of HK$2,000, which you would then add to the levy amount of HK$150 for a total fee of $2150.
Can the business registration fee be waived?
There isn’t a single program to waive business registration fee in Hong Kong. However, there are a couple of scenarios where you might not have to pay the full fee:
- Temporary Levy Waiver: The HK$150 levy is temporarily waived for two years to support the Protection of Wages on Insolvency Fund. This waiver applies to businesses registered on or after April 1, 2024. During this period, you’d only pay the base registration fee.
- Fee Reduction (Past Program): In 2022, a one-year waiver of the business registration fee was implemented in response to the economic challenges brought on by COVID-19. This program is no longer active.
It’s always recommended to check the latest information from the Hong Kong Government website for any updates on fee structures or potential waivers.
Is there a concessionary refund for the business registration fee?
The Inland Revenue Department (IRD) offered a one-time concessionary refund scheme for the 2022-2023 period, but this program has ended.
The IRD offered a concessionary refund for the business registration fee paid by businesses that registered between April 1, 2022, and March 31, 2023. This program aimed to provide financial relief during the COVID-19 pandemic.
The refund amount was based on the pro-rated fee for the period the business wasn’t required to renew its certificate due to the fee waiver that was in place then.
How often must the business registration fee be paid?
The business registration fee in Hong Kong is an annual renewal fee. This means you must pay it every year or every 3 years (if you opted for the 3-year certificate) to maintain your business registration documents specifically the Business Registration Certificate (BRC).
How can Sleek help?
At Sleek, we understand that navigating the business registration process in Hong Kong can be overwhelming. That’s why we’re here to simplify every step for you. We provide comprehensive support with BR fees and the entire incorporation process. Here’s how we can assist:
- Expert Guidance: We offer expert advice on the various fees associated with business registration in Hong Kong. Our team is equipped with the latest information to help you understand exactly what you need to pay and why, ensuring no surprises.
- Transparent Pricing: At Sleek, we believe in transparency. We’ll provide you with a detailed breakdown of all expected costs, including government fees and our service charges so that you can budget effectively from the outset.
- Streamlined Process: We use a streamlined process to handle your business registration, saving you time and minimizing the hassle. Our online platform allows you to upload documents and track the progress of your application conveniently.
- Customized Solutions: We recognize that every business is unique. Our team offers tailored solutions to meet your specific needs, whether you’re a startup or an established enterprise looking to expand.
- Ongoing Support: Once your business is registered, our support doesn’t stop there. We provide ongoing administrative services to help you maintain compliance with local regulations, allowing you to focus on growing your business.
Let us handle the paperwork while you concentrate on what you do best—running your business. Contact us today to learn more about how we can help make your business registration in Hong Kong as seamless as possible.
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Key Takeaway:
To start a business in Hong Kong, you must register with the Inland Revenue Department and pay a business registration fee. This applies to almost all businesses except charitable organizations or those already registered under specific ordinances.
The standard one-year registration fee is HK$2,250. Branch offices have lower fees.
You can apply for your Business Registration Number (BRN) through easy, one-stop business registration services by submitting required government forms and payments.
If closing your business early after paying for a multi-year certificate, you may get a partial refund.
Conclusion
There you have it! The business registration fee or BR fee is not just a regulatory requirement; it’s an investment in your business’s legal foundation. Staying informed about the BR fee structure helps in budgeting accurately and ensures compliance with local regulations. Remember, timely payment of this fee is essential to avoid penalties and maintain good standing in the business community. By keeping abreast of any changes to the fee and related regulations, you can effectively manage your business finances and focus on growth and success.
FAQs in relation to BR fee for HK businesses
As a business owner in Hong Kong, you may have questions about the Business Registration (BR) fee. This fee is required for all businesses operating in the city, and it’s important to understand how it works. Here are some common questions and answers about the BR fee:
What is the BR fee?
The BR fee is an annual fee that all businesses in Hong Kong must pay to the Inland Revenue Department (IRD) via in-person at the business registration office or online services through the eTax account. The fee covers the costs of incorporation submission, maintaining the business registration system, and providing services to businesses.
How much is the BR fee?
The BR fee varies depending on the type of business and the length of the registration period. For most businesses, the fee is HK$2,000 per year. However, if you register your business for a 3-year period, the fee is reduced to HK$5,200.
When is the BR fee due?
The BR fee is due on the anniversary date of your business or branch registration. You’ll get a reminder from the IRD about a month before the due date.
What happens if I don't pay the BR fee?
If you don’t pay the BR fee on time, you may face penalties and interest charges. In some cases, your business registration may be canceled, which can have serious consequences for your business.
Can I claim the BR fee as a tax deduction?
Yes, the BR fee is a tax-deductible expense for businesses in Hong Kong. You can claim the fee as a deduction as you file tax return.
By understanding the BR fee and how it works, you can make sure your business stays compliant and avoids any unnecessary penalties or complications.
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