Create a company in Hong Kong to access one of Asia’s most dynamic business environments.
With its strategic location, world-class infrastructure, and business-friendly policies, Hong Kong is an ideal place to start your entrepreneurial journey.
This guide will walk you through the essential steps to set-up a business in Hong Kong, ensuring you make informed decisions at every stage. Whether you’re a seasoned entrepreneur or new to the business world, understanding the process of setting up a company is crucial. From selecting the right company name to understanding the legal requirements, we’ll cover all you need to know.
By the end, you’ll be well-prepared to create a company that thrives in Hong Kong’s vibrant market. Stay with us as we explore the path to your business success and set the foundation for a prosperous future in this thriving metropolis.
How to create a company in Hong Kong
Setting up a company in Hong Kong can be a straightforward process. The Companies Ordinance and Companies Registry provide a clear framework and company formation platform.
Whether you’re aiming for local operations or international expansion, incorporating your business in Hong Kong offers numerous benefits. Here’s a step-by-step guide to help you navigate the process:
Step 1: Choose a company name
When choosing a company name in Hong Kong, it’s important to ensure that the name is not already in use by another company and is not offensive or misleading. To check the availability of the desired name, you can conduct a company name search through the Companies Registry’s Cyber Search Centre.
Step 2: Appoint a company secretary
Every Hong Kong company must appoint a secretary within 6 months of incorporation. The company secretary can be an individual or a corporate body, but they must be a resident of Hong Kong. The role of the company secretary is to ensure that the company complies with statutory requirements and maintains proper records.
Step 3: Prepare incorporation documents
Starting a company in Hong Kong requires important paperwork, such as the Incorporation Form (NNC1), Articles of Association, and Notice to Business Registration Office (IRBR1). These forms detail how your company will be organised and run. Consider hiring experts like our incorporation team at Sleek who know what they’re doing to get it right.
Step 4: Register with the Companies Registry
Once the incorporation documents are ready, they must be submitted to the Companies Registry for registration. This can be done online through the e-services portal or in person at the Companies Registry office. The registration process typically takes about 4 working days, after which the Certificate of Incorporation will be issued.
Step 5: Obtain business registration certificate
After incorporating the company, obtaining a Business Registration Certificate from the Inland Revenue Department is necessary. This certificate is required for all businesses operating in Hong Kong, regardless of size or nature. The application for the Business Registration Certificate can be made online or in person, and the certificate is usually issued within 2 working days.
Understanding the types of companies in Hong Kong
When you’re setting up a company in Hong Kong, it’s also crucial to know the types of companies that best suit your venture. Here are the main types of companies in Hong Kong:
1) Sole proprietorship
Ideal for small businesses or individual entrepreneurs, a sole proprietorship is easy to set up with minimal regulatory requirements. However, the owner has unlimited liability for the business’s debts.
2) Partnership
This type involves two or more individuals running a business together. Partnerships can be general or limited, with the latter offering limited liability to some partners. It’s a flexible option for collaborative ventures.
3) Private Limited Company (PLtd)
In Hong Kong, the private limited company is a popular choice for many businesses. The company limited business structure creates a separate legal entity, which means that shareholders and directors have limited liability protection. Up to 50 shareholders are allowed, and share transfers are restricted. It’s ideal for small to medium-sized enterprises.
4) Public Limited Company (PLC)
A public limited company, also known as a listed company, can offer shares to the public and be listed on a stock exchange. There is no limit on the number of shareholders for a public limited company. However, this type of company is subject to more stringent regulatory requirements and must disclose financial information to the public.
5) Branch office
A branch office is an extension of a non-Hong Kong company operating in Hong Kong. It is not a separate legal entity and is considered part of the parent company. The parent company is responsible for all liabilities and obligations of the branch office. A branch office can be a good option for foreign companies looking to establish a presence in Hong Kong without creating a separate legal entity.
6) Representative office
A representative office is a low-cost option for foreign companies exploring business opportunities in Hong Kong. Representative offices cannot engage in profit-generating activities and are limited to conducting market research, promoting the parent company, and coordinating business activities. Setting up a representative office is relatively simple but does not provide the same benefits as a branch office or a limited liability company.
Requirements for setting up a company in Hong Kong
To create a company in Hong Kong is straightforward, but certain requirements must be met. These include having a registered address, share capital, directors, and a company secretary.
👌🏻 Pro tip: Be meticulous. During the company formation it’s crucial to meet all the requirements. If you miss any step, your application could be delayed or even rejected.
Step 1: Registered office address
You must have a registered office address to create a company in Hong Kong. This physical address serves as the official registered company address where to deliver documents, for receiving government and legal correspondence. The registered office address can be different from the company’s business address, which can be a virtual or serviced office. PO box addresses are not accepted as registered office addresses.
Step 2: Share capital
There is no minimum share capital requirement to create a company in Hong Kong. However, having a share capital of at least HKD 1,000 is common practice to demonstrate the company’s financial stability. The share capital can be denominated in any currency and can be increased or decreased after incorporation or company registration .
Step 3: Directors
A Hong Kong company must have at least one director who is a natural person. There is no requirement for directors to be residents of Hong Kong, but it’s recommended to have at least one director who is familiar with Hong Kong’s business environment. Directors are responsible for managing the company’s affairs and ensuring compliance with legal requirements.
Step 4: Company secretary
As mentioned earlier, to create a company, every Hong Kong company must appoint a company secretary within 6 months of incorporation. The company secretary plays a crucial role in ensuring the company’s compliance with statutory requirements and maintaining proper records. If the company secretary is an individual, they must be a resident of Hong Kong. If the company secretary is a corporate body, it must have a registered office or place of business in Hong Kong.
Process on how to create a company in Hong Kong
You can ensure a smooth setup by selecting the right company name and preparing the necessary documents. Follow these steps to officially establish your business and take advantage of Hong Kong’s dynamic market.
1. Submit incorporation form
The first step in to create a company in Hong Kong is to submit the Incorporation Form (NNC1) to the Companies Registry. This form contains information about the company, including its name, registered office address, share capital, and directors. The form can be submitted as an online application through the e-Registry portal or in person at the Companies Registry office.
2. Pay company registration fees
After submitting the Incorporation Form, the registration fees must be paid. The fees vary depending on the company formation type and the business registration commencement date. For new businesses, the start date for the first registration certificate is when the business begins operation, not the application to create a company.
Here’s a table of the range of fees set for new businesses registering from April 2024 to March 2025:
3. Obtain business registration certificate
Once the company is successfully registered with the Companies Registry, the next step is to obtain a Business Registration Certificate from the Inland Revenue Department.
Key Takeaway:
Starting a company in Hong Kong involves picking a unique name, appointing a local secretary, and submitting incorporation documents. Make sure to get your Business Registration Certificate from the Inland Revenue Department within 2 days of registration.
Post-incorporation requirements for Hong Kong companies
The initial post Hong Kong company formation task is filing your annual return with the Companies Registry. This is a mandatory annual requirement for all Hong Kong companies and is due within 42 days of your company’s incorporation anniversary.
The annual return summarizes your company’s vital information, including:
- Registered office Hong Kong address
- Share capital
- Directors
It is submitted via Form NAR1, which is accompanied by the prescribed fee. Timely filing is crucial, as failure to do so can result in significant fines and potential legal repercussions for both the company and its directors.
After the annual return, the next step is registering your company for taxes with the Inland Revenue Department. This includes company registration for Profits Tax, levied on assessable profits at 8.25% on the first HKD 2 million and 16.5% on any amount exceeding that, as outlined in the department’s tax rate and levy table.
Additional applicable taxes, such as employer’s return for employee salaries tax, must also be registered. The tax registration process can be conveniently completed online through the Inland Revenue Department’s website. It is advisable to finalize this promptly to avoid penalties or interest charges.
For companies with employees in Hong Kong, the annual submission of Form IR56B to the Inland Revenue Department is required. This form details employee salaries, allowances, and benefits for calculating individual salaries tax. The deadline for filing the employer’s return is typically within one month after the end of the tax year, which spans from April 1st to March 31st. Non-compliance can lead to penalties and legal consequences, therefore, it is important to maintain organized employee records and adhere to the filing deadline.
Opening a bank account for your Hong Kong company
After registering your Hong Kong company, the next important step is opening a corporate bank account. This will help you manage finances smoothly and handle payments to suppliers and employees. However, opening a corporate bank account in Hong Kong can be a bit tedious, with different banks having their own requirements and procedures.
Before you start the bank account opening process, ensure you have all the necessary documents. This typically includes your company’s Certificate of Incorporation, Business Registration Certificate, and Articles of Association, as well as identification documents and proof of address for your company’s directors and signatories.
Remember that each bank may have slightly different requirements, so it’s always a good idea to check with them directly to ensure you have everything you need. And if you’re using a virtual or serviced office as your registered address, make sure you have proof of that arrangement as well.
Hong Kong’s banking scene is pretty solid, offering a variety of choices for corporate accounts. You can go with local banks like HSBC and Bank of China or opt for international names such as Standard Chartered and Citibank. When picking the right bank for your business, consider its reputation, the fees it charges, how good its online banking is, and what services it provides.
If you handle many international transactions, consider a multi-currency account. Certain banks have more experience with specific industries and may offer special benefits that can help your company grow.
Once you’ve chosen your bank and gathered all the necessary documents, it’s time to start the application process. This typically involves filling out an application form and submitting it with your supporting documents.
Some banks may require a minimum initial deposit to open your account, ranging from a few thousand to several hundred thousand Hong Kong dollars. Depending on the bank and your company’s specific circumstances, the account opening process can take anywhere from a few days to several weeks.
Issuing invoices, receiving payments, and paying taxes
One of the first things you’ll need to do when you start trading is to issue invoices to your customers. Your invoices should include all the key details of the transaction, including your company name and registration number, the customer’s details, a description of the goods or services provided, and the amount due.
In Hong Kong, it’s common to issue invoices in either English or Chinese, or both after company formation and beyond. If you’re dealing with international customers, you may need to include additional information like your company’s SWIFT code or bank account details for overseas payments.
Once you’ve issued your invoices, the next step is to receive payment from your customers. In Hong Kong, several payment methods exist, from bank transfers and checks to online payment platforms like PayPal or Stripe.
It’s a good idea to provide clear payment instructions on your invoices and follow up promptly with any customers late in settling their accounts. Hong Kong has a robust legal system that can help with debt collection if needed. Still, it’s always better to maintain good relationships with your customers and resolve any issues amicably first.
As a Hong Kong company, you must stay on top of your tax obligations to avoid penalties or legal issues. This includes filing your Profits Tax return each year, paying any tax due, and submitting your employer’s return and any other applicable filings.
Working with a qualified tax professional in Hong Kong can make managing your taxes much easier as you create a company. It can help you stay compliant and spot any deductions or incentives that could benefit your company.
One thing to remember as you create a company: Hong Kong has a territorial tax system, which means that only profits sourced in Hong Kong are subject to tax. If your company is engaged in export operations or other offshore activities, you may be able to claim an exemption or reduced tax rate on those profits. Again, a tax professional can help you determine what applies to your specific situation.
Key Takeaway:
After registering your Hong Kong company, stay compliant by filing annual returns, registering for taxes, and submitting employer’s returns. Open a corporate bank account with the right documents to manage finances effectively. Stay on top of invoicing and tax obligations to avoid penalties and ensure smooth operations.
Conclusion
To create a company in Hong Kong offers significant benefits, including a favorable tax regime, strategic location, and a robust legal framework. By following the step-by-step guide, you can navigate the necessary requirements, from choosing a company name and structure to registering with the Companies Registry and opening a bank account.
Ensuring compliance with local regulations and understanding the financial obligations will set a strong foundation for your business. With the right preparation and resources, company incorporation in Hong Kong can be a rewarding venture that opens doors to a dynamic and thriving market.
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