Entrepreneur’s Starter Pack 2023: Exploring the Process and Tricks of Company Formation in Hong Kong
10 minute read
Are you an entrepreneur looking to establish a company in the bustling metropolis of Hong Kong? If yes, then you are at the right place, because this comprehensive guide is going to be your roadmap, and Sleek can help you achieve triumph in your entrepreneurial journey!
Congratulations, small business owner! You’ve set your sights on starting a business in the vibrant city of Hong Kong, a preferred destination for entrepreneurs worldwide. Here, we will take you through the incorporation process and tricks of company formation in Hong Kong. From understanding why Hong Kong is an entrepreneur’s haven to navigating the registration requirements and compliance obligations, we’ve got you covered with all the incorporation tips. So, fasten your seatbelt, embrace your entrepreneurial spirit, and let’s embark on this exciting journey together with Sleek!
Overview:
- Hong Kong – A Preferred Destination for Entrepreneurs
- Company Formation – What Do Most Entrepreneurs Register as?
- Basic Checklist – What Do You Need to Register a Company in Hong Kong?
- Pre-Incorporation Steps to Follow
- Visas and Permits
- Tax Policies
- Insurance
- Employment Laws
- Financial Regulations
- Conclusion
- FAQs
Hong Kong – A Preferred Destination for Entrepreneurs
Hong Kong holds a special place for entrepreneurs, and here’s why it’s a preferred destination for many:
- Strategic Location: Nestled in the heart of Asia, Hong Kong serves as a gateway to Mainland China and other international markets. Its proximity to global business hubs and access to a vast network of suppliers and customers make it an ideal launchpad for your entrepreneurial ventures.
- Business-Friendly Environment: Hong Kong offers a dynamic and business-friendly environment, with a robust legal framework, well-established financial infrastructure, and a low-tax regime. The city’s commitment to free trade, intellectual property protection, and ease of doing business further enhances its appeal.
- Access to Capital: Hong Kong boasts of a vibrant investment landscape, with a plethora of venture capital firms, angel investors, and crowdfunding platforms. The city’s robust financial sector and investor-friendly ecosystem provide ample opportunities for raising capital and fuelling business growth.
Company Formation – What Do Most Entrepreneurs Register as?
When it comes to company formation, many entrepreneurs in Hong Kong opt for a limited liability company (LLC). A limited liability company provides a separate legal entity, shielding your personal assets from business liabilities. It offers flexibility, ease of ownership transfer, and credibility in the eyes of potential clients and partners. Register your company today at https://sleek.com/hk/incorporation/.
Basic Checklist – What Do You Need to Register a Company in Hong Kong?
If you are a local entrepreneur, here’s a basic checklist of what you’ll need:
- Company Name: Choose a unique name for your company, ensuring it complies with the guidelines set by the Companies Registry.
- Registered Office Address: Provide a local registered office address in Hong Kong. This will serve as the official correspondence address for your company.
- Directors and Shareholders: Appoint at least one director and one shareholder. The director can be an individual of any nationality, and the shareholder can be an individual or a corporate entity.
- Company Secretary: Appoint a company secretary who can be a natural person residing in Hong Kong or a corporate entity registered in Hong Kong.
- Memorandum and Articles of Association: Prepare the memorandum and articles of association, which outline the company’s structure, internal regulations, and distribution of powers.
However, if you are a foreign entrepreneur looking to establish a company in Hong Kong, then here’s what you will need:
- Local Representative: You will need to appoint a local representative who is either a Hong Kong resident or a Hong Kong-incorporated company. This representative will serve as a point of contact for legal and administrative matters. Sleek can help you with a hassle-free process.
- Registered Office Address: Provide a local registered office address in Hong Kong. This will serve as the official correspondence address for your company.
- Company Secretary: Just like local entrepreneurs, you will need to appoint a company secretary who can be a natural person residing in Hong Kong or a corporate entity registered in Hong Kong.
- Directors and Shareholders: Similar to local requirements, you will need to appoint at least one director and one shareholder. The director can be of any nationality, and the shareholder can be an individual or a corporate entity.
- Memorandum and Articles of Association: Prepare the memorandum and articles of association, which outline the company’s structure, internal regulations, and distribution of powers with the help of Sleek’s specialised services.
You can submit all the required forms along with your application through e-registry to the Hong Kong Companies Registry and Business Registration Office.
Pre-Incorporation Steps to Follow
Before you dive headfirst into company formation, it’s essential to follow some pre-incorporation steps to set a solid foundation:
- Conduct market research
- Develop a business plan
- Secure financing
- Seek professional advice
Talk to our friendly experts today about how Sleek can simplify your business
Visas and Permits
Obtaining the right visa or permit is crucial for you and your employees. Here are some key considerations:
- Employment Visa: If you plan to work in your own company or hire foreign employees, an employment visa is required. It enables you to live and work in Hong Kong and can be obtained through the Hong Kong Immigration Department.
Get an in-depth understanding of the various statistics on employment visas at https://www.immd.gov.hk/eng/facts/visa-control.html.
- Investment Visa: If you plan to invest a substantial amount in a Hong Kong business, you may be eligible for an investment visa. This visa is suitable for entrepreneurs looking to start or acquire a business in the city.
Learn more about investment visas here.
- Dependent Visa: If you hold a valid employment or investment visa, your spouse and children may be eligible for a dependent visa, allowing them to reside in Hong Kong with you.
You can check further details about obtaining a dependent visa in Hong Kong here.
Business Registration: Once your company is incorporated, you need to register your business with the Business Registration Office and obtain a Business Registration Certificate.
Tax Policies
Navigating the tax landscape is vital for small business owners in Hong Kong. Here’s what you need to know:
- Profit Tax: Hong Kong has a territorial tax system, meaning only profits derived from Hong Kong are subject to taxation. The current corporate tax rate is 8.25% on assessable profits up to $2,000,000, and 16.5% on any part of assessable profits over $2,000,000.
- Tax Filing: As a business owner, you are required to file an annual tax return with the Inland Revenue Department. Keep accurate records, claim eligible deductions, and ensure timely filing to avoid penalties.
- Goods and Services Tax (GST): Hong Kong does not impose a GST or value-added tax (VAT) on most goods and services. However, be aware of any specific tax obligations related to your industry.
- Double Taxation Agreements: Hong Kong has entered into double taxation agreements with various countries to avoid the double taxation of income. Familiarize yourself with the agreements that apply to your business activities.
Insurance
Protecting your business with the right insurance coverage is essential. Consider the following policies:
- Property Insurance
- Liability Insurance
- Employee Insurance
Employment Laws
When hiring employees in Hong Kong, it’s crucial to understand employment laws and regulations. Here are some key points to consider:
- Employment Contracts: Provide written employment contracts to your employees, outlining the terms and conditions of their employment, including working hours, leave entitlements and termination procedures.
- Minimum Wage: Hong Kong has a statutory minimum wage, which is periodically reviewed and adjusted. Ensure compliance with the prevailing minimum wage requirements. From 1 May 2023, the statutory minimum wage is HKD 40 per hour.
- Employee Benefits: Familiarize yourself with the requirements for employee benefits, such as paid annual leave, sick leave, maternity leave, and the Mandatory Provident Fund (MPF) scheme for retirement savings.
- Non-Discrimination: Adhere to anti-discrimination laws that protect employees from unfair treatment based on factors such as gender, age, disability, race, and nationality.
Termination and Severance: Understand the legal obligations regarding termination and severance payments. Seek legal advice to ensure compliance with the Employment Ordinance.
Financial Regulations
As a business owner, it’s important to adhere to financial regulations to maintain transparency and compliance. Consider the following:
- Bookkeeping and Accounting: Maintain accurate financial records, including income statements, balance sheets, and cash flow statements. Engage a professional accountant or accounting firm to handle your financial matters.
Check out the hassle-free services provided by Sleek here.
- Auditing Requirements: Depending on the size and nature of your business, you may be required to have your financial statements audited annually by a certified public accountant.
Sleek provides seamless auditing services, check them out here.
- Annual General Meeting: Hold an annual general meeting to update shareholders on the company’s financial performance, discuss key matters, and approve financial statements.
Money Laundering and Terrorist Financing Prevention: Comply with regulations aimed at preventing money laundering and terrorist financing. Implement appropriate measures and procedures to ensure compliance with the Anti-Money Laundering and Counter-Terrorist Financing Ordinance.
Conclusion
Hey, small business owner! You’ve now uncovered the company incorporation procedure in Hong Kong and its essential processes and tricks. From understanding the benefits of Hong Kong’s business landscape to navigating registration requirements, visas, taxes, and compliance obligations, you’re well-equipped to embark on this entrepreneurial adventure.
May your business voyage be filled with success, growth, and fulfillment.
Visit https://sleek.com/hk/incorporation/ now and discover how Sleek can guide you through the seamless company incorporation journey. Start building your business empire today!
Bon voyage!
FAQs
Yes, it’s mandatory to have a physical office space in Hong Kong. Sleek can help you register a company here.
Most of the service providers will charge you for each step of the registration service. However, Sleek charges only HKD 2,000 all services included. Find further details at https://sleek.com/hk/incorporation/
Yes, you can apply for a Hong Kong visa without having a job offer.
Yes, Hong Kong offers several tax incentives and advantages for small businesses. You can read more about them here.
You will have to renew your business registration annually unless it is a certificate for 3 years. Find more details at https://sleek.com/hk/incorporation/.
