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Setting up a business in Hong Kong

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Hong Kong’s commercial success beckons investors, entrepreneurs and creative thinkers form all over the world. In order to fully tap into the city’s business opportunities, you will need to establish a Hong Kong company. What's more, if you plan to do business with mainland China, having a Hong Kong company is a great gateway into China’s large market thanks to the CEPA (Closer Economic Partnership Agreement).

By investing in Hong Kong, you can benefit from a stable social and political environment, more financial freedom, a lower corporate tax rate compared to other special administrative regions (17.5% on profits), as well as quicker and more effective performance. Moreover, procedures regarding the setting up and closing down of a business are simple, quick and cheap.

What’s more, there is no minimum capital requirement in order to set up a business in Hong Kong, and a single stakeholder is enough. Finally, the company can be registered online, which is also rather encouraging and time-saving.

Types of companies

There are several types of businesses that can be set up in Hong Kong.

The Sole Proprietorship consists of a single person who is liable to the company's debts and personal property. As the name suggests, it’s best suited for small enterprises with one owner.

The Private Limited Company is the most widespread options among foreign businessmen. To set up a limited company you will need at least one director (up to 50 shareholders), a company’s secretary, an office in Hong Kong and starting capital.

Note that there is no legally specified amount for starting capital — however, it is generally recommended that you have at least HKD$10,000 in the bank.

Other options include the Unlimited Company (you will need at least two partners with unlimited and combined liabilities) and the Public Limited Company (can have many partners whose liabilities are limited to their amount of contribution).

The General Partnership is authorised to have between 2 and 20 partners whose responsibilities are unlimited regarding the company's debts and bonds. You will also be responsible for your partner’s actions.

The Limited Partnership allows as many partners as in the case of the General Partnership. However, at least one partner is entitled to have unlimited liabilities while others' responsibilities are limited to their amount of contribution.

 Good to know:

You can run your Hong Kong company from anywhere in the world. You will just need to hire an agency to provide you with a secretary and a registered office in Hong Kong and pay the fees of around HKD$6,000 annually.

Naming and registering the company

First of all, you are required to choose a name for your company. Note that this step can be performed online. You just have to request for a name from the Companies Registry. Once you have received the approval of the Registry, an incorporation certificate will be issued.

Documents to be produced are the following:

  • A copy of the company's statutes;
  • A copy of the IRBR1 (Notice to Business Registration Office) or a variant according to the type of company to be set up.

When filling the formalities online, you will be able to download the company's incorporation certificate and registration certificate within the same day. Fees of around HKD 4,000 apply.

Registering at the Labour Department and the MPFA

Once registered, all companies who intend to recruit workers are answerable to the Employment Ordinance regarding wages. Therefore, you are required to subscribe to an insurance, both for your part-time and full-time employees. This insurance should provide coverage in case of fatal occupational accidents or related injury, handicap, disease, etc..

Moreover, all 18 to 65 years old employees having been hired for more than 60 days have to be registered with the Mandatory Provident Fund scheme (MPF).

As the founder, you also have to register the company with the Labour Department and the Mandatory Provident Fund Schemes Authority (MPFA). Specialised agencies can provide assistance with these formalities. You can even request for help from banks to register with the MPF scheme.

Company stamp

Finally, you are required to order a company stamp, which will be required during administrative formalities. Fees of HKD 215 apply.

 Useful links:

Companies Registry
Companies Registry – Booking the company's name
Companies Registry – Forms (as from No. 26, depending on the type of company)
Labor Department – Employment ordinance
Mandatory Provident Fund Schemes Authority – MPFA

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.
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