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Establishing a Factoring Company in Hong Kong

Updated: Jun 27



Establishing a Factoring Company in Hong Kong


Hong Kong boasts a strong financial services sector, making it a viable location to establish a factoring company. Here's a general roadmap to get you started:


1. Research and Business Planning:


  • Understand the Hong Kong factoring market - research existing players, identify your target clientele, and tailor your factoring services accordingly.

  • Familiarize yourself with the legal framework governing factoring - "Law Amendment and Reform (Consolidation) Ordinance (Cap. 23)" for regulations on debt assignment.

  • Develop a robust business plan - outline your factoring model (recourse vs. non-recourse), fee structure, risk management strategies, and target funding sources.


2. Company Registration:


  • Choose a suitable business structure - consider a limited liability company for its advantages in capital raising and shareholder protection.

  • Register your company with the Companies Registry of Hong Kong.

  • Obtain a Business Registration Certificate.


3. Licensing and Regulatory Requirements:


  • As a financial services provider, you may require a Money Lender's License from the Hong Kong Monetary Authority (HKMA) depending on your specific factoring model.


4. Operational Setup:


  • Open a corporate bank account for your factoring business.

  • Secure office space and set up IT infrastructure to manage client data and transactions securely.

  • Assemble a team with expertise in factoring, credit analysis, and risk management.


Additional Resources:



How Bestar can Help


Bestar can provide valuable assistance throughout the process of establishing a factoring company in Hong Kong:


  • Assist with company registration and ensure compliance with all legal requirements, including licensing under the Money Lender's Ordinance if applicable.

  • Draft and review contracts with clients and suppliers, ensuring they protect your business interests.

  • Develop a sound financial plan for your factoring business, including projections and budgeting.

  • Establish a robust accounting system to track receivables, fees, and other financial activities.

  • Advise on tax implications for your factoring business and ensure compliance with Hong Kong tax regulations.

  • Secure funding for your factoring company, if necessary.







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