Hong Kong Company Setup 2024
Set up a company in Hong KongSetting up a company in Hong Kong can be difficult, especially if you don't know where to start. At Bestar, we offer company registration services that can help you register a company in Hong Kong for a fee of HK$7,600. |
Hong Kong is one of the most business-friendly cities in the world, thus attracting entrepreneurs and companies from around the world. With a favorable tax regime, a strategic location in Asia, and a highly skilled workforce, it makes sense that you would want to start a business in Hong Kong.
Why Set Up a Company in Hong Kong?
In addition to its vibrant culture, first-class infrastructure and high standard of living, Hong Kong is also known as one of the world's international trade and investment centres. It is also one of the countries with the freest economy in 2023.
Here are four reasons why setting up a company in Hong Kong can help your business thrive.
1. Easy and inexpensive to set up
Registering a company in Hong Kong is relatively quick and cost-effective. You can usually obtain a business registration certificate from the Hong Kong Companies Registrar within a few days, and the government company formation fees are reasonable and transparent.
Hong Kong offers a business-friendly environment with minimal bureaucratic restrictions; there are no minimum registered capital requirements, no local directors, and no restrictions on foreign investment.
2. Hong Kong provides a vibrant business environment
With over 360,000 SMEs, Hong Kong has become a dynamic center for start-up growth and development thanks to its adaptable and innovative environment. According to a report by the IMD World Competitiveness Center, Hong Kong ranks among the top ten countries in the world for economic competitiveness.
The Hong Kong government also supports innovation and technological development. In 2023, the government allocated HK$500 million to launch a digital transformation support pilot program to provide necessary digital solutions for small and medium-sized enterprises.
This is why many entrepreneurs use Hong Kong as a strategic springboard to expand their businesses in other parts of the region.
To find out more, speak to InvesHK, the government agency responsible for attracting and retaining foreign direct investment, which is strategically important to Hong Kong's economic development.
Register a company in Hong Kong One package, all included. Everything you need to run your business. DKD 7,600 (equivalent to USD975) |
3. Business-friendly taxes
Hong Kong has a two-tier profits tax for companies, with the first HK$6,000 of profits exempt. Registered companies pay an 8.25% tax on profits below HK$2 million and a 16.5% tax on any part of profits above HK$2 million. The tax system is one of the lowest in Asia and the world.
In addition, Hong Kong operates a territorial tax system, which means companies conducting business outside Hong Kong do not have to pay corporate tax.
4. No VAT or capital gains tax
Another significant benefit of setting up a company in Hong Kong is the absence of certain taxes common in other jurisdictions, such as value-added tax (VAT) or goods and services tax (GST). Profits from the sale of assets such as property or shares are also not subject to capital gains tax.
How to Set Up a Company in Hong Kong
There are ten steps to set up a company in Hong Kong:
Become familiar with local organizations and institutions
Choose your company name
Select your company’s legal entity
Appoint a company secretary
Select your company’s registered address
Prepare company formation documents
Submit to the Registrar of Companies
Pay government fees
Obtain relevant permits and licenses
Stay up to date with your tax and financial reporting
You can perform these steps yourself, or you can choose a more convenient route with an incorporation service, which can streamline the process and handle everything from document submission to regulatory compliance for you.
Let's look at each step in detail.
Step 1: Get familiar with local organizations and agencies
When setting up a company, there are two main government departments you need to deal with:
Companies Registry
The Companies Registry is the government's business registry and is responsible for registering companies in Hong Kong.
Its duties also include supervising companies to ensure their compliance with corporate laws and regulations following the Companies Ordinance.
Inland Revenue Department
The Inland Revenue Department (IRD) of Hong Kong is a government department responsible for the administration of taxes and duties.
You must file a company tax return with the tax office every year to determine how much tax your company needs to pay.
Step 2. Select your company name
The actual company registration process begins with choosing a name for your company. It can be in Chinese, English or both. However, the name cannot contain both English and Chinese characters.
If your company name is in English, it must end with "Limited." If your company is named in Chinese, it must use traditional characters and must end with "有限公司".
If you choose a name that is not registrable, the Registrar of Companies may reject your application. To avoid this, here are some helpful tips on naming your company.
Tip #1 – Check if the name can be found on the Hong Kong Companies Registry’s website. Alternatively, you can send the list to your company secretary for review.
Tip #2 – Make sure your company name is not trademarked in Hong Kong or elsewhere to avoid legal action. You can check whether your company name is free for use through the Intellectual Property Department's online search system.
Tip #3 – Protect your company name by registering it as a trademark with the Hong Kong Intellectual Property Department.
If you need more details about company name registration, check out the Company Registration guideline.
Step 3. Select your company’s legal entity
Now that you have a name for your company, the next step is to decide which legal entity is best for your business.
Choosing the right business structure is critical to new company formation as it affects your tax liability, flexibility in business operations and legal liability.
Business entities in Hong Kong are mainly divided into three categories:
Public and private limited companies
Sole proprietorship
Partnership
Of these options, a limited company is the most popular and common type of company structure in Hong Kong for a number of reasons.
First, this type of business provides shareholders with limited liability. This means that their financial exposure does not exceed the amount of their equity investment, thus protecting their personal assets from the company's financial obligations.
Secondly, the share structure of a private limited company is conducive to capital growth and expansion as it attracts external funding from investors.
At this point, in a limited company, transferring shares from one shareholder to another is a very simple process. This convenience makes it an attractive option for businesses that aim to expand and readily adjust their ownership structure to include new investors.
Step 4: Appoint company secretary
All Hong Kong companies are required to have a local company secretary.
It is mandatory to appoint a company secretary when registering a company as they are the direct point of contact for authorities enquiries, ensuring regulatory compliance and operational transparency.
Your company secretary will be responsible for ensuring that your company is in good standing with the regulations for registering and maintaining a company in Hong Kong. They also have other responsibilities, including filing annual returns, managing the company seal and helping with company reorganization.
Looking for a Company Secretary? With over 6,000 company secretaries in Hong Kong, it’s easy to make the wrong choice. Before deciding which company secretary is right for you, read their reviews. |
Who can act as your company secretary?
The company secretary can be a Hong Kong resident individual or a certified company. You can appoint your friend or family member, provided they are resident in Hong Kong and are familiar with the complex duties and responsibilities of a company secretary.
To ensure that your company complies with Hong Kong corporate laws and regulations, we recommend choosing a qualified company secretary with a TCSP license.
What does a company secretary do for your business?
Don’t underestimate how much time and hassle a company secretary can save you.
Services your company secretary can provide include:
Maintaining company records such as directors’ register, shareholder register, share certificates and significant controllers register
Organizing board and annual shareholder meetings, preparing agendas and recording minutes
Arranging your tax filing
Monitoring changes in the relevant legislative and regulatory environment and taking appropriate action
Step 5. Select your company’s registered address
Your company's registered address is the address to which government departments send correspondence.
It is common practice to use the company secretary's address as your registered address and it is recommended that you ensure that all official communications and legal documents are received, especially if you do not have a physical office in Hong Kong.
If you change your office address, be sure to complete the NR1 form and notify the relevant authorities to avoid losing important correspondence.
Step 6: Prepare incorporation documents
Unlike many countries, the incorporation process in Hong Kong does not require extensive documentation.
The following are the documents required for company registration:
Forms NNC1 and IRBR1 for companies limited by shares. The incorporation form must be completed and signed by one of the shareholders.
Copies of identification documents of directors and shareholders (Hong Kong identity card for Hong Kong residents and passport for foreigners).
A copy of the company's articles of association outlining the company's internal governance rules, such as director appointments, share transfers and financial management. The company secretary will usually provide this document.
Step 7. Submit to the Companies Registry
Registering your company with the Hong Kong Companies Registry is a simple process.
You can submit your incorporation documents in one of the following ways:
Submit via e-Services Portal
By post to the address of the Companies Registry, 14th Floor, Queensway Government Offices, or
Go in person to the payment counter at the Companies Registry.
Within 2 to 6 working days after submission, the Companies Registry will issue two documents proving the establishment of your company: a Certificate of Incorporation and a Business Registration Certificate.
Both certificates can be collected in person at the Companies Registry or electronically.
Remember, the Certificate of Incorporation is only issued once when your company is incorporated and remains valid throughout the life of the company.
On the other hand, a Business Registration Certificate is only valid for one or three years. It must be renewed annually within one month of the anniversary of the company's incorporation (failure to do so will result in a penalty).
Step 8. Pay government fees
You will need to pay applicable government fees when you submit your company registration documents to the Companies Registry.
The following are the incorporation fees for Hong Kong private limited companies. For other related service fees, please refer to the official website of the Companies Registry.
Types of Fee | Amount |
Apply online through the e-portal | HKD 1,545 |
Application with paper documents | HKD 1,720 |
Fees and levies for one-year business registration certificate | HKD 2,150 |
Fees and levies for three-year business registration certificate | HKD 5,650 |
If the application is unsuccessful, the Companies Registry will refund approximately 80% of the application fee.
Step 9. Obtain relevant permits and licenses (if necessary)
Generally, you do not need a permit or license to start a business in most industries in Hong Kong.
However, certain types of businesses need to apply for licenses and permits, such as restaurant licenses, liquor licenses, money services operator licenses, and import and export licenses.
For example, if you want to open a restaurant, you must obtain a General Restaurant License, a Provisional General Restaurant License and a Liquor License from the Food and Environmental Hygiene Department.
You can visit the Trade and Industry Department website to find out what licenses, permits, certificates and approvals are required for certain businesses.
Step 10: Stay up to date on your tax and financial reporting
When a company is incorporated, the Companies Registry will automatically report your company's existence to the IRD.
However, it is your responsibility to keep abreast of your financial reports. Typically, your company secretary should handle your reports and tax notices and communicate with you on this matter, depending on the level of service provided by your company secretary.
For more information and updates on Hong Kong’s tax rules and regulations, you can check the Hong Kong government’s website.
The Easiest Way to Set Up a Company in Hong Kong
If you are setting up a company in Hong Kong for the first time, the process can be tedious. That’s why Bestar offers Hong Kong company registration services to make registration simple for individuals or businesses. When you set up or register a Hong Kong company with us, you will get the following:
Pre-Company Registration Services | Post-Company Registration Services | |
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Hong Kong Company Setup 2024
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