Setting Up a Property Management Company (PMC) in Hong Kong
- a22162
- Jul 31
- 12 min read
Updated: Aug 3
Hong Kong Property Management Company Setup
Property Management Company (PMC)
A Property Management Company (PMC) is a third-party organization that is hired by property owners to handle the day-to-day operations, maintenance, and oversight of their real estate investments. Essentially, they act as the landlord's representative, taking on most of the responsibilities that would otherwise fall to the owner.
PMCs manage various types of properties, including:
Residential properties: Single-family homes, apartments, condominiums, multi-family buildings, vacation rentals.
Commercial properties: Office buildings, retail spaces, shopping centers, hotels, industrial parks.
Special-purpose properties: Theaters, sports arenas, senior care facilities, schools.
Key Functions and Responsibilities of a Property Management Company:
The specific services offered by a PMC can vary depending on the agreement with the owner and the type of property, but generally include:
Tenant Management:
Marketing and Advertising: Creating listings, showing properties to prospective tenants, and utilizing various platforms to attract qualified renters.
Tenant Screening: Conducting thorough background checks, credit checks, employment verification, and reference checks to find reliable and trustworthy tenants.
Lease Agreements: Drafting, signing, and renewing lease agreements, ensuring they comply with legal requirements and protect the owner's interests.
Rent Collection: Setting up efficient systems for collecting rent, tracking payments, and following up on late or missed payments.
Tenant Communication: Being the primary point of contact for tenants, addressing inquiries, complaints, and requests in a timely and professional manner.
Evictions and Disputes: Handling legal matters related to tenant disputes, lease violations, and eviction processes if necessary.
Property Maintenance and Operations:
Routine Maintenance and Repairs: Coordinating and overseeing all aspects of property maintenance, from routine inspections and preventative maintenance to addressing emergency repairs promptly. This often involves a network of trusted contractors.
Property Inspections: Conducting regular inspections to ensure the property is well-maintained, identify potential issues early, and ensure tenant compliance with lease terms.
Property Upkeep: Managing landscaping, cleaning of common areas, waste removal, and ensuring overall curb appeal.
Emergency Response: Providing a 24/7 contact for emergency maintenance issues.
Tenant Turnover: Managing the move-in and move-out processes, including inspections, security deposit reconciliation, and preparing the property for new tenants.
Financial Management:
Rent Collection and Accounting: Collecting rent, security deposits, and other fees, and maintaining accurate financial records.
Expense Management: Paying property-related expenses (e.g., utilities, insurance, property taxes, maintenance bills) on behalf of the owner.
Financial Reporting: Providing owners with regular financial statements, income/expense reports, and assistance with tax preparation.
Budgeting: Helping owners set and adhere to budgets for property maintenance and operations.
Legal and Regulatory Compliance:
Compliance with Laws: Ensuring the property and all operations comply with local, state, and national landlord-tenant laws, housing regulations, building codes, and health and safety standards.
Insurance: Assisting owners with obtaining and maintaining appropriate property insurance.
Why Property Owners Hire PMCs:
Time Savings: Frees up the owner's time from day-to-day management tasks.
Reduced Stress: Handles tenant issues, maintenance emergencies, and legal complexities.
Expertise: PMCs have in-depth knowledge of landlord-tenant laws, market conditions, and maintenance best practices.
Better Tenant Quality: Professional screening processes can lead to more reliable tenants.
Lower Vacancy Rates: Effective marketing and tenant retention strategies help keep properties occupied.
Optimized Rent Rates: Market analysis helps set competitive and profitable rental prices.
Cost Savings: Access to a network of contractors can often lead to better rates for repairs and maintenance.
Distance Management: Ideal for owners who live far from their investment properties.
In essence, a Property Management Company serves as a comprehensive solution for property owners who want to maximize their investment returns without the burden of hands-on management.
Setting Up a Property Management Company (PMC) in Hong Kong
Setting up a property management company (PMC) in Hong Kong involves several key steps, including company registration and obtaining the necessary licenses. Hong Kong has a clear regulatory framework for property management services.
Here's a breakdown of the process:
1. Business Structure and Company Registration
Choose a Business Structure: The most common choice for a PMC is a Limited Liability Company (LLC) as it offers limited liability protection. Other options like sole proprietorship or partnership are also available but come with personal liability.
Company Name: Choose a unique company name. Hong Kong regulations allow for an English name, a Chinese name, or both. A combination of English words/letters and Chinese characters is not permitted.
Companies Registry Registration:
Prepare necessary documents: Memorandum of Association (outlines company objectives, registered office, shares), Articles of Association (governs internal operations and shareholder rights), Form 1A (company registration form), and proof of identity and address for directors and shareholders.
Submit documents and pay the registration fee to the Companies Registry. This process can be quick, sometimes even within an hour for online submissions.
Business Registration Certificate: After company incorporation, you need to obtain a Business Registration Certificate from the Inland Revenue Department (IRD). This is mandatory for all businesses in Hong Kong.
The standard fee for the Business Registration Certificate is HKD 2,000, along with a levy of HKD 250 for the Protection of Wages on Insolvency Fund.
This certificate needs to be renewed annually.
Corporate Bank Account: Open a corporate bank account with a reputable bank in Hong Kong, providing the necessary company documents.
2. Licensing Requirements for Property Management
The Property Management Services Authority (PMSA) regulates property management companies and practitioners in Hong Kong. The licensing regime for PMCs and property management practitioners (PMPs) came into operation on August 1, 2020.
Property Management Company (PMC) Licence:
A PMC is required to hold a license if it provides more than one category of property management services.
Criterion 1: The PMC must engage at least one licensed Property Management Practitioner (PMP) (Tier 1) who has effective control of the services.
Criterion 2: The PMC must engage a number of full-time licensed PMPs that meet minimum manning ratios:
At least one licensed PMP (Tier 1) for every 3,000 flats or below.
At least one licensed PMP (Tier 2) for every 1,500 flats or below. (A PMC can choose to engage an equal number of PMP (Tier 1) instead of PMP (Tier 2) to fulfill this ratio).
Ongoing Compliance: A licensed PMC must comply with prescribed conditions, including being a suitable person, meeting license criteria, displaying the license copy, appointing a licensed PMP (Tier 1) for each property managed, and clearly stating the company name and license number on all official documents and advertisements.
Notification of Changes: Licensees must notify the PMSA in writing within 31 days of any change in prescribed matters (e.g., changes in PMPs engaged/terminated, director appointments/terminations).
Property Management Practitioner (PMP) Licence (Individual):
A PMP is required to hold a license if appointed by a licensed PMC and assumes a managerial or supervisory role in the property management services provided.
There are two tiers of PMP licenses: Tier 1 and Tier 2, with different academic, professional, and experience requirements.
PMP (Tier 1) Licence Fee: HK3,700(includes HK100 application fee & HK$3,600 3-year licence fee).
PMP (Tier 2) Licence Fee: HK1,300(includes HK100 application fee & HK$1,200 3-year licence fee).
3. Other Important Considerations
Professional Indemnity Insurance: It's essential to have appropriate insurance coverage for your business, including professional indemnity insurance.
Staffing: Recruit qualified professionals with relevant experience and ensure all staff members who need one hold the appropriate licenses.
Record Keeping: Maintain detailed records of all property management transactions.
Compliance: Adhere to Hong Kong's tax laws, labor regulations, and environmental standards. The real estate industry in Hong Kong is heavily regulated.
Marketing and Sales: Develop effective marketing strategies to attract clients.
Continuous Professional Development (CPD): Licensees need to complete required CPD courses to maintain their licenses.
Costs of Setting Up
The cost of setting up a PMC in Hong Kong can vary depending on whether you engage professional services for incorporation.
Company Incorporation Fees:
Government Fee - Certificate of Incorporation (CI): HK$1,720
Government Fee - Business Registration Certificate (BR): HK$2,200 (for one year)
Service fees for company incorporation can range from HK$630 to several thousands, depending on the package (e.g., including company secretary, registered office address).
Licensing Fees: As mentioned above, PMP license fees vary by tier.
Other Potential Costs:
Office rent and utilities
Staff salaries and benefits
Insurance premiums
Legal and accounting fees
Marketing and advertising expenses
Ongoing compliance costs (e.g., annual return filing fees)
It is highly recommended to seek professional advice from a company formation specialist, lawyer, or accountant in Hong Kong to ensure full compliance with all regulations and to streamline the setup process.
Costs
The initial costs for setting up a PMC in Hong Kong can vary, but here's a general breakdown:
Company Incorporation (Government Fees):
Certificate of Incorporation: Approximately HK$1,720 (for electronic submission).
Business Registration Certificate: HK2,200 (for one year) + HK250 levy = HK$2,450.
Professional Service Fees (for incorporation): If you engage Bestar, these fees can range from a few thousand HKD to over HK$10,000, including services like registered office address, company secretary, and assistance with bank account opening.
PMSA Licensing Fees:
PMC Licence: HK500 (application) + HK18,000 (3-year licence) = HK$18,500.
PMP Licences (for individuals, varies based on number and tier).
Professional Service Fees (for PMSA Licensing):
Here's a breakdown:
1. Official PMSA Licence Fees (Mandatory Government Fees)
These are the fees you pay directly to the PMSA to apply for and hold a licence. These fees are set by the government and are non-negotiable.
Property Management Company (PMC) Licence (for 36 months / 3 years):
Application Fee: HK$500
Licence Fee: HK$18,000
Total: HK$18,500
Property Management Practitioner (PMP) Licence (Individual - for 36 months / 3 years):
PMP (Tier 1) Licence:
Application Fee: HK$100
Licence Fee: HK$3,600
Total: HK$3,700
PMP (Tier 2) Licence:
Application Fee: HK$100
Licence Fee: HK$1,200
Total: HK$1,300
Important Notes on PMSA Fees:
Application fees are generally non-refundable.
Licence fees may be refunded if the application is withdrawn before approval or if the application is rejected.
The validity period for licenses is typically 36 months (3 years).
Provisional PMP licenses were available during a transitional period, with options for 12 or 24-month validity, and different corresponding fees.
2. Professional Fees Charged by Service Providers (Optional but Recommended)
These are the fees charged by external consultants, lawyers, company formation specialists, or accounting firms who provide assistance with the PMSA licensing application process. These fees can vary widely depending on the scope of services and the complexity of your situation.
Services these professionals might charge for in relation to PMSA licensing:
Eligibility Assessment: Reviewing your company structure, staff qualifications, and experience to determine if you meet PMSA criteria.
Document Preparation and Review: Assisting in compiling, drafting, and reviewing all necessary application forms, supporting documents, financial statements, and operational plans to ensure they meet PMSA requirements. This can be complex, especially proving "effective control" by a PMP (Tier 1).
Compliance Advice: Providing detailed advice on ongoing compliance requirements once licensed, including manning ratios, record-keeping, and notification of changes.
Guidance on PMP Qualification: Advising individual practitioners on the specific academic, professional, and experience requirements for Tier 1 and Tier 2 PMP licenses, and pathways to achieve them (e.g., specified courses).
Application Submission Management: Handling the submission of applications to the PMSA and acting as a liaison during the vetting process.
Policy and Procedure Development: Helping develop internal policies and procedures for your PMC to ensure they align with PMSA codes of conduct and best practices.
Legal Opinion/Review: A lawyer might provide a legal opinion on specific aspects of your business model or agreements to ensure they comply with the Property Management Services Ordinance.
Factors influencing professional fees:
Complexity of your case: A straightforward application will cost less than one involving unique circumstances or past compliance issues.
Number of licenses: If you need help with both the PMC license and multiple PMP licenses for your staff, the fees will be higher.
Scope of services: Basic application assistance will be cheaper than comprehensive consulting that includes policy development or training.
Professional Fees:
It's difficult to give exact figures without knowing the specifics, but for comprehensive assistance with PMSA licensing for a PMC, you might expect professional fees to range from HK15,000 to HK50,000 or more, depending on the depth of support required and the size/complexity of your operation. This would be in addition to the official PMSA fees.
Recommendation:
When seeking professional help, always request a detailed quotation outlining the scope of services and associated fees. Given the critical nature of compliance with PMSA regulations, investing in professional assistance can save you significant time, stress, and potential penalties in the long run.
Ongoing Costs:
Annual Business Registration Certificate renewal: HK$2,450.
Annual company secretary and registered office fees (if outsourced).
Professional indemnity insurance premiums.
Office rent, utilities, staff salaries.
Accounting and auditing fees.
Continuing professional development (CPD) course fees for PMPs.
Recommendation:
Given the regulatory complexities, especially concerning the PMSA licensing, it is highly advisable to consult with:
A professional company formation specialist: To handle the company incorporation process efficiently.
A Hong Kong solicitor or legal advisor: To advise on specific property management contracts, legal liabilities, and regulatory compliance.
An accountant: For tax planning, bookkeeping, and financial reporting.
This will ensure your PMC is established correctly and operates in full compliance with Hong Kong laws.
How Bestar can Help
Setting up a company, especially in a jurisdiction like Hong Kong with its specific regulatory framework (like the PMSA for property management), involves numerous legal, administrative, and financial intricacies. This is where professional help becomes invaluable.
Here's how Bestar can assist you:
Bestar provides end-to-end company formation services, covering both administrative and initial legal aspects, making them a primary resource for the incorporation process. Beyond basic setup, they offer in-depth professional legal counsel for complex structures and specific industry regulations. Additionally, Bestar manages the financial and tax aspects of your company, ensuring compliance with accounting standards and tax laws.
How we help:
Guidance on Company Structure: Advise on the most suitable legal structure for your business (e.g., private limited company, sole proprietorship) considering your specific needs, liability concerns, and future plans.
Company Name Check & Reservation: Conduct searches with the Companies Registry to ensure your proposed company name is available and compliant with Hong Kong regulations.
Preparation of Incorporation Documents: Draft and prepare all necessary documents, including:
Articles of Association
Incorporation Form (Form NNC1)
Other supporting documents (e.g., consent to act as director/company secretary).
Submission and Liaison with Authorities: File the incorporation documents with the Companies Registry and the Business Registration Office (IRD) on your behalf, ensuring all forms are correctly filled and submitted to avoid delays. They act as your liaison with these government bodies.
Registered Office Address: Provide a mandatory registered office address in Hong Kong, which is required for all companies.
Company Secretary Services: Appoint a qualified company secretary (a mandatory requirement in Hong Kong) for the initial year. This includes maintaining statutory records, filing annual returns, and handling other compliance matters with the Companies Registry and IRD.
Bank Account Opening Assistance: Provide certified true copies of company documents and often assist in scheduling bank account opening meetings with local or international banks. Some even have partnerships with FinTech companies for faster account setup.
Post-Incorporation Compliance Reminders: Send timely reminders for annual returns, business registration renewals, and other statutory deadlines.
Overall Efficiency: Streamline the entire incorporation process, saving you time, effort, and minimizing the risk of errors that could lead to delays or penalties.
Corporate Structuring Advice: Provide detailed legal advice on the optimal corporate structure, considering factors like shareholder agreements, holding company structures, and international tax implications.
Shareholders' Agreements: Draft robust shareholders' agreements that define the rights and obligations of shareholders, mechanisms for dispute resolution, share transfer restrictions, and exit strategies. This is crucial for protecting your interests and avoiding future conflicts, especially in a multi-owner PMC.
Compliance with Industry-Specific Regulations: For a Property Management Company (PMC), a solicitor is crucial for navigating the Property Management Services Authority (PMSA) licensing requirements. We can:
Interpret the nuances of the Property Management Services Ordinance (Cap. 626).
Advise on the eligibility criteria for both the PMC license and individual PMP licenses.
Review and ensure your company's operational plan and internal policies align with PMSA requirements.
Assist with the application process for the PMC license, ensuring all declarations and supporting documents are legally sound.
Contract Drafting and Review:
Draft or review contracts with your clients (property owners), service providers, and employees to ensure they are legally sound, protect your interests, and comply with Hong Kong law.
This includes property management agreements, tenancy agreements, and employment contracts.
Intellectual Property Protection: Advise on registering trademarks for your company name or branding, copyright protection for proprietary software or materials, and other IP matters.
Regulatory Compliance Beyond Basic Registration: Provide ongoing advice on compliance with a broader range of Hong Kong laws, including:
Labor laws (employment contracts, MPF, leave policies)
Data privacy laws (handling tenant data)
Consumer protection laws
Specific real estate and property laws.
Due Diligence: If acquiring an existing PMC or forming a joint venture, Bestar will conduct due diligence to uncover any hidden liabilities or legal issues.
Tax Planning and Optimization: Advise on the most tax-efficient structure for your company and assist with initial tax planning strategies, including how to leverage Hong Kong's low profits tax rates.
Business Registration Certificate (BRC) Matters: Beside handling the initial application, Bestar will ensure ongoing compliance related to the BRC, particularly for annual renewal and tax purposes.
Bookkeeping and Accounting System Setup: Advise on or set up an appropriate accounting system for your PMC, ensuring accurate record-keeping of income (rent, fees) and expenses (maintenance, salaries, taxes).
Financial Reporting: Prepare financial statements (e.g., profit and loss statements, balance sheets) that comply with Hong Kong accounting standards.
Tax Filing and Compliance:
Prepare and file annual profits tax returns with the Inland Revenue Department (IRD).
Advise on deductible expenses and applicable tax allowances.
Ensure compliance with employer's returns and other tax-related obligations.
Payroll Services: Manage payroll for your employees, ensuring compliance with MPF (Mandatory Provident Fund) contributions and other labor-related deductions.
Financial Advice: Provide ongoing financial advice, including cash flow management, budgeting, and financial forecasting, which are crucial for the sustainability and growth of a PMC.
Audit Requirements: Advise on statutory audit requirements (most Hong Kong limited companies require an annual audit) and connect you with qualified auditors if they don't provide audit services themselves.
In summary Bestar:
Gets your company legally registered and set up with the basic statutory requirements (fast, efficient, administrative focus).
Provides deep professional counsel, drafts critical contracts, ensures compliance with specific industry regulations (like PMSA for PMCs), and represents you in professional matters (risk mitigation, strategic professional planning).
Manages your financial health, ensures tax compliance, sets up accounting systems, and provides financial reporting (financial accuracy, tax efficiency).
For a Property Management Company in Hong Kong, engaging Bestar is highly recommended to ensure a smooth setup, full legal and regulatory compliance (especially with the PMSA), and sound financial management from the outset.
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