With its closeness to Mainland China, Hong Kong offers a strategic gateway to doing business with one of the fastest growing economies. Other Asian countries are in the same time zone or have only few hours difference making Hong Kong the logical place for expansion across Asia and while many business owners think that it takes time to incorporate a company in Hong Kong, it’s actually very straightforward.
What kind of company can you open?
There are two types of companies that you can open in Hong Kong. The most common one is “Company Limited By Shares” or a “Private Limited Liability Company”, which is a separate legal entity and does not require the directors to have residency in Hong Kong.
The nature of your business, as well as the location, are not restricted, meaning you can do business anywhere in the world with a company registered in Hong Kong. If opening a business bank account became trickier over the last few years, an agent who provides company incorporation services in Hong Kong will be helpful to open the account.
There are types of businesses where you may need to apply for additional licenses, certificates or other official papers before being allowed to open a private limited liability company, especially for public services and note that trading businesses are not restricted.
How to register a business in Hong Kong?
Before registering your business, you first have to decide on a name. This name has to be unique in the Hong Kong Company Registry and you can directly check online if your business name is unique and available.
After you have the name you need fill out the Incorporation Form NNC1 and deliver either electronically or in hard copy together with the required fees as well as the company’s articles of association and a notice to business registration office.
To register your company in Hong Kong, note that you will need to have at least one director and one secretary. The secretary cannot be the same person as the director and will have to be local to Hong Kong. They are responsible for the records of the company and the statutory books as well as the company’s compliance with all laws and statutory requirements. The secretary can either be a person or a company.
Once you have all the documents handed in, you will get a Certificate of Incorporation and Business Registration Certificate. This usually takes a few hours if handed in electronically, or up to 4 days if delivered in hard copy.
What’s the business taxation system in Hong Kong?
The business taxation system in Hong Kong is fairly straight forward and simple. Companies only pay taxes on income generated in Hong Kong, between 8.25% and 16.5%, but not that a Hong Kong company can be entitled to 0% taxes, if:
- The company does not have clients in Hong Kong.
- And, does not have staff located in Hong Kong.
- And, does not have goods transiting by Hong Kong.
There is also a salaries tax for personal income and property tax for income that comes from Hong Kong property but Hong Kong does not have any sales tax, VAT, dividends tax or estate tax or other taxes which are common in most countries.
What are the requirements to open a company in Hong Kong?
Businesses can be owned 100% by foreigners and they are not required to live there. It might be necessary to visit in order to open bank accounts though, but that depends on the bank and your agent can help to open it.
Any person opening a company has to be over 18 years of age, have no bankruptcies, and cannot have been convicted of any malpractices.
All documents have to be delivered in English or with certified copies of translation in case of any other language, which is quick easy for foreigner willing to register their businesses in Hong Kong. You also have to have a registered local address in Hong Kong for your business, which cannot be a Post Office Box.
Having a company registered in Hong Kong is a smart business move if you want to do business in Asia, or if you do business internationally anywhere else in the world. It is a simple and fairly straightforward process, and with the help of a professional services firm you can have everything set up in 5 to 7 days.