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The Ultimate Guide To
Employment in Hong Kong

Hong Kong Facts

Population size: 7,346,248
Currency: HKD
Capital city: Hong Kong
Languages spoken: Cantonese, Traditional Chinese
Ease of Doing Business: 4

Employing in Hong Kong: What You Need to Know

Hong Kong employment law appears complex and confusing when looking from an outside view although in some ways there are many similarities to other countries.

The Hong Kong legal system is based on English common law and rules of equity. It is characterized by its strict adherence to the principles of the rule of law and independence of the judiciary. For these and many other reasons the following are only guidelines in the broadest sense, and professional legal services are recommended when employing in Hong Kong.

In Hong Kong, the Employment Ordinance (僱傭條例) sets out the minimum entitlements for employees, such as statutory holidays, Mandatory Provident Fund payments, sick and maternity leave and severance and long-service payments. Employment in Hong Kong is said to be less regulated than it is in many other jurisdictions such as the European Union and the United States.

The following are some general guidelines when it comes to probation periods, termination, leave and pension contributions in Hong Kong. The official website for Hong Kong is located at: www.labour.gov.hk/

Key Factors to Consider When Employing in Hong Kong

There are several key areas to be aware of within Hong Kong’s employment regulatory framework, especially for companies that plan to initiate a full local office and human resources department.  These challenges can be mitigated by use of a locally sourced payroll provider who is familiar with all of the Hong Kong laws and rules for both Hong Kong employees as well as foreign nationals.

Employment Termination in Hong Kong

Information Explanation
Severance / Redundancy Pay ?

The limit for entitlement to severance pay is at least 24 months for employees made redundant or laid off. The amount of severance pay is two-thirds of a month’s pay for each year of employment or two- thirds of HK$22,500 (i.e, HKD$15,000), whichever is less, up to a maximum payment of HKD$390,000.

The amount of any contractual gratuity based on length of service is deductible from the amount of severance pay due to an employee. In addition, the part of a retirement scheme benefit which is paid to or held in trust for the employee and which is due to the employer’s contributions may be set-off against an employee’s entitlement to the severance pay.

Termination of Employment ?

In Hong Kong an employment contract can be terminated by the employee or employer at any time and only require sufficient notice.

Notice is required and the exact notice periods can be agreed upon between the employee and employer. Payment can be made in lieu of notice. The Hong Kong Labour Department outlines the required lengths of notice as below:

 

(During probation) within the first month of probation: Not required
(During probation period, but after the first month of probation) With agreement to the length of notice: As per agreement, but not less than 7 days
Without agreement to the length of notice: Not less than 7 days notice
(No/after probation) With agreement to the length of notice: As per agreement, but not less than 7 days
  Without agreement to the length of notice: Not less than 1 month

 

Probation

Information Explanation
Probation Period ?

The law does not appear to set any rules for probationary periods, and does not appear to be explicitly defined in the Employment Ordinance or on the Hong Kong Labour Department’s website. However an article entitled “Notes for preparing an employment contract” published on the Labour Department’s website suggests the maximum is 3 months.

Pension

Information Explanation
Pension Requirements ?

Under the Mandatory Provident Fund Schemes Ordinance, Hong Kong employment is subject to mandatory contributions to an MPF scheme by both the employer and the employee.

MPF contributions rates are as follows:

Monthly relevant income (HKD) Employer contribution Employee/self-employed contribution
0 – 6,500 5% N/A
6,500 – 25,000 5% 5%
25,000 and above HKD1,250 HKD1,250

Using Shield GEO EOR Services: How We Can Help You

Companies entering Hong Kong can make a decision whether to use their own resources or to use a Global Employment Organization to handle employment and payroll responsibilities.  A GEO solution is particularly beneficial when a company is looking to setup an office quickly with a manageable cost. The complexity of employment regulations in Hong Kong makes the use of a GEO advisable to ensure full compliance with employment laws, including the drafting of local employment contracts for workers.

The company that is expanding into Hong Kong contracts with the GEO to employ and payroll their staff on their behalf.  The GEO then assumes the legal responsibility for these employees, sponsoring them on work permits if necessary, complying with local employment law and running their monthly payroll.  This is especially useful to fulfill all of the specific withholding requirements for pensions and benefits, as well as documenting termination, probation periods and leave requests.

A GEO EOR Solution vs DIY Employment in Hong Kong

Companies entering Hong Kong must make a decision whether to use their own resources for a Do-It-Yourself (DIY) approach, or to use a Global Employment Organization to handle payroll and employment responsibilities.  A GEO or Hong Kong Employer of Record solution makes it faster, easier and cheaper to deploy staff if they don’t have a Hong Kong entity established that can run payroll.

A DIY approach will take some time and expense until there is a properly incorporated entity ready to run payroll. Shield GEO can deploy foreign staff in 4-6 weeks and local staff in 48 hours. Additionally Shield GEO is responsible for all compliance issues related to the employment.

Shield GEO

Shield GEO provides a fully outsourced employment service in Hong Kong. Companies expanding into Hong Kong can contract with Shield GEO to employ and payroll their staff on their behalf in Hong Kong.  Shield GEO then assumes the legal responsibility for these employees, becoming the Employer of Record, sponsoring them on work permits, complying with local employment law and running their monthly payroll.

Using Shield GEO Employer of Record Services in Hong Kong

Payroll

Payroll Hong Kong
Management Fee for Employer of Record Services / Monthly Payroll Costs

Please contact us for a quote

Notes

Both Residents and Non-residents must complete tax returns in May each year, with their Employer required to submit an employer’s return for each employee by 31st of March in the same year. Based on the return the employee’s tax liability for the year in question and their provisional liability for the following year will be calculated. Tax payments are made in January and April, the outstanding amount of the preceding year and 75% of the provisional tax for the current year are paid in January, the remaining 25% of the provisional tax paid at the end of the year of assessment in April.

Currency ?

HKD

Tax Amount
Grossed income Tax Rate (%)
HKD 0-40,000 2%
HKD 40,001 - 80,000 7%
HKD 80,001 - 120,000 12%
HKD 120,001 + 17%

Expats are able to offset their taxable income with relevant business expenses. More info at KPMG here

Tax Returns Supplied

Yes

Employers Social Security and statutory contributions

Employer MPF (Mandatory Provident Fund) is 5% of gross income calculated on a max of HKD 30,000 per month

Employees Social Security and statutory contributions

Employee MPF (Mandatory Provident Fund) is 5% of gross income calculated on a max of HKD 30,000 per month

Insurance requirements

Private Medical Insurance is advised.

Can supply private health care

Yes

Can assist opening bank accounts

Yes

Work Permits

Work Permits
Can Sponsor Work Permit

Yes, Shield GEO is able to sponsor foreign workers on Work Permits (Employment Authorisation) which allows them to work in Hong Kong. As the Employer of record, Shield GEO handles all of the formalities and employment requirements in Hong Kong. The client maintains responsibility for day to day employee management.

Work Permit cost

USD $2,500 USD

Work Permit processing time

4-6 weeks. HKID card will take a further 2 weeks on arrival.

Work Permit process

Shield GEO applies for the Employment Visa with the Hong Kong Immigration Department. Once visa issued the employee must enter Hong Kong within 90 days.

HKID (Hong Kong ID) application must be filed within 30 days of the employee’s arrival.

Documentation required :

  • passport copy
  • passport photos
  • employment contract
  • degree/diploma documents
Can Work Permit be processed in country

No

Switch Business Visa to Work Permit?

No

Can Spouse work on dependent visa?

Yes

Business Visas

Business Visas
Can do Business Visa

Yes

Business Visa Cost

USD $450

Business Visa processing time

3-7 days depending on the consulate

Payroll and Tax in Hong Kong

Employment in Hong Kong is said to be less regulated than it is in many other jurisdictions such as the European Union and the United States, but running a payroll will still require attention to local laws and statutory requirements for both foreign nationals and Hong Kong residents.

The primary concerns for a foreign company that needs to comply with tax laws in Hong Kong are: individual income tax (IIT) for employees, social security costs, pension contributions, payroll tax, sales tax, withholding tax, business tax and permanent establishment concerns.

Your Payroll Options in Hong Kong

Information Explanation
Remote Payroll ?

A remote payroll in Hong Kong is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Hong Kong. One option for a non-resident company to payroll its employees (local and foreign) in Hong Kong is to use a fully outsourced service like a GEO, which will employ and payroll the staff on their behalf.

Local Payroll Administration ?

In some cases, a company will register their business in Hong Kong under one of the forms available, but prefer to have another company administer its payroll.  This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll ?

Larger companies with a commitment to Hong Kong may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Hong Kong payroll, and can fulfill all tax, withholding, and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Hong Kong employment laws.

Fully Outsourced Payroll & Employment ?

Companies can outsource the employment and payroll of their staff in Hong Kong to a GEO, like Shield GEO. This is possible for both foreign workers and Hong Kong nationals. This is the easiest, fastest and safest way to payroll staff in Hong Kong.

Shield GEO manages all aspects of payroll for workers in Hong Kong, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.

Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.

Read more about outsourced payroll and employment through Shield GEO.

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Setting up payroll in Hong Kong

Information Explanation
National Currency ?

HKD

Tax Figures

Information Explanation
Corporate Income Tax ?

16.5% for Hong Kong sourced profits from business carried out in Hong Kong.

Income Tax Rate ?
Grossed income Tax Rate (%)
HKD 0-40,000 2%
HKD 40,001 - 80,000 7%
HKD 80,001 - 120,000 12%
HKD 120,001 + 17%

Expats are able to offset their taxable income with relevant business expenses. More info at KPMG here

Payroll Tax ?

N/A

Sales Tax ?

N/A

Withholding Tax ?

N/A

Time to prepare and Pay Taxes ?

74 hours

Time required to start a Business ?

1.5 days

Hong Kong Immigration and Work Permits

Foreign workers are required to have the proper visas and work permits in Hong Kong, as established by immigration laws.  Some nationalities can enter Hong Kong without a visa but you cannot process a work visa application whilst in Hong Kong.

Permanent employees will find that it is possible to get a work permit easily using the sponsorship of the employer, which is required in Hong Kong.

To sponsor an employee, local registration and licensing is required, which can be a lengthy process depending on the type of business structure.  If you have yet to complete the incorporation process you can use an outsourced management company or GEO Employer of Record to sponsor the employee for the necessary permits.

Your Options

Use the Shield GEO Employer of Record Solution?

  • Shield GEO applies for the General Employment Program (GEP) – Professional Work Visa directly with the Hong Kong Immigration Department. This process takes approximately 4-6 weeks.
  • Once visa issued the employee must enter Hong Kong within 90 days. Shield GEO will collect the visa directly from the Hong Kong Immigration Department and courier it to the the GEO employee.
  • The employee will present the visa to the immigration officer when they arrive in Hong Kong.
  • After arrival a HKID (Hong Kong ID) application must be filed within 30 days of the employee’s arrival. This must be done in person at the Hong Kong Immigration Department.

Documentation required for the GEP – Professional visa:

  • passport copy
  • passport photos
  • employment contract
  • degree/diploma documents
  • marriage / birth certificates for spouse & dependents

All documents must be in English or Chinese, or accompanied by certified translations into English or Chinese

Use your own company?

An employment visa will be required in order to work in Hong Kong and failure to do so is an offense under the Hong Kong Immigration Ordinance.

The HKID assess each application on its own merit and will be favourably considered if:

  • The business sponsoring the visa is of benefit to the economy, industry and trade of Hong Kong
  • The employee in question has skills, knowledge and experience not readily available in the country
  • The position cannot be easily filled by someone locally in Hong Kong

 

The sponsoring employer will need to apply for the General Employment Program (GEP) – Professional Work Visa directly with the Hong Kong Immigration Department. This process takes approximately 4-6 weeks.

Once visa issued the employee must enter Hong Kong within 90 days. The company will need to collect the visa directly from the Hong Kong Immigration Department.

The employee will present the visa to the immigration officer when they arrive in Hong Kong.

After arrival a HKID (Hong Kong ID) application must be filed within 30 days of the employee’s arrival. This must be done in person at the Hong Kong Immigration Department.

Documentation required for the GEP – Professional visa:

  • passport copy
  • passport photos
  • employment contract
  • degree/diploma documents
  • marriage / birth certificates for spouse & dependents

All documents must be in English or Chinese, or accompanied by certified translations into English or Chinese.

Extensions of the employment visa are available.

The employment visa is employer specific – the employee in question is only authorized to work for the sponsoring employer in Hong Kong.

If the employee is required to work for another organisation, the employee must obtain side-line approval from the HKID.

Upon termination, the sponsoring employer in Hong Kong must inform HKID.

Types of visas in Hong Kong

Category Description of Visa
General Employment Policy (GEP) - Professionals

GEP- Professionals visa is for an appropriately qualified foreigner with a relevant job offer in Hong Kong that cannot be filled by a local worker. This means the job must be relevant to their qualifications and/or experience, that they are paid at market rate or better and that they have sufficient experience and qualifications to perform the role.

There are no quota or industry sector restrictions on the GEP – Professionals program. Visa holders are able to bring their spouse and dependent children under the age of 18. Holders of a dependant visa can work and study in Hong Kong.
The visa takes 4 weeks to process.

Setting up a company in Hong Kong

When setting up a company you may want to consider these factors:

  1. Business Factors

    • The industry and type of business
    • Nationality of the headquarters/individual(s) and
    • Presence of existing trade agreements or relationships
  2. Location

    Location will be another factor since separate cities and regions such as the different states may have different rules, costs and availability. It is always recommended to seek advice from relevant professionals, such as business or legal advisors, accountants and others depending on your needs.

  3. Languages

    Due to its colonial roots, Hong Kong has a relatively good level of English support and service.  Nonetheless, knowledge of Chinese (both Cantonese and Mandarin) will be pertinent when dealing in this country.

  4. Visa and Residency

    Foreigners transferring or being appointed in a company may require appropriate visas.

Your Options

This document provides a general overview of how to set up the most common types of business structures in Hong Kong.

While part of China, Hong Kong is classified as a ‘Special Administrative Region’ (SAR). Hong Kong was occupied during the British during the colonial period and after the Second World War. While it was returned to China’s control in 1997, its mix of British and Chinese history has shaped the environment and culture of the region and the business environment is heavily influenced by British models. For the multinational company this means that compared to mainland China, Hong Kong is still very accessible and straightforward option to establish a foreign business, and has historically been considered by many to be the ‘gateway to China’.

There are 3 main options:

1) Representative office

2) Branch office

3) Subsidiary company

An interesting point about Hong Kong is that it has no restrictions on foreign ownership for any company structure, neither for employment, this implies a company may be completely foreign owned and run by foreigners. However, for all company types, Hong Kong regulations do require at least one permanent representative resident in Hong Kong.

Representative Office

Representative offices enable a foreign company to establish a place of business and enter into contractual agreements such as a commercial lease and are able to employ people. However they are not allowed to engage in any “profit-making” activity that would otherwise accrue income/corporate tax in Hong Kong. This structure is thus for preliminary entry, such as market research, scouting the market, establishing presence and holding business meetings and networking.

Hong Kong law recognizes the status of a foreign corporation whose activities in Hong Kong do not require it to be registered as a Hong Kong branch. In such a case, the appropriate status is that of a local representative office of the foreign corporation.

A representative office must not transact any business in Hong Kong which creates any commercial legal obligations, with exceptions such as entering into usual arrangements with utility companies; landlords for leasing and with its employees. Rather, a representative office should not generate any profits within the scope of Hong Kong taxation.

A representative office’s main activities are generally limited to preliminary stages before forming a branch office or company, market research, scouting potential business partners, and possibly building brand awareness. Generally, it would act only in a liaison capacity between the corporation and the corporation’s offices elsewhere and introducing Hong Kong customers to those offices, and not make any decisions on its on.

A foreign corporation, which establishes a representative office in Hong Kong is not required to register but must still obtain a Business Registration Certificate (的商業登記證). The representative office may apply to the Inland Revenue Department (稅務局) for an exemption from filing profit tax returns on the basis that it does not carry on business in Hong Kong; otherwise, it may file annual profit tax returns on a “NIL” basis.

Registration Steps

1. Establish a place of business

This is an optional step for representative offices. As mentioned above, even though not-for-profit, representative offices may take on contracts such as leases and employment, thus it is possible for one to rent a physical office space in Hong Kong.

One option that may be off interest in Hong Kong are services which provide a “virtual address”. This does not mean in the electronic/web-based sense, but are companies that control physical office space in Hong Kong and provide for a service fee, a business address, phone and fax numbers, and staff to answer calls in English, Cantonese, or Mandarin.

Examples of these businesses include HK Commons (http://hkcommons.com/), Compass (http://compassoffices.com/), and Centre O (http://www.centreo.hk/).

Agency: N/A

Time: N/A

Cost: N/A

2. Apply for a Business Registration Certificate

It is mandatory for all branches to register their business with the Inland Revenue Department’s Business Registration Office (香港稅務局商業登記) and obtain a Business Registration Certificate (的商業登記證). Registration must be done within one month of the date of incorporation in Hong Kong. On successful receipt of the application, the Business Registration Certificate will be issued on the next working day and must be collected in person.

The business registration number that appears on the Business Registration Certificate is also the respective company’s tax filing number.

The Business Registration Certificate must be displayed on the office premises at all times.

Agency: Inland Revenue Department (香港稅務局)

Time: 2 days

Cost: HK$2,000 for a one-year certificate; HK$5,200 for a three-year certificate

Branch Office

A branch office is a more formal structure, which has a legal entity status that allows it to enter into agreements and also generate profits and taxes. However, it is not considered an independent separate legal entity, but instead an extension of its foreign parent. It is not expected to engage in independent decision-making but rather be directed by its foreign parent. As such, it is considered part of the same legal entity that forms the foreign parent and thus the foreign parent company is liable for all debts and obligations of the branch office.

Like a limited company a branch office is a legal entity, however a branch office is treated not as a domestic company but as an ‘extension’ of the foreign parent company. The branch is not a separate legal entity in its own right; instead the foreign parent company is accountable and responsible for all the debts and liabilities of the branch office. Nonetheless, like a subsidiary company, a branch office must be registered with the Hong Kong’s Companies Registrar.

Generally, branch offices are subject to the same legal and tax consequences as companies incorporated in Hong Kong. Branch offices have to adhere to the ongoing compliance requirements like filing annual returns, filing tax returns and are required to execute other public disclosure requirements.

Registration Steps

1. Check Right to Use Company Name

Although the right to use a name does not need to be formally certified, names that are the same as a name already in the index of company names kept by the Registrar of Companies (“the Registrar”) or that infringe on existing IP such as trademarks, will be rejected upon incorporation and the fees will not be refunded.

Generally, the name of the branch must match the name of the overseas parent company. However, the Companies Registry reserves the right of disallowing the branch from using its parent company’s name if the name is already in use in Hong Kong or is otherwise deemed as misleading or improper.

The name will generally be approved unless it is the same as or similar to a name appearing in the Companies Registry’s ‘Index of Company Names’ Infringes on trademarks Is considered offensive or otherwise contrary to public interest.

A company name search may be conducted free of charge through the Companies Registrar’s Cyber Search Centre or Company Search Mobile Serviceor at the Public Search Centre on the 13th floor of the Queensway Government Offices.

A search in the Trademark Register (http://ipsearch.ipd.gov.hk) maintained by the Intellectual Property Department should also be conducted.

When choosing a name, it is possible to use an English name, Chinese name, or both. For a Chinese name, you may include English letters, but not English words. As with most companies, the name when displayed must include the appropriate legal element (e.g. “ABC Ltd.”) and cannot use restricted words such as words that would falsely suggest the company is part of the government.

Agency: Hong Kong Companies Registrar Cyber Search Centre: http://www.icris.cr.gov.hk/csci/ (Chinese language only)

Trademark Register: http://ipsearch.ipd.gov.hk

Time: Instant

Cost: None

2. Appoint a local representative

A branch office must have at least one permanent agent who is a resident in Hong Kong. The representative must be authorized to accept legal notices served on the company. The authorized representative can be an individual or body corporate (such as a corporate firm of solicitors or professional accountants only).

Agency: N/A

Time: N/A

Cost: N/A

3. Establish a place of business

A branch office is required to have a place of business, although it apparently doesn’t have to be formally registered. The place must be a physical location where, among other things, statutory documents are kept.

In Hong Kong, there are services, which provide a “virtual address” by providing you a business address, phone and fax numbers, and staff to answer calls in English, Cantonese, or Mandarin. Examples of these businesses include HK Commons (http://hkcommons.com/), Compass (http://compassoffices.com/), and Centre O (http://www.centreo.hk/).

Agency: N/A

Time: N/A

Cost: N/A

4. Register the Company

Like a subsidiary company, a branch office must be registered with the Hong Kong’s Companies Registrar. The following documents are required:

  • A duly completed form providing details of the branch office such as registered address, local representative, particulars of the parent company, etc.
  • A certified copy of the constitution (e.g. Memorandum and Articles of Association) for the parent company
  • A certified copy of the local Certificate of Registration for the parent company
  • A certified copy of the latest accounts of the foreign company (If the company is not required to publish or disclose its accounts to the public, it is not required to submit accounts but the reason must be stated accordingly).
  • Identification documents for the local representative of the branch office
  • Any documents not in English or Chinese must be translated in English or Chinese through official channels before submission.

If there were no problems with the name approval process and registration documents are found to be in order, the Company Registrar will issue a “Certificate of Registration of Non ­Hong Kong Company”. The certificate has to be collected in person at the Companies Registry. A written authorization will be required if the person who applied sends a different representative to collect the certificate.

Side note: Most of the business activities don’t require any special business licenses in Hong Kong. However if a special business license is required, you must obtain it before commencing operations.

Agency: Hong Kong Companies Registrar

Time: 2 weeks

Cost: HKD$1,720

5. Apply For Business Registration Certificate

You need to register your business with the Business Registration Office of the Inland Revenue Department (香港稅務局). The application for company incorporation includes a simultaneous application for business registration, so in most cases this step will be combined with the previous step.

If business registration is not done combined with the company registration, you must register at the Hong Kong Companies Register (公司註冊處) in person within one month of starting business, submitting a Notice to Business Registration Office Form (IRBR1).

On successful receipt of the application, the Business Registration Certificate (的商業登記證) will be issued on the next working day and must be collected in person. The Business Registration Certificate must be displayed on the office premises at all times.

Agency: Inland Revenue Department (香港稅務局), or possibly also through Hong Kong Companies Registry (公司註冊處) (online: e-Registry)

Time: 2 days

Cost: HKD$2,000 for a one-year certificate; HKD$5,200 for a three-year certificate

6. Obtain Corporate Bank Account

Opening a business bank account in Hong Kong is reportedly straightforward. You will need your incorporation and registration documents from the previous steps, appropriate identify and residence documentation, and the bank will advise you further documents they require, depending on the bank.

Banks in Hong Kong normally require a minimum deposit the amount of which varies between different banks.

Agency: Commercial Banks (商業銀行)

Time: 1 day

Cost: None (may vary depending on bank, some banks usually require minimum first deposit)

Company

The next most common option is establishing a full Hong Kong based company, either a private or public limited company. This structure encompasses the typical elements you would expect from a corporate structure: legal entity status, limited liability, independent board of directors and management committee, etc.

A Limited Company is the most commonly-used company type. It is fully incorporated in Hong Kong, meaning the company can take advantage of all tax benefits and concessions available to any fully incorporated business, including the Closer Economic Partnership Arrangement (CEPA), a free trade agreement with mainland China. Most of the limited companies incorporated in Hong Kong are private companies limited by shares.

A private limited company in Hong Kong requires at least one director who is an individual (i.e. not a company) and one company secretary (which can be a company or individual). A non-Hong Kong resident can be appointed as a director. If the company has one director only, the sole director cannot be the company secretary at the same time. If the company secretary is an individual, they must reside in Hong Kong, or if the secretary is a body corporate, its registered office or place of business should be in Hong Kong.

For a company limited by shares the liability of members is limited by the articles of association to the amount unpaid on the shares respectively held by them.

Registration Steps

1. Choose a Company Name

Before incorporating in Hong Kong, the right to use the company name should be confirmed first. Although the right to use a name does not need to be formally certified, names that are the same as a name already in the index of company names kept by the Companies Registrar (公司註冊處) or that infringe on existing IP such as trademarks, will be rejected upon incorporation and the fees will not be refunded.

A company name search may be conducted free of charge through the Companies Registrar’s Cyber Search Centre or Company Search Mobile Service or at the Public Search Centre on the 13th floor of the Queensway Government Offices.

A search in the Trademark Register (商標註冊處) (http://ipsearch.ipd.gov.hk) maintained by the Intellectual Property Department (知識產權署) should also be conducted.

When choosing a name, it is possible to use an English name, Chinese name, or both. For a Chinese name, you may include English letters, but not English words. As with most companies, the name when displayed must include the appropriate legal element (e.g. “ABC Ltd.”) and can not use restricted words such as words that would falsely suggest the company is part of the government.

Agency: Hong Kong Companies Registrar (公司註冊處) Cyber Search Centre: http://www.icris.cr.gov.hk/csci/ (Chinese language only)

Trademark Register (商標註冊處): http://ipsearch.ipd.gov.hk

Time: Instant

Cost: None

2. File Articles of Incorporation

Application for Incorporation is made with the Hong Kong Companies Registry (CR) (公司註冊處). To simplify the process of setting up a limited company, any application for company incorporation includes a simultaneous application for business registration (商業登記).

You may simply deliver the following documents online at the CR’s e-Registry including:

  • Incorporation Form (Form NNC1 for company limited by shares)
  • A copy of the company’s Articles of Association (章程)
  • A Notice to Business Registration Office (IRBR1)

After certificates of incorporation (and registration) are received, it is also advisable to visit the website of the Trade and Industry Department (http://www.tid.gov.hk/eindex.html) for information on other licenses, permits, certificates and approvals relevant to import and export and other business operations in Hong Kong.

Agency: Hong Kong Companies Registry (公司註冊處) (online: e-Registry)

Time: Online: 1 hour

Hard Copy: 4 days

Cost:

  • Company Registration fee – HK$1,720 (If unsuccessful, an application for a refund of HK$1,425 may be made)
  • Business registration fee – HK$2,000 for a one-year certificate; HK$5,200 for a three-year certificate
  • Levy to the Protection of Wages on Insolvency Fund – HK$250 for a one-year certificate; HK$750 for a three-year certificate

3. Apply for a Business Registration Certificate

You need to register your business (的商業登記證) with the Business Registration Office of the Inland Revenue Department (香港稅務局商業登記). The application for company incorporation includes a simultaneous application for business registration (商業登記), so in most cases this step will be combined with the previous step. If it is not, you must register at the Hong Kong Companies Register in person within one month of starting business, submitting a Notice to Business Registration Office Form (IRBR1).

Once you have registered your business, you must display your Business Registration Certificate (的商業登記證) at your place of business.

Agency: Hong Kong Companies Registry (公司註冊處) (online: e-Registry)

Time:

  • 30 minutes for in person applications
  • 1 hour for online applications (when applying in combination with incorporation)
  • 2 days for posted applications

Cost: HK$2,000 for a one-year certificate; HK$5,200 for a three-year certificate

4. Open a Corporate Bank Account

Opening a business bank account in Hong Kong is reportedly straightforward. You will need your incorporation and registration documents from the previous steps, appropriate identify and residence documentation, and the bank will advise you further documents they require, depending on the bank.

Banks in Hong Kong normally require a minimum deposit the amount of which varies between different banks.

Agency: Commercial Banks (商業銀行)

Time: 1 day

Cost: None

Outsourcing Employment Through a GEO Employer of Record Service

Whether to incorporate in Hong Kong, and what sort of entity to setup are just two of the many choices companies must make when expanding into a new market.

If the company intends to have staff in Hong Kong they must also decide whether they will administer that employment internally or use a Global Employment Organization to handle payroll and Employer of Record responsibilities. A GEO Employer of Record solution is an attractive alternative where

  • the company is looking to setup an office quickly
  • the company wants to work within a defined budget
  • the company wants to limit its initial commitment in Hong Kong
  • the company needs help with tax, employment, immigration and payroll compliance in Hong Kong

The complexity of employment regulations in Hong Kong makes the use of a GEO advisable coupled with local legal counsel to ensure full compliance with employment laws, for example the drafting of local contracts for workers.

Shield GEO provides a comprehensive service in Hong Kong allowing companies to deploy their staff quickly with reasonable, clearly stated costs and timeframes. The company contracts directly with Shield to employ and payroll their staff on their behalf in Hong Kong.

Shield GEO then becomes the Employer of Record. Shield GEO assumes the legal responsibility for these employees, sponsoring them on work permits, complying with local employment law and running their monthly payroll. Using Shield GEO is the fastest and most cost effective way to deploy local and foreign workers into Hong Kong. Read more about outsourced employment through Shield GEO.

Summary of Set Up Steps

Rep. Office Branch Office Company Time Cost (HKD)
Check Right to Use Corporate Name Yes Yes Instant Free
Appoint a representative Yes Yes Yes
File Articles of Incorporation Yes 1 hour (Comp.)2 days (branch office) 1970
Business Registration Certificate Yes Yes 2000/yr
Establish Place of Business Optional Optional Yes 0
Open Corporate Bank Account Yes Yes 1 day
If employing people:
Obtain tax number, social security registration, etc Yes Yes Yes Instant 0
Workplace Insurance Yes Yes Yes varies
TOTALS:Applications and processing times, not including internal document preparation, etc Rep. Office1 dayHKD $0 Branch3 daysHKD $2000 Company1 dayHKD $3970

APPENDIX

Business Terminology

English Pinying Chinese (Mandarin)
Articles of Incorporation zhāngchéng 章程
Bank yínháng 銀行
China Zhōngguó 中國
Commercial Bank Shāngyè yínháng 商業銀行
Hong Kong Xiānggǎng 香港
Stockholder; shareholder gǔdōng 股东
Tax shuì
Wages; pay; earnings; salary gōngzī 工资
Hong Kong specific terminology:
Hong Kong Companies Registry/Registrar Xiānggǎng gōngsī zhùcè 公司註冊處
Hong Kong Inland Revenue Department Xiānggǎng shuìwù jú 香港稅務局
Business Registration Yè dēngjì 商業登記
Business Registration Certificate De shāngyè dēngjì zhèng 的商業登記證
Trademarks Registry Shāngbiāo zhùcè chù 商標註冊處
Intellectual Property Department Zhīshì chǎnquán shǔ 知識產權署
Trade and Industry Department Gōngyè màoyì shǔ 工業貿易署
Employment Ordinance Gùyōng tiáolì 僱傭條例
  • Tax Compliance : What is FATCA and who is affected?

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Hong Kong

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