Have questions? Ask us!

Incorporation

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

Hong Kong

CONTACT US

  • This field is for validation purposes and should be left unchanged.

BACK TO TOP

Join over 1,000 professionals!

Subscribe to our monthly Global Mobility newsletter