Updated: May 17
Formation of Company in Hong Kong
Foreign investors wishing to open a company in Hong Kong are free to choose from several types of business structures. Of the companies available, the most common is the Hong Kong Limited Liability Company. This is also used to open offshore companies in Hong Kong.
Hong Kong is a top financial center and one of the most competitive economies in the Asia-Pacific region, topping the most prestigious survey. Among them, the Global Competitiveness Index and the Ease of Doing Business report rank Hong Kong among the top in the world in terms of economic development.
Our experts in Hong Kong company formation can help foreign investors who want to register any type of company in Hong Kong.
Type of company which can be started by a foreigner
Private companies limited by shares Public companies limited by shares Private unlimited companies with a share capital Public unlimited companies with a share capital Companies limited by guarantee without a share capital
Minimum share capital for LTD company and paid-up requirements
Minimum number of
shareholders for limited company
Timeframe for the incorporation
2 working days
Corporate tax rate
8.25% of the first HK$2 million profit;
16.5% of the remaining assessable profits.
Dividend tax rate
0%; dividends paid by a Hong Kong company to another resident or non-resident company are not subject to withholding tax.
No VAT or sales tax.
Number of Double Taxation Treaties
More than 40 double tax agreements
Do you provide a registered address?
Local director required?
Annual meeting required?
Yes, however, the Companies Ordinance provides for some exceptions.
Are accounting/annual returns required?
Foreign ownership allowed?
Are there any tax exemptions?
Interest income and trading profits from long-term debt instruments are not included in taxable profits.
Are there any incentives available?
Employment incentives (youth employment, elderly, middle-aged job seekers and persons with disabilities).
Business Forms in Hong Kong
Registering a company in Hong Kong is simple for all types of companies available, and it is important to understand their characteristics and differences before deciding to invest here.
There are several types of business forms that can be incorporated in the SAR. Below, you can see how our company secretarial team specializing in Hong Kong company registration describe them:
Limited Liability Companies: These can be public or private, and they are separate legal entities; thus, the founders are protected from business risk and have limited liability.
Sole-Proprietorship: The simplest form of business and the one with the highest responsibility; it is registered by one person.
Partnership: A business structure of two or more partners in which all of them assume full liability.
In addition to setting up a company in Hong Kong, foreign investors can also open a branch or representative office, and our experts can help.
Investors wishing to learn more about the available business forms can contact our experts. These companies, whether private or public, are companies that can be purchased as shell companies, which are business forms used by investors who wish to set up offshore companies in Hong Kong.
Small and medium-sized companies are incorporated as private limited companies - the most widely used form of business. The type of shell company usually available for purchase is a private limited company. The advantages of a private limited company are as follows: separate legal entity and limited liability for the founders, ease of raising capital and ease of transfer of ownership, perpetual succession and an overall positive business image as limited companies have more credibility compared to sole traders or partnerships.
A company's share capital is divided into shares corresponding to a certain class defined in the company's articles of association. In the event of a business failure, shareholders will lose their investment, which means they will lose the shares of the company they own. As long as the company is profitable, shareholders are entitled to a share of those profits in the form of dividends received.
Investors interested in setting up a company in Hong Kong will start by choosing their preferred business structure. Some questions that can be answered when making this decision include: What is the purpose of the business? What is its size? How much capital is available for starting a business? What is the degree of liability for the founder?
1. Choose a business form TYPE OF COMPANY The first step in setting up a company in Hong Kong is to choose the appropriate business form, whether it is a private or public company.
2. Choose company name A UNIQUE NAME The new company will have a unique name, a condition that is more important for companies than for sole traders who are not bound by specific requirements. The name can be checked online.
3. Prepare documents ARTICLES OF ASSOCIATION When setting up a company, the next step is to prepare the company's incorporation documents. These include details about the type of business, founders, registered office, capital, etc.
4. Open a bank account BUSINESS ACCOUNT New companies need to open a corporate bank account at a local bank branch. The share capital is deposited here and the account is used for commercial transactions.
5. Register and obtain a license FINAL REQUIREMENTS The new business is registered with the Registrar of Companies and the Inland Revenue Department and applies for other mandatory special licenses as required (for most business forms).
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Ways to Own a Company in Hong Kong
There are two ways to own a company in Hong Kong:
- By registering a new company;
- By purchasing a Hong Kong shell company.
Regardless of the entrepreneur's choice, both structures have their own advantages, which our company registration agents in Hong Kong can explain.
The new company will be set up in a manner suitable for investors from the outset. The Articles of Association will be written by the founders and will contain the corporate governance characteristics they are after. In contrast, these constituent documents of a shell company are already written and can be amended if necessary.
Incorporating a company in Hong Kong is a simple and quick process, which is why some investors may find that registering a new company takes about as long as buying a shell company that requires subsequent changes to comply with their operational requirements. These subsequent changes may include changing the company name and amending the articles of association. In all other cases, when shell companies are acceptable to investors, this option can help them save time and start trading faster than opening a new company. Investors who weigh in on both options should consider this issue.
Regardless of the entrepreneur's choice, both structures have their own advantages, which our company registration agents in Hong Kong can explain.
Requirements for Opening a New Company in Hong Kong
As mentioned above, one of the two methods used by foreign investors who want to open a company in Hong Kong is to register a new company with the company registry of Hong Kong. To set up a company in Hong Kong, the following requirements must be met:
The company must have at least one shareholder;
The company must also have at least one director;
The company must have a registered address in Hong Kong;
The company must appoint a secretary.
There is no requirement for a minimum amount of paid-in capital for a company. Shareholders can be individuals or companies. In addition, while there is no restriction on the residency of directors and shareholders, the secretary must be a Hong Kong resident. However, it is also possible to appoint a local company that provides company secretarial services and our company formation representatives provide secretarial services in Hong Kong.
The procedure for registering a private limited liability company as a legal entity is as follows:
Registering a Company - Process Explained by our Hong Kong Company Formation Team
If the above conditions are met, foreign investors or companies can go through company registration procedures. However, a local company or representative must be appointed to carry out the registration process.
The following documents are required to set up a company in Hong Kong:
company Articles of Association;
copies of identification documents of shareholders and directors;
the prescribed application form;
a letter from the bank for foreign shareholders and directors.
In the case of corporate shareholders, a certificate of incorporation of the shareholder company is required. The company must also have an original name that can be checked at the Hong Kong Companies Registry.
Why Open a Company in Hong Kong?
One of the main reasons for choosing Hong Kong as an investment destination to register a new company is the commercial law based on the English legal system and the low corporate tax rate of around 16.5%. It should also be noted that offshore companies are only taxed on the income they earn in Hong Kong. If you need to calculate your taxes in Hong Kong, don't hesitate to use our tax calculator. For a personalized consultation, do not hesitate to contact our Hong Kong company formation specialists.
The openness of the business environment, the ease of doing business and starting a company, and the fact that it is an international financial center are also strong reasons for investors to choose Hong Kong as their Asian business base. In addition, a special advantage for trading enterprises is that Hong Kong has free port status.
Steps to Set Up a Company in Hong Kong
We introduce the necessary procedures for investors to open a company in Hong Kong:
Choose the company type: This is a choice based on the future business scale and available funds; the business form can be changed as the business expands.
Select a company name: The company name must be the original name; a name check is available.
Open a bank account: All companies deriving income from Hong Kong are required to open a bank account.
Draft company documents: Articles of association and any other corporate resolutions are drafted in this step.
File for registration: the documents and the completed application form are submitted to the Companies Registry; among the required documents, the founder also needs to provide a copy of the identity document. If all documents are in place, the Certificate of Incorporation and Business Registration Certificate will be issued in about a week.
Register with the Inland Revenue Department: Hong Kong companies need to be registered for tax purposes.
Obtain any other permits and licenses: This step will depend on the chosen line of business; special arrangements must also be made for hiring employees.
Our Hong Kong company formation consultants can assist with the company registration procedures for companies. We can provide you with more information on these steps as well as personalized information depending on the field of business you wish to enter and the type of company you will be setting up.
Choosing a Hong Kong Shelf Company
The second option for foreign investors interested in owning a company in Hong Kong is to buy a ready-made company. The biggest advantage of Hong Kong shell companies is that they are come registered and have all the documents and designated personnel. However, the buyer can amend the company documents and also replace the directors and secretary if required.
In order to purchase a shell company, the buyer and seller must sign a sale and purchase agreement. The Companies Registry will then be notified of the new owner. Our company registration agents in Hong Kong provide already registered companies to meet the needs of our clients.
Cost of Setting Up a Company in Hong Kong
Before setting up a company in Hong Kong, you should know the main costs of setting up a new company in Hong Kong, which are as follows:
Company Formation Fee - Investors using our services will pay approximately HKD5,000.
Virtual Office Fee - The virtual office packages offered by our company formation specialists cost approximately HKD1,800 per year.
Accounting Fee - Accounting services in Hong Kong cost approximately HKD440 per month.
Registration Fee - The Companies Registry charges an estimated fee of HKD 1,720.
Minimum Share Capital - There is no mandatory minimum share capital requirement in Hong Kong, however, the minimum issued or paid-up share capital is usually HK$1 per share.
Our CPAs in Hong Kong provide complete solutions for new companies, start-ups and businesses of all sizes. Our team provides solutions tailored to the number of employees and the industry in which the company operates. In addition to our registration services in Hong Kong SAR, you can also contact us to learn more about our accounting solutions.
Additional Costs for New Business in Hong Kong
New companies in Hong Kong need to be prepared for additional costs in addition to the costs associated with the minimum share capital and registration fees. Companies need to have a registered office, for which many business owners buy property or rent office space in Hong Kong. Property prices in Hong Kong can be high, depending on the type of property and whether the space is co-owned or shared.
Some investors may find that the costs associated with virtual office services are more appropriate and better suited to their business needs. In this case, they need to buy a virtual office package according to their needs.
Before setting up a company in Hong Kong, one should know that other annual costs of a Hong Kong company worth mentioning include those related to accounting services. Companies interested in hiring staff in Hong Kong need to be prepared to deal with the costs associated with hiring staff.
Our Hong Kong company formation experts can provide you with more information on the different types of costs associated with various business types. Depending on the activities you wish to carry out, you may also need to obtain special permits and licenses and pay additional fees for these documents.
Foreign Investment in Hong Kong
Foreign investors interested in setting up a company in Hong Kong should know that Hong Kong is one of the countries that receive the highest value of foreign direct investment. Some of the top investing countries include China, the UK, the Netherlands, the US, and Japan, among others. The largest investment business segment remains the financial sector, where large amounts of money are invested in finance, insurance or banking. Other industries attracting foreign investment are trade, information and communication, and construction. The FDI inward flow for 2021 was US$1,914 billions.
Frequently Asked Questions About Setting Up a Company in Hong Kong
1. Can a non-resident set up a company in Hong Kong?
Yes. Any individual can open a Hong Kong company, regardless of nationality. Foreign investors enjoy the same investment rights and obligations in terms of company establishment.
2. Does the company have to be located in Hong Kong?
Yes. The company needs to have a registered address in Hong Kong. Foreign companies may also choose to open a branch or representative office in the city. 3. How to open a bank account in Hong Kong?
A bank account is required for companies incorporated in Hong Kong, but is not mandatory for companies whose principal place of business is not in Hong Kong. 4. What are the basic steps to set up a company in Hong Kong?
Select the company type, select the company name and get approval from the Registrar of Companies, then apply to the Registrar for registration of a new company in person or through the electronic portal. Our company registration specialists are on hand to assist you throughout this stage. 5. What is the minimum share capital in Hong Kong?
There are no specific requirements, however, companies with a share capital must state the capital and initial shareholding in the Articles of Association. Many investors decide to open a private limited liability company in Hong Kong because this business form does not have onerous requirements for minimum share capital. This also extends to other business forms, most notably partnerships, sole proprietorships and other businesses.
6. What documents are required to register a company in Hong Kong?
The Articles of Association must contain certain mandatory information about the company and its organization, including information about its members. The liabilities of shareholders and their contributions are also included in this document. 7. How fast can you set up a company in Hong Kong?
The time frame for an application filed online with the Companies Registry is 24 hours. Contact our company formation consultants for professional advice to ensure your business complies with the law. 8. Do I need special permits and licenses in Hong Kong?
Yes. Businesses that sell or prepare food (restaurants and other food establishments), businesses that sell non-food goods (electrical appliances, firearms, chemicals, materials, etc.), and companies that provide a variety of services (entertainment, construction, education, financial services, land and air transportation and others).
In addition, companies engaged in activities related to the provision of nursing home care services and companies engaged in activities that have an impact on the environment need to obtain more licenses than regular business registration licenses. These special permits or licenses are issued by the relevant Hong Kong authorities and one of our consultants can help you apply for these. 9. What taxes do I need to pay in Hong Kong?
Profits tax is 16.5% on income earned in Hong Kong and 15% for unincorporated businesses. Other taxes for Hong Kong companies include property tax, and stamp duty. There are no social security/social insurance, payroll, gift, or capital taxes, and no withholding taxes on dividends and interest. Duties are imposed on many products, the most important of which are alcohol and tobacco.
One of our consultants specializing in Hong Kong company formation can provide you with complete details on the tax system and double taxation relief.
10. What are the requirements for starting a private limited liability company?
In order to set up a private limited liability company in Hong Kong, its founders need to draft the Articles of Association. At least one shareholder, one director and one secretary (individual or company, resident in Hong Kong) are required to establish this legal form.
When a company has only one shareholder/or director, he cannot act as company secretary. The number of members cannot exceed 50, but there is no restriction on nationality. Members are liable only to the extent of the invested capital. A Hong Kong registered company must have a registered address, which is a physical address rather than a post office box. If you need assistance setting up a limited liability company in Hong Kong, our team is here for you. 11. Is it mandatory to register for VAT in Hong Kong?
Value Added Tax is one of the taxes not applicable in Hong Kong. 12. What are the requirements for opening a bank account in Hong Kong?
Applicants must submit a set of documents when opening a corporate bank account. These will include the following:
An application form for opening a corporate bank account filled and signed by the authorized persons,
A certified copy of the Certificate of Incorporation and a certified copy of the Business Registration Certificate, a certified copy of the Article of Association of the company,
Copies of the identity detail of the company's shareholders and, if necessary, proof of residence; sample signatures are also required.
Actual documents will vary depending on the bank selected. The company's lawyer or CPA can authenticate the documents.
13. What are the conditions for hiring staff in Hong Kong?
Companies can employ different methods to recruit the right candidates in Hong Kong. Working with a recruitment agency is a common method used by larger companies, but there are other options such as online portals for different types of jobs, print media announcements or job fairs.
Employers in Hong Kong need to comply with occupational safety and health as well as minimum wage and other benefits requirements. Part-time and full-time employees need to participate in the mandatory provident fund, which is handled by the employer.
14. Why is Hong Kong a good place to do business?
The fact that the city is a special administrative region of China has not affected its political and economic stability. Hong Kong is the main gateway to mainland China, which is an important location advantage. The following are the main reasons for setting up a company in Hong Kong:
Strategic location in Asia
Countless business opportunities
Tax regime beneficial to companies and individuals
High standard of living
Hong Kong is not a tax haven in the traditional sense like Belize or Seychelles, but it is a jurisdiction with low corporate taxes, which is important for it to be able to establish itself as a financial and business hub. A large number of double tax treaties also include information exchange provisions, which ensure commercial transparency and protect investors from double taxation.
Contact our Hong Kong company formation experts for more details on setting up a company in Hong Kong.