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A 7-Step Guide to Setting Up a Business in HK

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Hong Kong has been an attractive city for many entrepreneurs to establish their businesses due to its simplified incorporation requirements and processes. You can set up and run your business within 48 hours, which is an amazing option for businesses. Additionally, its business-friendly tax system is a big reason why huge corporations like PepsiCo, Amazon, Google, and others are investing in Hong Kong (HK). With its open-oriented market, HK accepts almost all kinds of businesses, which encourages investors to start their business there and to be close to China and other Asian countries which are considered a huge market for any business. If you were wondering how to set up a business in HK, here is a 7-step guide to help you.

1. Determine Company Type

A lot of things must be determined before applying to open a business in Hong Kong. First, decide the company type, whether it is Limited Liability Company (LLC), or Sole Proprietorship [see the difference between the two], Partnership, Branch Office, or Representative Office. If an LLC, you must also determine if it will be a:

  • Private Company Limited by Shares
  • Public Company Limited by Shares
  • Company Limited by Guarantee

You should be aware of the strengths and weaknesses of each type, but most foreign and local entrepreneurs chose LLC Private Company Limited by Shares.

2. Name the Company

The Hong Kong Companies Registry (CR) has set a few standards on how the company’s name should be, and if you don’t comply with the standards, they have the right to change it. If the company name is in English, it must end with “Limited”, and if it is in traditional Chinese, it must end with “有限公司”. It can have an English name and a Chinese name but not a combination of letters. You can contact a company registration agency to check the availability of the name you want.

3. Create the Company Structure

No matter the structure of your company, it must comply with the requirements of the CR. You should specify the number of directors and who they are, with a minimum of one director and without a maximum limit. The number of shareholders mustn’t exceed 50 and should be no less than one person. A company secretary should be a Hong Kong local or corporate. Finally, you should have a registered address and a share capital.

4. Submit Your Application

Once you have decided on all of the previous steps, submit the required documents to the CR. The required documents include the Hong Kong application form, a copy of the Articles of Association, a copy of ID for foreigners and locals, and copies of all company documents for corporate shareholders. Many professional firms will offer their service in setting up a company in Hong Kong even without going there. All you have to do is send them personal documents through email. However, the process may take up to 5 business days.

5. Obtain Business Licenses and Permits

Though most businesses are allowed in Hong Kong, some types require permits and licenses to operate. You must apply for a license or permit within one month after setting up the company and it will take around 2-8 weeks to get it. You get the licenses and permits from a department of the Hong Kong government corresponding with your business. For example, if you are opening a restaurant, you will apply for a license at the Food and Environmental Hygiene Department.

6. Open a Corporate Bank Account

You can open a corporate bank account in any country, but it is recommended to open in the same country your business operates. However, Hong Kong banks require the presence of directors at the business location. The documents required to open a corporate bank account are the same as any other bank in any country.

7. Commit to Annual Maintenance Filings

Any company in Hong Kong must oblige to the ongoing compliance set by the CR which includes:

  • Annual renewal of the Business Registration Certificate
  • Annual General Meeting
  • Annual Return with the CR
  • Annual tax return with the IRD
  • Employer’s return with the IRD

Setting up a company in Hong Kong is easy once you know what is required from you. You must ensure that you know the company type, settle on a name, and create a structure to get ready for the application process. Once you have submitted your application, all you need to do is obtain necessary licenses or permits, open a corporate bank account, and commit to annual maintenance filings to avoid unexpected fines from the government. Hong Kong is the destination for countless entrepreneurs due to its company-friendly taxes, financial market, and the simplicity of forming a company.

Application, Bank Account, Business, Company Type, Employment, Guide, Hong Kong, Maintenance Filings, Name, Setting up a Business, Structure, tips

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