Stage 1: Pre-registration essentials
1.1 Select a business structure
The first thing to do when setting up a company is choosing the right business entity. The entity must be based on your business objectives and goals. Therefore, researching each entity is recommended to avoid any mistakes.
Business entities in Hong Kong include:
- Branch office
- Sole proprietorship
- Company limited by guarantee
- Company limited by shares
1.2 Choose a company name
Once you have selected the appropriate business structure, you will then need to choose a company name. The name can be in English, Chinese or both. You will not be able to use company names that have already been used by other companies. A company name search can be conducted through the Cyber Search Centre or Company Search Mobile Service. The Companies Registry also provides guidelines on the registration of Hong Kong company names.
1.3 Decide on officers and shares of your company
Before you can register your company, you will need to appoint officers as the registration process requires you to provide their information.
- Minimum: one person
- Maximum: unlimited
- At least one director must be a natural person
- Either natural persons (from 18 years old) or body corporates (allowed under strict circumstances)
- Can be Hong Kong residents or non-residents
- Nominee directors are allowed
- Minimum: one
- Either natural persons (from 18 years old) or corporates
- Can be Hong Kong residents or non-residents
- Nominee shareholders are allowed
- 100% foreign ownership is allowed
- Sole director can act as a shareholder
1.6 Company secretary
- Mandatory by law
- Either a Hong Kong local individual or corporate
- Sole director cannot be the company secretary
1.7 Registered address
It is required to have a physical local address for company registration in Hong Kong as a P.O box is not allowed.
1.8 Share capital
- Minimum: HKD 1.00
- Maximum: unlimited
- Bearer shares not allowed
Each year many investors are showing their interest to set up a business in Hong Kong because of its variety of benefits. The benefits include its economic freedom that currently ranks at second place according to the 2020 Index of Economic Freedom.
This is an index published by the Heritage Foundation and the Index measures the impact of liberty and free markets around the globe, and the 2020 Index confirms the formidable positive relationship between economic freedom and progress. Supportive government policies, 100% foreign ownership, low tax rates, talented labour force and excellent infrastructure all combine to give Hong Kong this high rank.
Stage 2: Business registration
2.1 Registering your company
You will have to register your business in Hong Kong with the Companies Registry which is responsible for the incorporation of your company. Documents can be delivered either through the e-Registry or CR eFiling mobile application or in hard copy form at the Shroff on the 14th floor of the Queensway Government Offices. These documents include:
- Incorporation form – Form NNC1 (company limited by shares) or Form NNC1G (company not limited by shares)
- A copy of the company’s articles of association
- A notice to Business Registration Office (IRBR1)
- A copy of passports and residential address proof for foreigners
- A copy of Hong Kong ID cards for Hong Kong residents
- Copies for all company documents for corporate shareholders
Stage 3: Post-registration
3.1 Certificate collection
Once your application is approved, you will have to download or collect the Certificate of Incorporation and Business Registration Certificate which will be issued in electronic form or hard copy form, depending on the way you delivered the documents.
3.2 Application delivered in electronic form
Electronic certificates will generally be issued within one hour. The documents will be sent to the inbox of the email address of the application sender.
3.3 Application delivered in hard copy
Certificates in hard copy will usually be issued within four working days. When the certificates are ready, the person will be notified by fax. The certificates will need to be collected at the Registry, and the person who collects the certificates will have to present the Notification of Collection of Certificate(s) and the identification document or company chop. If a representative is there to collect the certificates, the person who delivered the documents will have to present a written authorisation and identification document in the written authorization.
If you engage Acclime to incorporate your company, we will take care of all of these processes.
3.4 Opening a corporate bank account
Your next step is opening a company bank account. We recommend researching before choosing a bank in order to be able to select the most suitable bank. Once you have selected your desired bank, you will have to prepare the documents below and visit the bank to hand them over in person.
- Registered address and contact information of the company and business owners
- All documents required in the bank’s application form
- Incorporation documents of the company
- Certified true copy of the company’s identification documents
- Proof of business
- Details of beneficial owners for nominee shareholders/stockholders of a company
- Certified true copy of the company’s Business Registration Certificate
3.5 Get permits and licenses
Next is obtaining permits and licenses your business entity may require. There are a variety of permit and license types that depend on the nature of products and services of your business. See the following resources to help determine which licenses or permits you will be needing:
When you have submitted the license application, you can track the status on the Online License Services.
3.6 Determine your tax obligations
Your tax obligations will vary depending on the scope of charge, exemption, deductions and more. For companies generating profit inside of Hong Kong, the current profit tax rate is 8.25% on the first HKD 2 million of profits and 16.5% on everything afterwards. There is no capital gains tax. You can follow updates and information regarding the rules and regulations on the GovHK website.
3.7 Annual filing requirements
You are obliged to follow the rules and regulations regarding annual filing of your company.
The requirements you need to follow include:
- File an annual return each year
- Tax return must be filed to the Inland Revenue Department every year, along with audited accounts
- Requirements for filing an annual report vary based on the business entity, a Non-Hong Kong Company or a Local Limited Company
Setting up a company in Hong Kong is quite a straightforward process. This guide will be able to prepare you in advance of setting up a company and make sure you have all requirements needed. Acclime specialises in making your business set up easy and hassle-free, do not hesitate to contact if you need our support and advice on starting a Hong Kong company.