How to set up a company in Hong Kong? A complete guide to incorporate a business

Founding a business is a process that involves several steps, but one of the most important things to consider when starting a business is its location and any special tax rates that may apply. Hong Kong boasts some of the lowest tax rates in the world, with corporate tax set to reach a mere 16.5% by the end of 2024.¹ Tax rates are variable, and you can always check what the rate is at a given time with a simple Google search.

As a port city with easy transport links to mainland China, Southeast Asia, and the Pacific, Hong Kong is a highly desirable setting for enterprising founders. The location, combined with Hong Kong’s free economy and robust legal system, inspired by English common law, makes the region ideal for new business. Founders arriving from all reaches of the planet will discover that Hong Kong is rich with culture, history, and easy-to-access systems of trade and governance.

What are you waiting for? This step-by-step guide to setting up a business in Hong Kong is at your disposal.

Table of contents
Step 1: Choose the name of your company Step 2: Decide on the type of company Step 3: Appoint directors and a company secretary Step 4: Arrange a registered address of the company Step 5: Submit an application of company incorporation Step 6: Register the business with the Business Registration Office Step 7: Obtain other permits or licences

Step 1: Choose the name of your company

There are two main things to consider when choosing the name of your company.²

1. The Companies Ordinance specifically outlines against combined-language names. Although it is possible to have a Chinese business name along with an English business name, or the opposite, a company name can never mix characters, letters, and words within the same registered name. For the Hong Kong registration process, you will need to choose a single-language name to list.
2. Equally important, a business’ registered name cannot be the same as a pre-existing name in the Registrar’s Index of Company names. Even names that are too similar may be rejected. Companies can also face fines of up to HK$100,000 if their business name is too similar to pre-existing business names.

In order to check the name you are choosing before submitting your registration, you can use Hong Kong’s e-Search services under the Companies Registry's e-Services Portal at www.e-services.cr.gov.hk.

Step 2: Decide on the type of company

There are several different types of companies to set up in Hong Kong, and although the most common structure is a private company limited by shares, examining other set-ups is useful.³

• Limited Company (by shares): As a legal entity, this kind of private company may enter into contracts, gain assets, go into debt, and more, all in the name of the company rather than in the name of an individual.
• Limited Company (by guarantee): Guarantee members in this company set-up are not shareholders making investment. Rather, they agree to contribute a predetermined sum to cover the company’s liabilities if the company closes.
• Branch Office of a Parent Company: This business structure is suitable for branches of businesses previously registered outside of Hong Kong. In fact, these offshore-registered businesses are required to complete an additional registration as a Registered Non-Hong Kong Company within one month of being set up. The branch office is not a separate legal entity from the parent company.
• Representative Office: This sort of business cannot engage in profit-making activities, but is perfect for businesses looking into expansion to Hong Kong who are also exploring before making a larger investment.

Step 3: Appoint directors and a company secretary

When setting up your company in Hong Kong, you will need to consider who to appoint as a director and who to appoint as a secretary. This is something that foreign founders may struggle with, as their networks in Hong Kong may need further development. Each private limited company in Hong Kong requires at least one “natural” director (someone who ordinarily resides in Hong Kong) and one company secretary. Additionally, if there is only one director, then that one director cannot also be the company secretary. The rest of it is up to your discretion.³

Step 4: Arrange a registered address of the company

To remain compliant, your business will need a registered address. This address must be a physical address located within Hong Kong and an address where mail can actually be addressed. It must not be a P.O. Box address, as these are not allowed for this purpose.

Using a home address as a registered company address can be convenient, but it also exposes the home resident and business founder to difficulty. For example, if the residence is rented, the terms of the tenancy must accommodate a registered office address. Equally, using your home as your business address means that you can be found online. To preserve privacy, many people opt to use a different address. In cases where there is no physical office, some founders even make use of a mailroom service, which includes an office address and someone who manually posts the delivered items to a different, more convenient address.

Step 5: Submit an application of company incorporation

Submitting an application of company incorporation is simple and involves two parts: the company incorporation and the business registration. These occur simultaneously, and this section will detail the steps associated with company incorporation. There are two different ways to go about it:⁴

1. There is the 24-hour e-Services Portal of the Companies Registry (CR), which allows for an online application process.
2. There is also the hard-copy method, which requires that the applicant deliver their documents with the appropriate fees.

There are certain documents required for registration.

• For any company limited by shares, there is the necessary Incorporation Form (Form NNC1), whereas for any company not limited by shares, there is an equivalent form (Form NNC1G).
• For your submission, you will also need a copy of the company’s Articles of Association.
• Finally, you will need a Notice to the Business Registration Office (a form called IRBR1).

Step 6: Register the business with the Business Registration Office

Simultaneously to applying for company incorporation, you will register your business with the Business Registration Office. This registration must take place within one month of the application for company incorporation. In addition to the previously mentioned documents, you will provide the following to the Company Registry (CR):⁵

• A Notice to Business Registration Office (a form called IRBR1).
• A fee for business registration, which you can determine by examining the levy table available on the Inland Revenue Department website.
• An additional levy to the Protection of Wages on Insolvency Fund, a sum reaching either HK$150 or HK$450, depending on how many years the certificate is to remain valid, one or three years.

It’s worth noting that some concessions to these fees may be available at times.

Step 7: Obtain other permits or licences

Some businesses may need to obtain other licences before launching into operation. This depends largely on the nature of the business at hand. For example, import and export operations will require additional licences. Some specific goods for import and export need further registration. Please reference the website of the Trade and Industry Department for further details. You may find additional information related to the licensing of other businesses, including those outside of imports and exports, here. ⁶

Using the above seven steps, business founders in Hong Kong can start up with ease. For such a desirable location in East Asia, Hong Kong has a startlingly simple business set-up process. Choosing a name for your business, as well as assigning a business type and leadership structure, is the beginning of a simple process toward company incorporation and business registration. Setting up a company in Hong Kong is your gateway to profit and so much more.

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Sources:

1 GovHK: Tax Rates of Profits Tax
2 Companies Registry: Guideline on Registration of Company Names for Hong Kong Companies
3 InvestHK: Step 1: Decide on a Company Type and Name
4 InvestHK: Step 2: Incorporate a Company
5 InvestHK: Step 3: Register the Business
6 Companies Registry: How to register a new company?

Sources last checked on 16 Feb 2024