How to register a company in HONG KONG in 2023
Since 2003, Healy Consultants Group PLC has assisted our Clients to establish their company in Hong Kong. Our services include i) Hong Kong company setup services; ii) corporate bank account opening services in Hong Kong and abroad; iii) assistance to open HK merchant account and secure corporate finance; iv) employee recruitment and relocation strategies and v) office rental solutions in Hong Kong.
Popular business entities in Hong Kong
| Operations and logistics | Resident company | Offshore company | Offshore trust | PLC | Branch | RO |
|---|---|---|---|---|---|---|
| Bank signatory must travel? | Yes | Yes | Yes | Yes | Yes | Yes |
| Doing business in HK permitted? | Yes | Yes | Yes | Yes | Yes | No |
| Allowed to sign contracts with local Clients? | Yes | Yes | Yes | Yes | Yes | No |
| Allowed to invoice local Clients? | Yes | Yes | Yes | Yes | Yes | No |
| Can rent local office premises? | Yes | Yes | N/A | Yes | Yes | Yes |
| Allowed to import raw materials? | Yes | Yes | No | Yes | Yes | No |
| Allowed to export goods? | Yes | Yes | No | Yes | Yes | No |
| Accounting and tax | ||||||
| Corporate tax on local income? | 16.5% | 16.5% | 16.5% | 16.5% | 16.5% | Not allowed |
| Corporate tax on foreign income? | 0% | 0% | 0% | 0% | 0% | Not allowed |
| Corporate bank account | BOC HK | HSBC HK | DBS HK | Statrys HK | Fubon Bank | OCBC Wing Hang |
| Statutory audit required | Yes | Yes | No | Yes | No | No |
| Annual tax return to be submitted? | Yes | Yes | No | Yes | Yes | Yes |
| Access to DTAAs? | Yes | Not all | No | Yes | Yes | No |
| Hong Kong tax on dividends distributed to foreign shareholders? | No | No | No | No | No | No |
| Company law | ||||||
| Issued share capital required? | US$1 | US$1 | US$1 | US$1 | None | None |
| Resident director required? | No | No | Resident trustee | No | No | No |
| HK shareholder required? | No | No | No | No | No | No |
| Minimum number of directors? | 1 | 1 | 1 | 1 | 1 | 1 |
| Minimum number of shareholders? | 1 | 1 | 1 settlor | 1 | Parent company | Parent company |
| Individual shareholders allowed? | Yes | Yes | Yes | Yes | No | No |
| Corporate director(s) allowed | No | No | Yes | Yes | Yes | Yes |
| Corporate shareholders allowed? | Yes | Yes | Yes | Yes | Yes | Yes |
| Public register of shareholders and directors | Yes | Yes | No | Yes | Yes | Yes |
| Immigration | ||||||
| Can the entity hire expatriate staff? | Yes | Yes | No | Yes | Yes | Yes |
| How long to get work permit approved | 3 months | 3 months | N/A | 3 months | 3 months | 3 months |
| Fees and timelines | ||||||
| How long to set the entity up? | 1 week | 1 week | 4 weeks | 3 weeks | 2 weeks | 2 weeks |
| How long to open corporate bank account? | 4 weeks | 4 weeks | 4 weeks | 4 weeks | 4 weeks | 4 weeks |
| Estimate of engagement costs | US$10,105 | US$10,105 | US$16,000 | US$10,105 | US$14,005 | US$10,600 |
| Draft invoice | View invoice PDF | View invoice PDF | View invoice PDF | View invoice PDF | View invoice PDF | View invoice PDF |
Advantages and disadvantages of doing business in Hong Kong
Advantages
- Ease of doing business
A Hong Kong company can be easily set up in less than a week. Even though the process for corporate bank account opening is challenging, this can be solved by purchasing a ready-made HK shelf company that already has a bank account. - Taxation
Hong Kong corporate tax rate is 16.5%, which is one of the lowest in Asia. Offshore companies do not have to pay any taxes in Hong Kong. - Excellent business environment
Considered as one of the least corrupt countries, Hong Kong is a leading financial center whose regulation does not restrict foreign investment nor income repatriation. - Hong Kong is an ideal base for e-commerce activities. The Hong Kong economy is free, entrepreneurial and open to innovation. Furthermore, Hong Kong has a vibrant local market where start-ups can be bought, sold, merged and raise capital.
- A Hong Kong company and bank account is the perfect solution to conduct global business while enjoying zero tax on profits and dividends.
- Hong Kong corporate bank accounts i) are available in multiple currencies, each with its own IBAN and SWIFT numbers ii) can directly receive payments from Amazon, PayPal, WeChat, eBay and Shopify iii) can normally be opened in less than a week.
- Hong Kong is a top global financial centre after London and New York. As a result, Hong Kong’s banking system is sophisticated and supports international business and trade.
Disadvantages
- Strict regulations
It is getting more complicated to register a company as a foreigner because i) at least 1 individual resident director is required; ii) all shareholders and directors have to travel to Hong Kong for bank account opening and iii) certain nationalities are not allowed to register a company in Hong Kong. - High property cost
The cost of an office rental can affect the company’s total net profit as the property price is very expensive in Hong Kong. - Tighter banking restrictions
Hong Kong banks now require Hong Kong companies to have more local substance before they will approve a multi-currency corporate bank account. Examples of local substance include i) business relationships with Hong Kong customers ii) a physical office in Hong Kong and iii) employees in Hong Kong. - All Hong Kong banks require the Clients to travel to their branch in Hong Kong for a one-hour KYC meeting, before approving the corporate bank account opening for their Hong Kong businesses. This requirement is non-negotiable, even during the current Covid-19 pandemic and related travel restrictions.
- Starting from 2021, it is more common for profitable Hong Kong offshore companies to suffer a tax audit from the Hong Kong IRD. As always, our In-house Accounting and Tax Department assists our multi-national Clients’ to timely and accurately complete this statutory audit; the entity remaining as legally tax exempt.
- Ease of doing business
Typical Hong Kong engagement steps and timeline
Typical Hong Kong engagement steps
Hong Kong private limited company can be incorporated within 1 week with 1 director and 1 shareholder. The minimum paid-up share capital required is US$1.
- Check company name availability with the Companies registry and reserve a company name;
- Register the identity of all directors and shareholders;
- Submit company incorporation application to the Companies registry and Inland Revenue Department;
- Submit IRBR1 business registration form to complete tax registration;
- Open a corporate bank account;
Typical Hong Kong engagement timeline
StartEngagement Planning1 week
Company incorporation1 weeks
Corporate bank account approval4 weeks
Corporate internet banking approval1 week
Engagement completion1 week
8 weeksCompare timelines with other type of businesses in Hong Kong
Additional support services
Opening a corporate bank account for a Hong Kong company
Healy Consultants Group PLC recommends these 10 banks i) HSBC; ii) DBS; iii) Citibank; iv) BNP Paribas; v) Deutsche Bank; vi) United Overseas Bank; vii) Bank of East Asia; viii) Dah Sing Bank; ix) Hang Seng Bank; and x) OCBC Wing Hang.
Opening a corporate bank account in Hong Kong has become more complicated as banks have tightened their regulations to filter out any possibility of money laundering or terrorist financing. The bank officer will physically meet all bank signatories, including all the shareholders and directors of the company.
Engaging a professional service provider will increase bank account approval success rate. Our fee for this service will be US$4,950.
Hong Kong accounting & tax considerations
0%corporate tax for non-resident companies
16.5%corporate tax for resident companies
0%VAT rate in Hong Kong
0%goods and services tax
1st Aprilfiling deadline for corporate tax return
37signed double taxation treaties
Hong Kong visas
“Entry for investment” visas
All foreign entrepreneurs, except certain nationalities, will be required to obtain this visa to be self-employed in Hong Kong.
“Employment as a professional” visas
Employers are required to apply for employee visas when hiring foreign employees. There are 3 sub-categories i) “IANG” for foreigners who have graduated from recognized Hong Kong institutions; ii) “ASMTP” for employees from mainland China; iii) “GEP” for talented foreigners who have neither graduated from local institutions nor are from mainland China.
Residence visas
This visa is suitable for foreign entrepreneurs who wish to relocate to Hong Kong.
Hong Kong renewal requirement
Since 2003, Healy Consultants Group PLC assists our multi-national Clients to timely, accurately and completely discharge their annual legal, accounting and tax obligations. This web page will help you understand annual renewal process.
Frequently asked questions
How to start a company in Hong Kong as a foreigner?
Establishing a business in Hong Kong as a foreigner is a straightforward process that can be done within a week.
The main steps to setup a business in Hong Kong as a foreigner are:
- Decide a unique company name which adheres by the guidelines provided by the Companies Registry. You can check the availability of the name online with the Companies Registry;
- Prepare the company’s constitution;
- Confirm i) the corporate structure; ii) the share capital and the value of the shares; iii) the registered address; and iv) the company secretary;
- Notarize the passports of the directors and shareholder with a Hong Kong public notary and sign all incorporation documents;
- Prepare these Hong Kong Company documents: i) incorporation form NNC1; ii) articles of association; iii) IRBR1 business registration form notice; iv) notarized copy of passport and proof of address for all directors and shareholders; and v) annual returns to the Commissioner of Inland Revenue;
- Submit the complete incorporation package to the Companies Registry and the Inland Revenue Department (Hong Kong tax office) for tax registration;
- Within 1 week of submitting the above documents, if no issues with the filling of the forms, the company would be legally incorporated in Hong Kong.
What are the types of business entities that can be setup in Hong Kong?
The 6 main types of business entities that can be setup in Hong Kong are:
- Resident company;
- Non-resident limited company;
- Trust;
- Public limited company;
- Branch office;
- Representative office.
Each business entity is meant to have different business goals and they do have different set up requirements. The table below outlines the major differences:
Operations and logistics Resident company Offshore company Offshore trust PLC Branch RO Bank signatory must travel? Yes Yes Yes Yes Yes Yes Allowed to import raw materials? Yes Yes No Yes Yes No Allowed to export goods? Yes Yes No Yes Yes No Requirement of a resident Director No No Resident trustee No No No Access to DTAAs? Yes No No Yes Yes No How much does it cost to incorporate an LLC in Hong Kong?
Healy Consultants Group PLC’s fees for company registration in Hong Kong amounts to US$10,105 which includes the following services: i) company incorporation; ii) corporate bank account opening; iii) company secretary and legal registered office provision and iv) Government registration. For a more detailed breakdown, kindly refer to the attached invoice.
Is there any minimum paid up capital required to incorporate a company in Hong Kong?
No, there is no minimum paid up capital required for business registration in Hong Kong.
How to open a non-resident bank account in Hong Kong?
Hong Kong has a massive banking sector catering to the needs of both residents and non-residents of the jurisdiction. It is a pretty simple process to open a non-resident bank account in Hong Kong, that may take up to a maximum of 1 month.
The main steps to open a non-resident business bank account are:
- Make a list of all banks that your company is interested to board with. Research their bank account opening requirements and try to get an appointment with their front desk;
- Travel to Hong Kong. It is mandatory for all the members of the corporate structure, the directors and shareholders, to be physically present in Hong Kong for the interview to open the bank account;
- During the meeting, the company must provide the banks with these documents: i) Original proof of residence along with a certified copy in English of the same (should be less than 2 months old); ii) original notarised copy of Certificate of Incorporation; iii) original notarised copy of Business Registration Certificate; iv) original notarised copy of Article of Association; v) duly filled NNC1 form; vi) proof of the business if it is operational at present and vii) a detailed business plan that confirms the need for a Hong Kong bank account while the company is registered in another country;
- The above documents should be submitted to the bank along with an initial payment of the minimum deposit for bank account opening;
- Once the interview is completed, the Compliance Department will conduct their KYC checks. If the due diligence process is successful, then the bank account would be opened within the month.
Is it possible to change company name after incorporation?
Yes, it is possible to change the company name after incorporation.
The steps to be taken for changing an existing company name are:
- Pass a Special Resolution by the company to change its name after incorporation;
- Deliver a “Notice of Change of Company Name” by filling out Form NNC2 within 15 days after passing the Special Resolution either i) online on the e-Registry portal or ii) in hard-copy form at the Queensway Government Offices;
The name change will be effective from the date of receipt of the issued Certificate of Change of Name.
What are the restrictions when choosing a company name in Hong Kong?
The restrictions imposed whilst choosing a company name in Hong Kong are as follows:
- The company name needs to be unique and it cannot be the same as a name already existing in the Index of Company Names maintained by the Registrar of Companies;
- The company name cannot be identical to the body corporate incorporated or recognized under an Ordinance;
- The company name cannot be offensive, inappropriate or conflicting with the interest of the community;
- Only traditional Chinese characters can be used, and no combination of English letters/words and Chinese characters is possible.
What is a limited company limited by guarantee?
A Company that is Limited by Guarantee (CLG) is based on the principle that the members undertake to contribute to the assets of the company in the event of the business being shut down. Therefore, when a “Company Limited by Guarantee” liquidates, a member’s maximum obligation to the creditors of the CLG would be the sum which he/she had approved to pledge. This pledged amount is usually nominal.
What is an unlimited company in Hong Kong?
In an unlimited company, the legal liability on the owner of the company is not limited since all risks related to the operation of business as well as the liabilities are borne by the proprietor or partners, just as in a sole proprietorship. In the event of an unlimited company in Hong Kong turning bankrupt, the creditors have the authority to claim against the private assets of the proprietor or partners.
The table below briefly outlines the main differences between a limited company and an unlimited company in Hong Kong:
Factors Unlimited Company Limited Company Legal Liability of owner Unlimited Limited to the assets in the company Personal assets of the owner Not protected from business liabilities Protected from business liabilities Legal & maintenance work Straightforward Complex Is an office required to register business in Hong Kong?
Yes, a registered address is required to incorporate a company in Hong Kong. There is no requirement for a physical office space.
What licenses are required to start doing business in Hong Kong?
The Business Registration Ordinance in Hong Kong states that every person conducting business in Hong Kong must get their business registered within one month from the date of commencement of their business. Further, there might be other licensing and/or permits required to carry out their business in Hong Kong depending on the type of business.
To know the specific license required for your business in Hong Kong, you can visit this website.
How long does it take to incorporate in Hong Kong?
Business incorporation in Hong Kong is a straightforward process which can be achieved within 1 week, if there is proper planning and documentation in place.
Can a foreign investor open a trust company in Hong Kong?
Yes. Healy Consultants Group PLC can help foreigners open a trust in Hong Kong.
If I form a trust in Hong Kong, will it be considered a legal entity?
No, a trust company is not considered as a separate legal entity in Hong Kong.
Why should I set up a trust in Hong Kong?
Setting up a trust company in Hong Kong will help our Clients by i) protecting their assets and ii) acting as an investment vehicle where a trustee conducts the trust’s business on behalf of the beneficiaries.To find out about the procedures to set up a company in Hong Kong, please refer to our incorporation page.
If your Firm is interested in working with Healy Consultants Group PLC, please complete the 5-minute questionnaire below. Within a week, our Business Development Director will email revert to you with a draft partnership agreement.
