Hong Kong has consistently been ranked as one of the world’s freest economies, making it a prime destination for foreign entrepreneurs. Serving as a gateway between the West and Mainland China, it offers a straightforward tax regime, making it attractive for startups. A key advantage is the ability to set up and run a business without having to reside in or even visit Hong Kong. This flexibility continues to draw international business owners looking to take advantage of Hong Kong’s economic freedoms and strategic location.
Step-by-Step Guide to Company Setup in Hong Kong
1. Understanding the Local Regulatory Landscape
The Companies Registry: Oversees all company registrations and regulatory compliance.
The Inland Revenue Department (IRD): Manages tax administration, requiring annual company tax returns to determine tax obligations.
2. Selecting Your Company Name
Choose a name in Chinese, English, or both, adhering to linguistic and legal guidelines.
Ensure the name is not already trademarked and consider registering it for protection.
If in English, the name must end with “Limited.” For a Chinese name, it should be in traditional characters and end with “有限公司.”
Naming Requirements | English Name | Chinese Name |
Ending Suffix | Limited | 有限公司 |
Legal Requirements | Must follow specific guidelines | Must be in traditional characters |
3. Choosing the Company’s Legal Structure
Foreign companies can choose from three main business structures:
Subsidiary Company
Branch Office
Representative Office
Each structure has distinct requirements and implications.
Entity Type | Description | Basic Requirements | Legal & Tax Implications |
Subsidiary Company | A private limited company, separate from the parent company, eligible for tax benefits and market access. | - Approval of company name - Local registered address - At least one director - Local resident company secretary | Treated as a Hong Kong resident company, eligible for tax exemptions. Liabilities are confined to the subsidiary. |
Branch Office | Operates as an extension of the parent company, not a separate entity. | - Company name approval - Local resident authorised representative - Place of business in Hong Kong | Subject to the same legal and tax requirements as local companies. Liabilities extend to the parent company. |
Representative Office | For market exploration without profit-making activities, no legal entity status. | - Register with the Inland Revenue Department - Obtain a Business Registration Certificate | No legal standing; limited to promotional and research activities. The parent company bears all liabilities. |
Comparative Analysis of Business Structures
Factor | Branch Office | Subsidiary | Representative Office |
Legal Entity Status | Yes | Yes | No |
Liabilities Extend to Parent Company | Yes | No | Yes |
Company Name Requirements | Same as parent company | Can be the same or different | Same as parent company |
Permitted Activities | Same as parent company | Can vary from parent company | Limited to non-profit activities |
Registration Timeline | 14 Working Days | 5-7 Working Days | 1-2 Working Days |
Taxation as a Local Entity | Yes | Yes | Not applicable |
Annual Returns Filing Requirement | Yes | Yes | Not applicable |
Profits Tax Return Filing Requirement | Yes | Yes | Not applicable |
Audited Accounts Requirement | No (subject to conditions) | Yes | Not applicable |
Ability to Open a Hong Kong Bank Account | Yes | Yes | Yes |
Appointment of Officers | 1 authorised representative (HK resident) | 1 company secretary (HK resident), 1 director, 1 shareholder | 1 manager or chief representative from parent company |
4. Appointing a Company Secretary in Hong Kong
A local company secretary is mandatory, ensuring regulatory compliance and operational transparency.
5. Selecting the Registered Address
This address is essential for receiving official correspondence, often using the company secretary’s address.
6. Preparing & Submitting the Incorporation Documents
Documents Required:
NNC1 and IRBR1 Forms
Identification documents for directors and shareholders
Articles of Association
These must be submitted to the Companies Registry either online or in person, with a fee applicable.
7. Acquiring Necessary Permits and Licenses
Certain industries may require specific permits or licenses (e.g., restaurant, liquor, import/export licenses). Refer to the Trade and Industry Department’s website for detailed information.
Industry | Required License | Issuing Department |
Restaurant | General Restaurant Licence, Liquor Licence | Food and Environmental Hygiene Department |
Import/Export | Import/Export Licence | Trade and Industry Department |
8. Setting Up a Corporate Bank Account
Establishing a corporate bank account in Hong Kong requires operational proof, financial projections, and a physical visit.
Consider digital or virtual banks for a fully online process.
Incorporating a company in Hong Kong is a relatively simple process, particularly with the assistance of a reliable company registration service provider. Hong Kong's strategic location and business-friendly environment make it an attractive destination for foreign entrepreneurs.
Below is a consolidated view of the business structure comparison:
Entity Type | Legal Entity Status | Liabilities Extend to Parent | Activities Allowed | Taxation | Registration Timeline |
Subsidiary | Yes | No | Profit-making activities | Local taxation | 5-7 Working Days |
Branch Office | Yes | Yes | Same as parent company | Local taxation | 14 Working Days |
Representative Office | No | Yes | Market research & promotion | Not applicable | 1-2 Working Days |
Woodburn Accountants & Advisors is one of China’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.
Talk to an expert
Schedule a 30-mins complimentary, no-obligation call to see how Woodburn can help you. Book a call with our Head of Business Advisory - Kristina Koehler-Coluccia.
Topics we can advise on include:
Company Registration
Cloud Accounting & Financial Reporting
Cloud Payroll Services
Tax & Audit Services
Recruitment
Employer-of-Record
Visa Application
Trademark Registration
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