Hong Kong is one of the most business-friendly cities in the world, attracting global entrepreneurs and companies. In 2023, 132,246 new companies were registered in Hong Kong, compared to 70,402 in Singapore. With favorable tax regimes, a strategic location in Asia, and a highly skilled workforce, it makes sense for businesses to set up a company in Hong Kong.
This guide will walk you through the necessary steps, requirements, costs, and tips for setting up a company in Hong Kong, leveraging our experience from incorporating hundreds of companies.
Why Set Up a Company in Hong Kong in 2024?
1. It’s Straightforward and Has Low Set-Up Costs
Company registration in Hong Kong is fast and cost-efficient. You can get a business registration certificate from the Hong Kong Companies Registry within a few days, and the government fees for incorporation are reasonable and transparent. Hong Kong offers a business-friendly environment with minimal bureaucratic constraints; it does not require minimum registered capital or a local director, and there is no restriction on foreign investment.
2. Vibrant Business Environment
Hong Kong is home to over 360,000 SMEs and is a dynamic hub for start-up growth and development. According to IMD’s World Competitiveness Center’s 2023 report, Hong Kong ranks among the world’s top ten countries with a competitive economy. The Hong Kong Government supports innovation and technology development, allocating HKD 500 million in 2023 to launch a Digital Transformation Support Pilot Programme for SMEs.
3. Business-Friendly Taxes
Hong Kong has a two-tiered profit tax rate for corporations with an exemption for the first HKD 3,000 profit in 2024. Incorporated companies pay 8.25% tax on earnings up to HKD 2 million and 16.5% on any part of the profits over HKD 2 million. Additionally, it has a territorial tax regime, meaning there is no corporate tax for companies conducting their business outside Hong Kong.
4. No VAT or Tax on Capital Gains
Another significant benefit of setting up a company in Hong Kong is the absence of Value-Added Tax (VAT) or Goods and Services Tax (GST). Profits from selling an asset, such as property or shares, are also not subject to capital gains tax.
Steps to Set Up a Company in Hong Kong
Step 1. Get Familiar with Local Organizations and Institutions
The Companies Registry: Responsible for the incorporation of companies in Hong Kong, ensuring compliance with corporate laws and regulations following the Companies Ordinance guidelines.
The Inland Revenue Department (IRD): Handles the administration of taxes and duties. You must file your company tax return with the IRD every year.
Step 2. Choose Your Company Name
Check Availability: Ensure the name is available on the Hong Kong Company Registry’s website.
Check Trademarks: Verify that your company name is not trademarked in Hong Kong or other regions using the Intellectual Property Department’s Online Search System.
Trademark Your Company Name: Register your company name as a trademark at the Hong Kong Intellectual Property Department.
Step 3. Choose the Legal Entity of Your Company
There are three main types of business entities in Hong Kong:
Public and Private Limited Company
Sole Proprietorship
Partnership
A limited company is the most popular and common type of company structure due to limited liability, ease of capital growth, and straightforward share transfers.
Step 4. Appoint a Company Secretary
All companies in Hong Kong are required to have a local company secretary, who ensures regulatory compliance and operational transparency. The company secretary can be an individual Hong Kong resident or a certified company. It is recommended to choose a qualified company secretary with a TCSP licence.
Step 5. Select the Registered Address of Your Company
Your company's registered address is where governmental departments will send correspondence. Using your company secretary’s address as the registered address is common and recommended to ensure you receive all official communications.
Step 6. Prepare the Incorporation Documents
Required documents for company incorporation:
NNC1 and IRBR1 Forms: For companies limited by shares.
Identification Documents: Copies of the directors’ and shareholders’ ID cards or passports.
Articles of Association: Outlining the company's internal governance rules.
Step 7. Submit to the Companies Registry
Submit the incorporation documents via:
Online submission through e-Registry Portal
Mail to the Companies Registry’s address
In person at the Shroff Counters
Within 2 to 6 business days, you will receive the Certificate of Incorporation and Business Registration Certificate.
Step 8. Pay the Government Fee
Incorporation fees for Hong Kong private limited companies:
Online Application: HKD 1,545
Hard Copies: HKD 1,720
1-Year Business Registration Certificate: HKD 2,150
3-Year Business Registration Certificate: HKD 5,650
Step 9. Get Relevant Permits and Licences (If Necessary)
Some businesses, such as restaurants and money service operators, need specific licences. Check the Trade and Industry Department website for required licences and permits.
Step 10. Keep Up With Your Taxes & Financial Reporting
The Companies Registry will report your company's existence to the IRD, but it is your responsibility to maintain financial reporting. Your company secretary should handle reporting and tax notifications.
The Easiest Way to Set Up a Company in Hong Kong
Setting up a company in Hong Kong can be a tedious process if it is your first time. Woodburn offers a Hong Kong company registration service that simplifies the process, including:
Pre-Incorporation Services: Verification of company name availability, preparation of incorporation documents, and application submission.
Post-Incorporation Services: Company secretary services, registered business address, significant controller register, and government fees.
FAQ's
Why should I set up a company in Hong Kong?
Hong Kong offers a straightforward and cost-efficient setup process, a vibrant business environment, business-friendly taxes, and no VAT or capital gains tax, making it an ideal location for businesses.
What are the key steps to setting up a company in Hong Kong?
The key steps include getting familiar with local organizations, choosing a company name, selecting the legal entity, appointing a company secretary, selecting a registered address, preparing incorporation documents, submitting to the Companies Registry, paying government fees, obtaining relevant permits, and keeping up with taxes and financial reporting.
Who can be my company secretary in Hong Kong?
A company secretary can be an individual Hong Kong resident or a certified company. It is recommended to choose a qualified company secretary with a TCSP licence.
What documents are required for company incorporation in Hong Kong?
The required documents include NNC1 and IRBR1 Forms, identification documents of directors and shareholders, and the company's Articles of Association.
How do I ensure my company name is unique in Hong Kong?
Check the name's availability on the Hong Kong Company Registry’s website, verify it is not trademarked using the Intellectual Property Department’s Online Search System, and consider registering it as a trademark.
Are there any specific licences required to operate a business in Hong Kong?
Some businesses need specific licences, such as restaurant licences and money service operator licences. Check the Trade and Industry Department website for required licences and permits.
How can I simplify the company setup process in Hong Kong? Using a company registration service like Woodburn can simplify the process by handling pre-incorporation and post-incorporation services, including document preparation, application submission, and company secretary services.
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.
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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
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Tax & Audit Services
Recruitment
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