Comprehensive Guide to Get Through Your Business in Hong Kong Hassle-free
Being the world’s freest economy, it is no doubt that Hong Kong has been attracting investors from all over the world. The comprehensive economic structure of Hong Kong including the infrastructure, reach and convenient tax systems have arguably made Hong Kong the easiest place to run business in the world. However, if you wish to start a company in Hong Kong, you should have a clear idea of setting up a new company in Hong Kong. So, today we discuss how to set up a business in Hong Kong.
You Need Help from a Professional Accounting Firm to Set Up a Business in Hong Kong
You need to know this first before you move on towards other steps of setting up a new company in Hong Kong. Remember that the company registration procedure in Hong Kong is very simple compared to other countries. Anyway, especially if you are not from the area, you will find a lot of difficulties and complexities regarding the registration process because of various reasons such as language barrier or lack of adequate information. Again, you might need to be physically present in Hong Kong to register your own business if you want to do it yourself. So, you must consider working with a company registration service. For example, at 3E Accounting. When you work with us, all you need to do is finalize on the type of business and send us your documents, and we will register your business while you sit back formulating your business plan.
Basically, the first thing you need to set up a business in Hong Kong is a proper idea of the types of business entities in Hong Kong. These are the types of companies in Hong Kong:
A sole proprietorship is run by a single individual. The person is liable for every loss or debt but has the rights to every profit made by the company. The company doesn’t stand as a separate legal entity. Thus, the owner’s fund is not separate from the company’s fund. A Sole proprietorship is the simplest type of company in Hong Kong is suited especially for small businesses.
There can be a maximum of 20 partners in a Hong Kong partnership company. A partnership is not very different from Sole proprietorship in the sense that it doesn’t stand as a separate legal entity. Thus, the funds of the company are not separate from the funds of individual partners. Depending on the contribution and rights, there are two types of partnerships in Hong Kong:
General Partnership: In a general partnership, every partner makes an equal investment and thus, have equal rights to profit and important business decisions.
Limited Partnership: There are limited partners, i.e. they don’t make as many contributions as general partners. Thus, they can’t make decisions and their profit depends on their investment.
Here are types of limited companies you can find in Hong Kong:
Private Limited Company
The private limited company is the answer for many who are wondering how to start a business in Hong Kong. It is the most popular choice of business structure in Hong Kong and has various advantages. Here are the requirements to open a private limited company in Hong Kong:
- Director – You need at least one director who can be of any nationality. The individual should be at least 18 years old and should not be bankrupt. He/she should have a clean police record and can be residing in any part of the world.
- Shareholder – A private limited company in Hong Kong can have up to 50 shareholders. They can be of any nationality and 100% foreign shareholding is allowed. Directors can be shareholders too, there is no rule stopping that.
- Company Secretary – A Hong Kong private limited company must hire a company secretary. The company secretary should be residing in Hong Kong and should have the right idea of running an office. Make sure that in the case of a sole director or a sole shareholder, the same person can’t act as a company secretary. Corporates in Hong Kong also have a choice of hiring a secretarial service given that the company is based on Hong Kong. So, if you are looking to outsource your secretarial service, then you can contact 3E Accounting for the best secretarial services.
- Share capital – There isn’t any assessment to minimum share capital, but as a rule of thumb, we could say that startups have a share capital between HKD1,000 to HKD10,000.
Public Limited Company
The public limited company is bigger than a private limited company and to be frank, it is outside the domain of this article. However, what you need to know is that in a public limited company, the shares are open for the public to buy. Mostly private limited company turn to a public limited company when they grow.
Choose Your Company Name
You should select a company name such that it is not vulgar and isn’t too similar to other existing companies. Your name should also represent the business. We recommend you come up with two to three names for your company.
Do You Need a Registered Address?
Yes, you will need a registered address for your business. It should be a physical address and can’t be P.O. Box Number.
Other Things that You Need to Register a Company in Hong Kong
- Copy of Articles of Association for the company.
- An application form which includes the company name, registered address, and information about the type of business venture. Here you will need to show that your business idea is viable and has a positive impact on the Hong Kong economy.
- Information about the directors, shareholders, and secretary.
- Passport/ Identity Card of the directors, shareholders, and secretary.
Still wondering how to set up a business in Hong Kong? Need some help with Hong Kong company incorporation? Either way, contact 3E Accounting, we will be glad to help you in the best way we can.