FAQs About the Importance of Business Licenses in Hong Kong
Acquiring a business license is an important phase while starting a company in Hong Kong. In this article, we look at the importance of business licenses in Hong Kong by answering some frequently asked questions.
Depending on the nature of your business, it is mandatory that you get a license in Hong Kong. However, many startup owners overlook this stage during registration. They just focus more on other things like the Memorandum and other documents that they somehow miss out on the permits. This unnecessarily increases the time required to start the company activities.
Why Do We Need Business Licenses in Hong Kong?
When a company starts, it has a certain responsibility towards its society and sector rather than just making money. For one, business licenses help the authorities recognize your company. They are also a way of saying that you are willing to be accountable for your actions.
Another importance of business licenses is that they help the authorities verify that you know what you are doing and you don’t want to harm the public with your procedures.
It’s just like getting a driving license; the state wants to make sure that you will keep yourself and your surroundings safe from any physical or environmental harms.
What Happens If We Don’t Get a Business License?
In Hong Kong, fortunately, only a few sectors require a business license. However, if you don’t get a license, it will ring the bells of trouble for your firm.
You will have to pay penalties and in extreme cases, the state may ask you to close your company. You will generally be able to reopen the venture once you get the licenses again. Sometimes, you may have to face a mandatory probation period.
Rarely, the court may not be willing to give you a business license ever again. This doesn’t happen a lot but still is a possibility so you have to be careful.
With that said, getting a license isn’t that difficult in Hong Kong. However, we recommend you take help from a lawyer or from your Hong Kong incorporation service provider. Always get a professional opinion to ensure that you have all the licenses to be on the safe side.
Who Gives Business Licenses in Hong Kong?
Depending on the nature and sector of your business, various authorities issue licenses and permits.
Importance of Business Licenses: Some Common Business Permits in Hong Kong
We discuss some business licenses in the region:
To run a restaurant in Hong Kong, you’ll need a General Restaurant Licence for the Good and Environmental Hygiene Department. The authorities will visit your premises before granting you the permit. Again, depending on the nature of the things you sell, you will need other licenses:
- You need a Liquor license if you wish to serve alcoholic drinks.
- A Karaoke Establishment Permit is a must when running karaoke machines.
- If you have open seating outside the restaurant, you need permission for outside seating accommodation.
- A bakery license allows you to sell baked items.
- A food factory license is needed if you want to manufacture and process things that people can eat outside your premises. However, it doesn’t apply for home packaging.
- Like in any other business, an import license allows you to import products like meat, poultry, wine, etc.
- A restricted food permit is required to sell restricted food in Hong Kong.
- Finally, you need a permit to sell food by a vending machine if you want to install one in your restaurant.
For a travel agency, you need a Travel Agent’s License issued by the Commerce and Economic Development Bureau. This allows you to sell transportation tickets, arrange hotel recommendations, and organize and package tours (individuals and groups). To apply for the license, a person should have a travel association membership and a travel industry council membership.
To set up an educational institute including nurseries, childcare centres, vocational centres, academic institutes like a school or even a college, tutorial centres, etc., you will need a Certificate of Registration of a School.
Starting a school is a lucrative business in Hong Kong but the requirements are very strict and streamlined. Everything, including your premises, syllabus, class sizes, textbook list, team members, etc. will be examined thoroughly. Thus, it is mandatory to work with a professional business advisor who can guide you through the registration.
Here are the licenses for a retail shop:
- For Cosmetics, Medical, and Drugs stores, you need a Listing Certificate of Class II/III and the Certificate of Registration of the Premises of an Authorized Seller. The Department of Health provides it.
- A Chinese herb store requires a Retailer License in Chinese Herbal Medicines from the Department of Health.
- To run a pet and accessories shop, you need the Animal Boarding Establishment License given by the Agriculture, Fisheries and Conservation Department.
Every trading firm in Hong Kong needs to take the import/export license if it is importing or exporting goods. Furthermore, there can be some special permits for controlled goods, which you need to take from the concerned authority of the goods you are trading.
Financial Services Company
Again, there are ranges of business licenses for financial services company:
- You have to get the Money Lenders License issued by the Companies Registry for a money lending company.
- To become an insurance broker, you need an authorization of insurance brokers by the Office of the Commissioner of Insurance.
- On the other hand, you need the Authorization to carry on an Insurance Business issued by the Office of the
- Commissioner of Insurance to start an insurance business.
- A pawnshop owner will need to get the Pawnbrokers license issued by the Hong Kong police force.
- A deposit-taking firm needs registration of Deposit-Taking Company (DTC) to Carry on Business oF Taking Deposits. The Hong Kong Monetary Authority issues it.
There are other financial service licenses as well. You can contact 3E Accounting Hong Kong for more information.
The importance of business licenses is inevitable wherever you decide to form a venture. These documents ensure that the person doing the business carries out their responsibility towards the economy and the society in the right way, apart from only running the company. There are a lot of business licenses in Hong Kong. Not getting the necessary ones will create problems for you, so you should work with a law firm or a Corporate Service Provider so you don’t miss out on the permits you need.