A Complete Guide to Start A Business in Hong Kong
Start a Business in Hong Kong
Hong Kong has a dynamic economic and has become a hub for the start-ups and starting Hong Kong limited company. Hong Kong is a shopping paradise and one of the most beautiful tourist destinations. Reasons like these make Hong Kong a great place to start a business and setup private limited company. Today, many investors dream to start a business in Hong Kong – but it isn’t easy as it sounds for starting a Hong Kong business. How to start a business in Hong Kong? There’s a lot of competition in Hong Kong, and your business plan should be great if it is to work. But the positive point to starting a business here is that the GDP of this cosmopolitan is rising high, and it is ranked as the 5th most top ecosystem in the world. We at 3E Accounting offer complete guidance to starting a business in Hong Kong, while you sit comfortably at your home.
Hong Kong is located in the heart of Asia which makes it an important country to make the trade and setup Hong Kong limited company. It allows market access to China – which is the largest populated country in the world. The low tax regime, secured property rights, government initiatives are some important reasons which are continuing to attract investors to this region to setup their private limited company.
The Business Set Up Process in Hong Kong Is Quite Simplified, and You Can Start a Business in Hong Kong Without Traveling Here. How?
By hiring our reliable private limited company registration services, you can set up your business and Hong Kong limited company quickly and professionally. There are many agencies which can offer consultancy services for starting a business, but selecting the right agency depends on how much support and guidance they can extend to expand your Hong Kong business in this region.
We have our services around the globe, and our experience allows us to start a business for in a new country without having our client to travel. Isn’t that amazing? Our experts can handle all the registration process, recruitment process, opening a bank account, applying for a tax number, setting up a local registered office without your presence in Hong Kong.
Compelling Reasons to Start a Business in Hong Kong
Many big corporates such as Facebook, Google, Apple, Amazon, PepsiCo, Starbucks are investing in Hong Kong. Do you want to know why? Here are some reasons:
- Fewer tax burdens
- Reduced business risk
- Business-friendly environment
If these reasons excite you, then you must consider the following compelling reasons to start a business in Hong Kong. The foreign investors mainly contribute to the dynamic growth of the economy, and hence the government of Hong Kong has begun special programs for them.
If you want to expand your wings to Hong Kong, it is a great idea to invest here. However, this idea can be made more significant by availing our valuable consultancy services which will help you in setting up a new company in Hong Kong from scratch.
1. Economic Growth of Hong Kong
The dynamic economy of Hong Kong is the principal reason why you should start a business in Hong Kong. The economic freedom of this country stands at the first place both regionally and internationally. This freedom is contributed by:
(i) Economic policies
(ii) Transparent legal laws
(iii) The open market of Hong Kong
(iv) Efficiency in the regulatory systems
(v) Security to the property rights
2. Opportunity to Invest in a Wide Range of Sectors
Unlike other countries, it is easier to start a business in Hong Kong. The business registration process is simple and less expensive; hence it is a good idea to start a business in Hong Kong with a concrete business plan. Hence, many start-ups have come up in Hong Kong which is contributing to the economy of this region. The growing sectors of Hong Kong are:
(i) Information & Technology
(iv) Financial Technology
(v) Professional services
(vii) Data analysis
(viii) Education and learning
3. Attractive Government Policies and Initiatives
Foreign investors are willing to start a business where the government is supportive. Hong Kong allows 100% ownership to foreigners. Thus they can be the Hong Kong business owners and enjoy the senior most position in the company. The government of Hong Kong has started InvestHk, a department which offers free investment promotion to the business and provides services to the foreigner companies.
4. Geographical Location of Hong Kong
Hong Kong is situated in Central Asia, and thus it gives the business accessibility to different trade markets, particularly mainland China. The strategic location of Hong Kong is one of the most compelling reasons why investors are interested in Hong Kong. Investors who get access to a wide range of market are always ready to expand their business to such areas, and Hong Kong is one of them!
5. Excellent Banking Facilities
Hong Kong offers multi-currency bank accounts to its foreign investors. Hong Kong is a global leader in the banking sector. Along with excellent banking facilities, the corruption rate in Hong Kong is quite low compared to UK, USA, Germany.
6. Less Burden of Taxes
Hong Kong corporate tax rate is very low compared to other countries. There are no VAT or dividend sales taxes here. The current taxes of Hong Kong 16.5% profit tax, 15% for property tax, 15% of salaried taxes. This low tax regime offered by the Hong Kong government is one of the major reasons why companies are expanding their business to Hong Kong.
7. Special Initiatives From Government
To attract foreign investment, the government must start special programs, and they haven’t failed here. The government has extended their helping hands to foreign investors because they understand that the growth of the economy is directly proportional to the investment made in Hong Kong.
Hong Kong’s government has special programs such as loan funding, market funds, incubator program which attracts foreign investors.
8. Easy Selling of Corporate Shares
The business owners can easily sell their shares to expand their business further through the cash that comes from the selling of the shares. Unlike other countries, where selling shares of the corporation is a quite complicated task, Hong Kong has simplified this entire process. Thus, the companies which are set up in Hong Kong can easily utilize their money by selling their business shares to attain assets for the company.
9. Talented Labour Force
The talent of Hong Kong is well-educated and adaptable with strong ethics. Hong Kong allows employment of professionals from overseas. The immigration policy of Hong Kong also allows bringing their families for permanent settling here.
10. Excellent Infrastructure
Hong Kong has a world-class infrastructure for railways, logistics, airports, telecom. This is an important consideration for starting a business in a new place. The airport is well developed in Hong Kong and is well connected with all the important airlines. The railway stations of Hong Kong are excellently developed thus offering easiest mean to travel from one place to another. The deep-sea port of Hong Kong is developed in such a way that it has become the best means to commute in Hong Kong.
Apart from the rapid and dynamic growth of the economy, foreign investors are also keen to understand the country’s infrastructure and government initiatives before investing. Hence, Hong Kong has never disappointed any of their investors by providing a business-friendly environment to them.
Selecting the Right Business Structure
Now that you have made up your mind to invest in Hong Kong. The first step that 3ecpa does is understand your business goals and requirements. Once we have completely understood this, we can help you select the business structure. Business structures must be carefully selected which otherwise can lead to losses.
Our team will select the right business structure for you depending on:
- Size of the business
- Capital investment
- No. of employees
- Business requirement.
Some common business structures of Hong Kong are:
1. Limited Company
Small and medium-sized enterprises usually establish this type of entity. You need to hire at least one director and 1 shareholder to set up a limited company. There is no capital amount requirement for starting this entity.
2. Branch Office
Branch Office is set up by the parent company. The headquarters decide all the activities of the branch office. The debts and liabilities of the branch office are liable to the parent company.
3. Subsidiary Office
The subsidiary office works similarly like a branch office except that it is responsible for its debt and liability.
4. Representative Office
A representative office is an excellent way to explore the market of Hong Kong before expanding your wings here. An RO cannot perform any income generating activities here.
5. Sole Proprietorship
This business entity has a single owner and is best suitable for small firms. The owner of the firm is responsible and liable for all the debts and can enjoy the profits after paying income tax.
When two people come together under an agreement to do business, a partnership firm is established. There are two types of partnership firms:
- General Partnership is where the investor is entirely liable for the company including the partner’s action.
- A limited partnership is best to invest where you are responsible for your contribution, but you cannot control any activities of the business. It is established between the principal partner and the limited partner.
How to Start a Business in Hong Kong
The business registration process is quite simple in Hong Kong but can be time-consuming. Availing our consultancy services can simplify this setup process and reduce the time so that our clients can start their business quickly in Hong Kong. Our team can reduce the time as they have good experience in checking the uniqueness of the company name, filling the application (without allowing it to get rejected), opening the right local bank account etc.
The procedural steps of business registration are:
1. Select a Company’s Name
Select a unique name for the company before registering a business in Hong Kong. Make sure that the name that you have selected is unique and no other company has the same name as yours in Hong Kong. Our team will help check if your selected name is unique or not.
2. Register the Company
Apply for business registration to obtain a business registration certificate. Make sure your application form has been correctly filled to avoid rejection. 3ecpa helps you in filling the application form correctly by selecting the right business entity and filling other details. We haven’t failed to pass the application form for business registration in one-go.
3. Open a Local Bank Account
After your business has been with registered with the Inland Revenue Department, you need to open a local bank account. Hong Kong is a global leader in banking and offers a multi-currency facility to you. We at 3ecpa help in opening a bank account which meets your requirements.
4. Register a Local Business Address
You need to have a local business address so that you can receive the newsletter and it becomes a mailing address for your company.
5. Hire Employees
Depending on your business requirement, it is imperative that you must hire local employees for your business. Hiring can be a challenging task if you are new in Hong Kong. Hence 3ecpa offers help. We will recruit the necessary employees for you depending on your requirement by sending out job openings.
6. File Taxes
Once your company has begun its operation, it is mandatory to pay taxes to the government and submit the annual financial report. You can hire an auditor so that he/she can help you in filing returns and improving the overall business operations thereby cutting down unnecessary costs.
Visa Application to Start a Business in Hong Kong
The time taken to start a business in Hong Kong is worth the wait as Hong Kong has a lot to offer to its investors. There are many attractive government initiatives and the rapidly growing economy of Hong Kong which will boost your company’s financial chart.
Before expanding your wings to Hong Kong, you might want to understand the market of Hong Kong. You could also want to establish professional contacts for supply and sales and tune your Chinese skills by setting up a representative office here. Despite all these efforts, you must be patient as it takes time for any business to build into an empire. You must have a whole business plan. Do not worry about the local support as we have a complete team of highly experienced people who can provide right guidance to you for accountancy, taxation or consultancy.
You need to apply for a visa for investing in Hong Kong or for searching for a job here. To apply for a visa, you need you to fill a visa application form and should meet the criteria of educational qualification and professional qualification. You shouldn’t have a criminal history or any negative police record.
The application form is available online and can be downloaded from (ID 999A) from the Immigration department.
Following are the documentation required for obtaining a visa:
- Passport photograph copy
- Copy of your passport
- Proof of your educational and professional qualification
- Your business plan for two years
- Background information about your business
Have an Intact Business Plan to Start a Business in Hong Kong
Having a business plan is imperative to start a business in Hong Kong. No matter how good your innovative idea is but until you have a concrete action plan, your venture cannot be successful.
A business plan must have complete details about the business such as:
- Business goals – primary and secondary
- Marketing plans
- Budget plans
- Strong reasons to support why your business can be a hit in Hong Kong
- Details of the team who can help you achieve business goals.
Business plans are not lengthy descriptions but a basic outline on how to start a business in Hong Kong. This business plan can be modified at later stages depending on the growth of the company.
How Can 3E Accounting Help You to Start a Business in Hong Kong?
If you are here reading this service page, it means you are interested to start a business in Hong Kong. Being an economic free cosmopolitan, this country has become a hub to start-ups. The foreign investors are setting different business structures here depending on their business requirement. We have a team who will get in touch with you to understand your business goals, capital investment, business niche and thus we will help you in deciding the right business structure for a profitable and successful venture.
We have experts from different fields who can help you with accountancy, taxation, business registration application and recruiting employees. 3ecpa has been registering companies for more than a decade. With this experience comes great contacts which makes the entire process of business registration easier.
You can sit with our team in your own country and decide how to begin the process of business registration in Hong Kong. Our experts will help you from scratch to successfully establish your venture. We have our services around the world, so we try our best to avoid unnecessary travels of our clients to set up a business to a new country.
Our team selects a local bank for you which doesn’t require you to travel for opening a local account here. We are dedicated towards our client and provide complete support to them to make their dream come true of starting a company in Hong Kong.
Get in touch with us via email or phone call and we will be glad to assist you.