Hong Kong Business Ownership for Foreigners: Your Complete Guide

Did you know that you don’t need to be a Hong Kong resident to start a company here? That’s right – Hong Kong welcomes entrepreneurs from all over the world, with no restrictions on foreign ownership and the ability for foreigners to serve as directors.

Whether you’re looking to expand your global reach or launch a fresh venture in a thriving economy, Hong Kong offers an unbeatable combination of low taxes, business-friendly policies, and straightforward registration. Curious how you can join the ranks of global entrepreneurs in Hong Kong? Let’s uncover the surprisingly simple path.

Why Choose Hong Kong for Your Business?

1. Business-Friendly Environment

Hong Kong’s pro-business policies offer low taxes, efficient regulatory systems, and minimal paperwork, making it an attractive place for both local and international entrepreneurs. You can also register and manage your company remotely without needing to be physically present in Hong Kong.

2. Simple Tax System

Despite being part of China, Hong Kong operates under an independent tax system, boasting one of the most straightforward and transparent tax regimes. With no capital gains tax and low corporate tax rates, Hong Kong is a prime location for businesses looking to maximize their profits.

3. Access to a Broader Market

Hong Kong’s proximity to mainland China and its numerous trade agreements with over 30 countries make it an ideal location for companies that aim to expand their global reach.

Step-by-Step Guide to Company Registration in Hong Kong

Step 1: Choosing Your Business Structure

The first step in setting up your company in Hong Kong is choosing the right business structure. This decision is crucial as it impacts your company’s legal standing, tax obligations, and compliance requirements. Here are the primary business structures available in Hong Kong:

• Branch Office: An extension of a foreign company operating in Hong Kong.
• Sole Proprietorship: A business owned and managed by one individual, with no distinction between the owner and the business.
• Partnership: A business shared by two or more individuals with shared responsibilities and liabilities.
• Company Limited by Guarantee: Commonly used by non-profit organizations.
• Company Limited by Shares: The most popular choice for businesses as it limits shareholders’ liability to their share capital.

Each structure has its advantages and disadvantages, so it’s important to thoroughly research each option to ensure it aligns with your business objectives.

Step 2: Selecting Your Company Name

Once you’ve settled on a business structure, the next step is to select a name for your company. Your company name can be in English, Chinese, or both, but it must be unique and not currently in use by another registered company. You can conduct a company name search through the Cyber Search Centre or the Company Search Mobile Service. Make sure to review the Companies Registry’s guidelines to avoid naming issues.

Step 3: Determining Officers and Shareholders

Before you can officially register your company, you need to appoint key personnel who will run the business. This includes directors, shareholders, and a company secretary:

• Directors: At least one director is required, and they must be a natural person aged 18 or above. Directors can be residents or non-residents of Hong Kong, and there is no upper limit on the number of directors. Corporate directors are allowed under certain conditions.
• Shareholders: You need at least one shareholder, who can be an individual or a corporate entity. Hong Kong allows 100% foreign ownership, and the sole director can also serve as the shareholder. There is no maximum limit on the number of shareholders.
• Company Secretary: It is mandatory to appoint a company secretary who must be a Hong Kong resident or a Hong Kong-registered company. The sole director cannot act as the company secretary.
• Share Capital: The minimum share capital required is HKD 1.00, with no upper limit. Bearer shares are not allowed in Hong Kong.
• Registered Address: A physical local address in Hong Kong is required for company registration, as P.O. boxes are not permitted. Monx can provide this service as part of our company registration package.

Step 4: Registering Your Company

To officially register your business, you must file an application with the Companies Registry. The required documents include:

• Incorporation Form: Use Form NNC1 for companies limited by shares or Form NNC1G for companies not limited by shares.
• Articles of Association: This document outlines the company’s regulations and must be submitted alongside the incorporation form.
• Notice to Business Registration Office (IRBR1).
• Identification Documents: Copies of passports and proof of residential address for foreign individuals, and Hong Kong ID cards for residents.
• Corporate Documents: If your shareholders are corporate entities, you must provide copies of their corporate documents.

You can submit these documents electronically via the e-Registry, or in hard copy at the Shroff on the 14th floor of the Queensway Government Offices.

Step 5: Collecting Your Certificates

Once your application is approved, the Companies Registry will issue the Certificate of Incorporation and the Business Registration Certificate.

• For Electronic Submissions: The certificates are usually issued within one hour and sent to the email address of the applicant.
• For Hard Copy Submissions: The certificates are generally available within four working days, and you will be notified by fax when they are ready for collection. To collect the certificates, you’ll need to present the Notification of Collection of Certificate(s) and a valid ID or company chop. If someone else collects them on your behalf, they will need written authorization and identification.

Step 6: Opening a Corporate Bank Account

After registration, the next critical step is opening a corporate bank account for your business. Monx works with a range of partner banks to help expedite the account opening process. Typically, you’ll need to personally visit the bank and provide:

• Registered Address and Contact Information: For both the company and business owners.
• Bank Application Form Documents: As specified by the bank.
• Incorporation Documents: Including certified copies of your company’s registration documents.
• Proof of Business: Evidence showing the nature of your business activities.
• Beneficial Ownership Details: Required for nominee shareholders or stockholders.
• Certified Copy of Business Registration Certificate: As issued by the Companies Registry.

Step 7: Obtaining Permits and Licenses

Depending on the nature of your business, you may need to apply for specific permits or licenses. The types of permits required vary widely based on the products or services your business offers. You can find more information on required licenses in the Licensing & Permits section of GovHK and the Business License Information Service. The status of your license application can be tracked on the Online License Services.

Step 8: Understanding Your Tax Obligations

In Hong Kong, tax obligations depend on various factors such as the scope of charges, available exemptions, and deductions. Currently, the profit tax rate is 8.25% on the first HKD 2 million of profits, and 16.5% on profits above that threshold. Notably, Hong Kong does not impose a capital gains tax, making it an attractive destination for businesses. Stay updated on tax rules through the Inland Revenue Department website to ensure compliance.

Step 9: Complying with Annual Filing Requirements

To maintain good standing, your company must comply with annual filing requirements, which include:

• Annual Return Filing: This updates the Companies Registry on your company’s details.
• Annual Tax Return Filing: Required by the Inland Revenue Department along with audited financial accounts.
• Annual Report Requirements: These vary based on whether your business is a local limited company or a non-Hong Kong company.

Failure to meet these requirements can result in penalties, so it’s important to stay on top of your filings.

How Monx Can Simplify Your Company Registration Process

At Monx, we understand that navigating the legal requirements and paperwork for company registration can be overwhelming. That’s why we offer a streamlined process that takes care of everything for you, so you can focus on growing your business.

We Handle All Official Requirements

Monx will manage all government requirements necessary for your business to start operating in Hong Kong. This includes:

• Hiring a Local Corporate Secretary: We will ensure your company is compliant with Hong Kong regulations by appointing a local corporate secretary.
• Providing a Local Registered Address: We will secure a local business address for your company.
• Arranging a Business Registration Certificate: Monx will obtain the necessary certification to get your business officially registered with the Hong Kong government.

Monx Registers Your Hong Kong Company

We handle the entire incorporation process from start to finish. Once you upload all required documents through our secure online portal, we will prepare:

• Your Incorporation Application: We’ll ensure all the necessary paperwork is completed and submitted correctly.
• Company Constitution: We’ll draft and submit the constitution of your company, tailored to your business needs.
• Articles of Association: These important documents will be prepared and filed on your behalf.

Open an Account with One of Our Partners

To ensure your company can start operating immediately, Monx will help you open a business bank account. We work with leading banks like HSBC, or you can opt to open an online account with providers such as AirWallex, Statrys, and more.

• Introduction to Preferred Partner Banks: We introduce your business to our partner banks and assist with the KYC (Know Your Customer) process.
• Selection of the Best Banking Options: Based on your business needs, our partners will recommend the best banking solutions for your company.

Looking to start your business in Hong Kong, even if you’re not based locally? We specialize in making the process smooth and hassle-free for entrepreneurs from around the world. Contact us at hello@monx.team and let’s get your business up and running!