9 Simple Steps to Launch Your Small Business in Hong Kong

Thinking of turning your brilliant business idea into reality? You’re in luck! Hong Kong is among the easiest places to start a business globally. Our city’s streamlined regulations and pro-business policies mean less paperwork, quicker registration processes, and fewer bureaucratic hurdles to slow you down.

But where do you start? How do you navigate the process of setting up your small business? In this walkthrough, I’ll break down the steps you need to take to set up a limited company in Hong Kong, making it easier for you to dive into your new venture with confidence.

From choosing the right business structure to registering your company and opening a bank account, we’ll walk you through each step, offering tips and insights along the way. Ready to get started? Let’s dive into the essentials for launching your small business 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 own set of 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, and 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. The Companies Registry provides guidelines and restrictions on choosing a company name, so be sure to review them to avoid any naming issues.

Step 3: Determining Officers and Shareholders

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

• Directors: You need at least one director who must be a natural person aged 18 or above. Directors can be residents or non-residents of Hong Kong, and there is no limit on the number of directors you can appoint. However, 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 CR eFiling mobile app, 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.

When you choose Monx for your company incorporation, we handle all of these processes for you, ensuring a smooth and hassle-free experience.

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.

Are You Ready to Start Your Small Business in Hong Kong?

Establishing a company in Hong Kong is a strategic move for many entrepreneurs due to its economic advantages and supportive business environment. By following these steps and partnering with a reliable provider like Monx, you can efficiently navigate the setup process and focus on growing your business. Reach out to Monx today at hello@monx.team to kickstart your journey to success in Hong Kong.