Thinking of how to start a business in Hong Kong?
The idea of starting a business is more appealing to many people these days. For many would-be entrepreneurs, it can be challenging to find an alternative that can beat the excitement of creating something unique. Furthermore, there is also the satisfaction of being your own boss. As a result, even in the backdrop of the COVID-19 pandemic, many new businesses continue to emerge, at least in my hometown Hong Kong. In fact, people continue to see Hong Kong as a reliable place to start a business.
Entrepreneurship is a beautiful portal into self-discovery. —Ryan Daniel Moran
As one of the foremost international financial centers, Hong Kong is an excellent place to start your own business. Not only because it is located at the heart of the promising Asia Pacific region, but also how easy it is to take the first step. A company can be formed and ready to flourish within days. Besides, doing business here can enjoy extensive networks with the world, a comprehensive legal system, a low and simple tax regime, not to mention a free and intense flow of capital.
How to start your business in Hong Kong
If you want to grab the chance but don't know how to start a business in Hong Kong, this is the 6-step starter guide you need.
Step 1: Select and check your company’s name
Check whether your company name can be registered in Hong Kong via the ICRIS system (mobile version). The same or similar name to existing companies will be forbidden.
If you need some ideas on how to pick the right name for your business, check out this article for 5 tips on how you can choose a business name.
Step 2: Choose a type of business entity
Here are the most common types of companies in Hong Kong:
- Sole Proprietorship: A type of business with an unlimited liability company means the owner can enjoy all the profits after paying tax and be responsible for all the debts.
- Limited Liability Company: Compared with the unlimited liability company, it separates personal assets and legal responsibility from the business's liabilities. To register a limited liability company, you need at least one director and one shareholder. There is no basic capital requirement.
- Partnership: This business type requires at least two members and has a mutual partnership agreement. Members will share the responsibility. With a general partnership, they will be personally liable for the company's debts and obligations. Otherwise, with a limited partnership, they will only be responsible for their contributed capital but may not participate in management. An application must be filed no later than one month of business commencement.
- Branch: This refers to an extension of a parent company, and is not a separate legal entity. While it can involve commercial activities, it has no ownership rights. Its parent company has full liability for the debts and obligations. If you own a foreign company, you will receive a certificate of a non-Hong Kong company after registering with the Company Registry.
- Subsidiary: Sometimes mixed up with the definition of a branch, a subsidiary company in Hong Kong refers to a private limited company incorporated in the country. The shareholder can be either another local company or a foreign corporate entity. As a subsidiary is treated as a separate legal entity, its debt and liability will be separated from its parent company. The subsidiary also enjoys all the tax benefits available to locally incorporated companies.
- Representative Office: An entity type only foreign companies can register. It must have the same name as its parent company and be unable to conduct business in Hong Kong. It is good for the need for promotion and market research.
Step 3: Submitting your application
The easiest way will be to deliver the required documents with the fees through an online system called e-Registry or an app named CR eFiling (Android and iOS)
Otherwise, you can visit the 14th floor of the Queensway Government Offices and hand in a set of hard copy forms.
Fill in the following forms and prepare all three documents.
- Incorporation Form – To form a company limited by shares, click here, otherwise click here.
- A copy of the company's articles of association - the rules and guidelines about how the board can operate the company (Here are some samples)
- A Notice to Business Registration Office
Step 4: Collecting certificates upon approval
Once the application is approved, you can collect the Certificate of Incorporation and Business Registration Certificate. It also means that you are now a boss of your own business!
When the application is approved, you can either download or collect the Certificate of Incorporation and Business Registration Certificate. This depends on how you submitted the applications.
E-Certificates are usually issued within 1 hour and you will be notified through the email you provided. Certificates in hard copy form take longer, typically around 4 working days. You will get a fax notification. The certificates need to be collected in person with the Notification of Collection and identification documents/company chop mentioned therein. You can authorize a representative to do so with a written authorization.
Now the name of your company has been registered with the Companies Registry, which does not mean that it is registrable as a trademark. Company registration and trademark registration are two separate regulations and register systems. If your business requires a trademark, remember to register through the Intellectual Property Department.
Step 5: Open a local business bank account
Now you will need a local business bank account to operate the business. It's no secret that opening a business bank account can be pretty tricky in Hong Kong, because there are strict auditing measures enforced by the banks and government.
It will be easier if you are physically in Hong Kong, but some banks may allow a local appointed legal representative.
While each bank has its own review documents checklist, here are some general required documents:
- Proof of identity - from ALL Directors, Persons Purporting to Act, Key Controllers, and Direct Appointees
- Proof of Address - rental lease or property license from ALL Persons Purporting to Act
- A signatory list and Identification information for all authorized signatories
- Information Required for remaining Person Purporting to Act - A list of Persons Purporting to Act and Identification information
- Foreign Account Tax Compliance Act (FATCA) Documents
- Common Reporting Standard (CRS) Documents
- Payments and Forms for Account Opening - initial deposit, account application fee, and other charges
- Business' formation documents - Business Registration, Certificate of Incorporation, M&A, and Register books.
- Business operation information - Confirmed order, Invoice, Sales contract
- Product or service information - Company website / leaflet / brochure
- Information on counterparties - Counterparties' website/ leaflet / brochure
- Latest financial information - Latest audited report
- Source of fund information
- Source of wealth information
Step 6: Register a local business address
You’re almost there! In order to receive company mail from the government, you will need a local business address. It must be a physical one and cannot be a PO Box.
Some final tips
With these 6 vital steps to start a business in Hong Kong, you will be ready to operate and pursue success.
Before you embark on the journey of starting a business in this energetic city, here are three tips you must bear in mind through this process:
- Although it is tempting to work through the application documents as soon as possible, it is crucial to check the availability of your company's name via the ICRIS system in advance.
- The format of your company's certificates is determined by the way you deliver the application.
- To apply for a business bank account, you must go through the review documents checklist from the specific bank.
Tip: If you are planning to sell goods online, read this article to learn why you should set up an e-store.
When you start a business, there are a lot of decisions to be made. It could be fun, it could be tiring, it could be exciting, and it could also be scary. And throughout this process you will learn a few things about yourself too. Some people might have called this process a self-discovery journey, either way, you will learn and grow as you build your business.
Once you have completed these administrative processes, it is probably time to look into establishing your presence on the web. GoDaddy is a one stop shop with all the help and tools you need to get started online. If you are ready, get started here.
Editor’s note: Got questions about putting your idea online? Get instant answers on GoDaddy Asia Facebook Messenger now.
