Thinking of how to start a business in Hong Kong?
Hong Kong is renowned for its business-friendly environment, making it an attractive destination for entrepreneurs looking to establish their ventures in Asia. With a straightforward and efficient registration process, low tax regime, and strategic location, Hong Kong provides numerous advantages for businesses of all sizes.
Entrepreneurship is a beautiful portal into self-discovery. —Ryan Daniel Moran
Whether you are a local entrepreneur or a foreign investor, understanding the steps to register and start a business in Hong Kong is crucial to ensure a smooth and successful setup.
In this comprehensive guide, we will cover everything from obtaining a Business Registration Certificate to understanding the intricacies of Hong Kong's tax system and meeting key tax obligations such as profits tax and salaries tax.
We will also explore various options for setting up your office space, ranging from co-working spaces to traditional leased offices, and provide insights into the best banks for opening a business account.
By the end of this guide, you will have a clear roadmap to establish your business in Hong Kong, taking full advantage of its dynamic and vibrant market.
Why start a business in Hong Kong
As a popular international financial center, Hong Kong is an excellent place to start your own business. Besides located at the heart of the promising Asia Pacific region, it is also relatively easy to take the first steps towards entrepreneurship.
1. Favourable business policies and environment
Hong Kong's service-oriented economy, where services account for over 93% of its GDP, further enriches the business landscape, providing ample opportunities in sectors such as tourism, retail, and professional services.
Thanks to the city’s favourable business environment, Hong Kong was able to maintain its economic resilience through difficult economic times.
Since the COVID-19 pandemic, Hong Kong has seen a steady economic recovery, despite initial setbacks. The city's GDP expanded by 2.7% year-on-year in the first quarter of 2024, reflecting a positive trend supported by tourism and events. Its construction industry is also expected to maintain stable growth throughout the year.
This is in no small part thanks to favourable business policies put in place by the local government. The city ranks high globally for ease of doing business, securing the 4th position in 2023 and the 3rd according to the World Bank. On top of that, incorporated businesses are taxed at 16.5% on assessable profits while unincorporated businesses are taxed at 15%. This makes Hong Kong a tax haven within the business world.
2. Rapid growth in various industries and sectors
Various other sectors in Hong Kong are witnessing rapid growth. Among them, the financial services sector continues to thrive thanks to the support provided by the city's robust regulatory framework.
The technology and innovation sector is also expanding, driven by government initiatives and a strong entrepreneurial ecosystem. According to market research firm Technavio, the size of the city’s IT industry is projected to grow by USD 6.72 billion, with a Compound Annual Growth Rate (CAGR) of 6.81%. Other growing industries include logistics, healthcare, and environmental services.
Opportunities for starting a business in Hong Kong are abundant. The city even offers a strategic location for accessing both Asian and global markets.
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
A good business name is crucial as it sets the tone for your brand, communicates your business strategy, and helps differentiate you from competitors. It facilitates brand recognition, making it easier to attract and retain customers, and can even influence your company's perceived value and professionalism.
A well-chosen name is also vital for legal reasons, ensuring it isn't already in use or trademarked, which helps avoid future disputes.
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.
Find available domain names and choose the right one for your business with GoDaddy’s AI domain generator.
Additionally, having a consistent and memorable name across domains and social media platforms is essential for building a strong online presence and enhancing customer engagement.
Related: How to 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 taxes 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 after 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: Obtain the necessary Business Permits and Licences
Starting a business in Hong Kong requires obtaining several permits and licences, each crucial for legal operations.
Business Registration Certificate
To legally operate in Hong Kong, every business must obtain a Business Registration Certificate (BRC). The application can be completed online through the Inland Revenue Department's website or at the Business Registration Office. The process typically takes two working days and costs around HK$2,200 per year.
Food Business Licence
For businesses involved in food preparation or sales, a Food Business Licence is mandatory. This licence is issued by the Food and Environmental Hygiene Department (FEHD). The application process includes health and safety inspections and can take several weeks. The cost varies depending on the type of food business and the specifics of the premises.
Import and Export Licence
Companies engaged in import and export activities need to secure an Import and Export Licence. This licence is managed by the Trade and Industry Department (TID). The application is submitted online, and approval generally takes a few days. The fee is minimal but varies depending on the goods involved.
Professional Services Licence
Professional service providers, such as lawyers, doctors, and accountants, must obtain specific licences from their respective regulatory bodies. The application process and fees vary significantly between professions. Typically, it involves submitting proof of qualifications and passing relevant assessments.
Retail Business Licence
Retail businesses need a Retail Business Licence, especially if selling regulated items like tobacco or alcohol. The application, submitted to the Customs and Excise Department, includes inspections to ensure compliance with health and safety standards. Costs and processing times depend on the nature of the retail business and the specific items sold [9].
Financial Services Licence
Businesses offering financial services must obtain a licence from the Securities and Futures Commission (SFC). The application process involves stringent checks on the financial standing and integrity of the business and its directors. Processing times can extend to several months, with fees varying according to the scope of services offered [9].
Special Trade Licence
Certain trades, such as construction and logistics, require special licences. These licences are issued by relevant departments, such as the Buildings Department for construction. Applications include compliance checks and often take several weeks. Costs depend on the trade's regulatory requirements and the specific business activities involved.
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 4: Register your company with the Hong Kong Companies Registry
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 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 locally appointed legal representative.
While each bank has its own review documents checklist, here are some key required documents:
| Requirement | Details | Where to Obtain | Cost | Time to Obtain |
| Business Registration Certificate (BRC) | Proof of business registration in Hong Kong. | Inland Revenue Department | HK$2,200 per year | 2 working days |
| Certificate of Incorporation | Legal document proving the company's formation. | Companies Registry | HK$1,720 | 4-5 working days |
| Articles of Association | Document detailing the company's structure and regulations. | Companies Registry | Part of incorporation fee | 4-5 working days |
| Proof of Business Address | Evidence of the business's operating address. | Utility bill, lease agreement | Varies depending on source | Immediate |
| Identification Documents | IDs for company directors and account signatories. | Passport, HKID | Varies | Immediate |
| NNC1 Form | Notification of the first secretary and director(s). | Companies Registry | Part of incorporation fee | 4-5 working days |
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
Recommended Banks in Hong Kong
Several banks are recommended for opening a business account in Hong Kong. These include HSBC, DBS, and OCBC, which offer a variety of services tailored for SMEs and startups. Each bank has its own requirements and application processes.
HSBC: Known for its global reach and comprehensive business banking services.
DBS: Offers a range of SME banking solutions with easy online account management.
OCBC: Provides tailored banking solutions for small to medium-sized enterprises.
The process for opening a business bank account involves completing the bank’s application form, gathering the necessary documents, and submitting them for review. The time to open the account can vary from a few days to a couple of weeks, depending on the bank and the completeness of the documentation.
Step 6: Arrange for an office space (if you’re not starting an online business)
Securing the right office space is crucial for your business operations in Hong Kong. Here are the options available, legal requirements, and associated costs to help you make an informed decision:
| Office Space Option | Description | Legal Requirements | Price Range (per month) | Locations |
| Co-working Spaces | Shared office spaces offering flexibility and networking opportunities. | Compliance with building regulations | HK$2,000 - HK$5,000 per desk | Central, Wan Chai, Kowloon |
| Leased Offices | Traditional office spaces rented for a fixed term, providing privacy and branding options. | Lease agreement, fire safety, health regulations | HK$30,000 - HK$100,000+ | Central, Admiralty, Tsim Sha Tsui |
| Serviced Offices | Fully furnished offices with utilities and services included in the rental. | Compliance with commercial property regulations | HK$10,000 - HK$50,000 | Central, Quarry Bay, Cyberport |
Step 7: Tax Registration
To operate legally in Hong Kong, businesses must first obtain a Business Registration Certificate (BRC). This can be done online through the Inland Revenue Department's e-Tax service or in person at a local office. The BRC must be renewed annually or triennially, depending on the option chosen during registration.
Hong Kong's tax system is known for its simplicity and territorial basis of taxation, meaning that only income derived from or received in Hong Kong is taxable. The key taxes businesses need to be aware of include profits tax, which is levied at 16.5% for corporations on assessable profits, and salaries tax, which is imposed on income earned by individuals at progressive rates up to 17%. There is no VAT, sales tax, or capital gains tax in Hong Kong, making it a favourable jurisdiction for businesses.
Understanding and fulfilling tax obligations is crucial for compliance and smooth operation. Regular filing of tax returns and adherence to deadlines set by the Inland Revenue Department ensures that businesses remain in good standing.
Your gateway to business success in Hong Kong
Starting and registering a business in Hong Kong presents an exciting opportunity for entrepreneurs and investors. The city's streamlined registration process, favourable tax regime, and strategic location make it an ideal hub for businesses aiming to expand within Asia and beyond.
By following the steps outlined in this guide, including securing your Business Registration Certificate, understanding the tax obligations, and choosing the right office space, you can ensure a smooth and efficient setup for your venture. Hong Kong's vibrant market and robust infrastructure provide a solid foundation for achieving business success.
Before you embark on the journey of starting a business in this energetic city, here are three tips to 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.
Whether you're a local entrepreneur or a foreign investor, Hong Kong offers a gateway to growth and innovation, helping you realise your business aspirations in one of the world's leading financial centres.
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: This article was first published on May 27, 2021 and updated on Jul 26, 2024. It also contains content written by Nigel Seah.
