What is the process of making a company in Hong Kong

Why Start a Company in Hong Kong?

Hong Kong ranks among the world’s most accessible places to launch a business. Its straightforward incorporation process means you can go from idea to registered company in just a few days. This speed lets you focus on operations rather than paperwork.

Low, predictable taxes. A flat 16.5% profits tax applies only to income earned in Hong Kong. There is no sales tax, no dividend tax and no capital gains tax—so your forecasts stay accurate.
Global financial hub. The city connects you to major banks and investors across Asia and beyond. Opening a corporate bank account is typically faster here than in many other jurisdictions.
Market gateway. Hong Kong offers seamless access to mainland China and international markets. Its network of free trade agreements and double-taxation treaties helps you expand without extra duties.
Robust legal framework. Based on English common law, Hong Kong’s courts enforce contracts reliably. You gain strong protection for intellectual property and clear dispute-resolution paths.

Types of Business Entities in Hong Kong

Choosing the right business structure is one of the first—and most important—steps in starting a company in Hong Kong. Your choice affects everything from liability and tax exposure to fundraising options and operational flexibility.

Here’s a breakdown of the main types of entities you can register:

Private Limited Company

This is the most common structure for entrepreneurs and startups in Hong Kong.

Liability is limited to the amount shareholders invest.
You can have up to 50 shareholders.
Foreigners can own 100% of the shares.
Preferred by investors and required if you plan to scale, apply for funding, or issue shares.

Sole Proprietorship

Ideal for freelancers or solo operators who want a fast, low-cost setup.

Owned and run by one person.
Easy to manage with minimal reporting.
The downside? You're personally liable for all business debts.

Partnership

Suitable when two or more people want to co-own a business without forming a company.

General partnerships expose all partners to full liability.
Limited partnerships allow passive partners with limited liability.
Fewer administrative requirements but less legal protection than limited companies.

Branch Office

For established foreign companies looking to operate in Hong Kong under their existing brand.

Not a separate legal entity—parent company is liable.
Must register with the Companies Registry and obtain a Business Registration Certificate.
Useful for testing the Hong Kong market before incorporating a local entity.

Representative Office

Used for marketing or research—not for generating revenue.

Cannot engage in commercial or profit-making activities.
Ideal for companies exploring future expansion in the region.
Simple setup, but strictly limited in scope.

Each structure comes with trade-offs. If you’re unsure, start with a private limited company—it’s the most flexible and protective option for long-term growth.

Key Requirements for Registering a Company in Hong Kong

Before you register your company, you’ll need to prepare a few key details. These aren't optional extras—they're legal requirements under Hong Kong's Companies Ordinance. Skipping or misunderstanding any of them can delay the incorporation process or cause compliance issues later.

Here’s what you need to have ready:

1. At Least One Director

Every Hong Kong company must appoint at least one director who is a natural person—not a company.

Directors can be of any nationality and don’t need to reside in Hong Kong.
There’s no maximum number of directors, and you can also appoint corporate directors in addition to an individual director.
A sole director can also be the sole shareholder.

2. One or More Shareholders

You need at least one shareholder.

The shareholder can be an individual or a corporate body.
A person can act as both shareholder and director.
Full foreign ownership is allowed, so you don’t need a local partner.

3. A Hong Kong-Based Company Secretary

Your company must appoint a company secretary who resides in Hong Kong or is a licensed corporate service provider.

The company secretary is responsible for maintaining statutory records, submitting annual filings, and keeping your business compliant.
A sole director cannot also serve as the company secretary.

4. A Registered Hong Kong Office Address

You must provide a physical Hong Kong address as your official registered office.

P.O. boxes are not accepted.
This is the address where the government will send legal documents and correspondence.
Many founders use the address of their company formation agent if they don’t rent an office.

5. Designated Share Capital

There’s no minimum capital requirement, but most companies start with HKD 10,000, divided into 10,000 shares of HKD 1 each.

Share capital doesn’t need to be paid upfront.
You can increase the capital later if needed.

Once you’ve secured these five things, you’re ready to move on to preparing your incorporation documents.

Step-by-Step Guide to Registering a Company

Setting up a business in Hong Kong is straightforward if you follow the right steps. Whether you're forming the company yourself or working with an agent, here’s how the process typically unfolds.

1. Choose a Unique Company Name

Start by selecting a name that isn’t already taken.

You can use either English, Chinese, or both.
Run a name search using the Companies Registry’s online tool.
Avoid names that may mislead the public or imply government affiliation.

2. Decide on the Legal Structure

Based on your business goals, pick the appropriate type of entity.

Most founders opt for a Private Limited Company due to liability protection and credibility.
Confirm details like shareholder structure and ownership percentage before moving forward.

3. Prepare Incorporation Documents

You'll need to prepare and submit the following:

Articles of Association: The internal rules for running your company.
Incorporation Form (NNC1): Includes basic company details like name, registered address, directors, and shareholders.
Identification Documents: Passports or IDs for all individuals involved, plus proof of address.

If you're using an agent, they will usually prepare these on your behalf.

4. Submit the Application to the Companies Registry

You can file the application online through the e-Registry platform or submit it in person.

Standard processing time is 3–5 working days.
You'll receive the Certificate of Incorporation and Business Registration Certificate if approved.

5. Collect Your Documents and Register for Business

Once approved, your company officially exists.

Collect your certificates either digitally or in hard copy.
These documents are required to open a bank account and start legal operations.

6. (Optional) Work With a Formation Service

If you're based overseas or prefer assistance, many agents offer end-to-end services.

They often include a registered office address, company secretary, and document filing in one fee.
This option is ideal for first-time founders who want a hassle-free experience.

How to Open a Business Bank Account in Hong Kong

A Hong Kong business bank account is essential for receiving payments, paying expenses, and maintaining proper accounting records. But the process isn’t as instant as company registration. Banks now follow strict Know Your Customer (KYC) checks, especially for offshore or online-based businesses.

Here’s how to navigate the process smoothly:

1. Choose the Right Bank

Start by comparing what each bank offers—especially if you’re a non-resident.

Traditional banks like HSBC, Standard Chartered, and Bank of China require in-person interviews and extensive documentation.
Virtual banks such as ZA Bank and Airstar may offer faster, fully digital onboarding—if your company qualifies.
Some formation agents also have relationships with banks, which may help speed things up.

2. Prepare the Required Documents

Banks will ask for detailed business and personal information. Be ready to submit:

Company documents: Certificate of Incorporation, Business Registration Certificate, Articles of Association.
Proof of business: Examples include invoices, contracts, websites, or a business plan.
KYC documents: ID, address proof, and resumes for all directors, shareholders, and signatories.
Bank reference letter: Some banks require this, especially for foreign founders.

The more proof you have that the business is real and active, the better your chances.

3. Book and Attend an Interview

Most traditional banks will schedule a face-to-face meeting with the company’s directors and authorized signatories.

In-person presence is often mandatory, though some banks accept video calls in certain cases.
Be ready to explain your business model clearly, including expected turnover, source of funds, and customer base.

4. Wait for Approval

Approval can take anywhere from a few days to several weeks, depending on the bank and complexity of your structure.

Some banks reject accounts for unclear business models or offshore company structures, so clarity and documentation are key.
If rejected, you may need to reapply at a different bank or revise your supporting documents.

5. Activate and Use the Account

Once approved, you’ll receive access to internet banking and can start transacting.

Always comply with anti-money laundering (AML) policies.
Regular account usage and transparency can prevent account freezes or reviews.

Taxation and Ongoing Compliance Requirements

Starting a business in Hong Kong is easy—but staying compliant is just as important. After incorporation, your company is legally required to meet local tax and filing obligations. Missing these can lead to penalties, audits, or business suspension.

Here’s what you need to know to stay on the right track:

Profits Tax

Hong Kong uses a territorial tax system, which means you’re only taxed on profits sourced within Hong Kong.

First HKD 2 million of assessable profits is taxed at 8.25% (for corporations).
Anything above is taxed at 16.5%.
Income earned outside Hong Kong is not subject to profits tax—but you must prove the offshore nature if audited.

Tax returns are filed annually with the Inland Revenue Department (IRD). Most companies get their first return 18 months after incorporation.

Annual Audit

Every Hong Kong company must prepare audited financial statements each year.

The audit must be conducted by a Hong Kong Certified Public Accountant (CPA).
Even if your company has no income, an audit is still required.
Audited reports are submitted along with your tax return.

Tip: Work with an accountant early so you aren’t rushed near the deadline.

Annual Return Filing

You must file an Annual Return with the Companies Registry every year.

This is separate from your tax filing.
It confirms company details like directors, shareholders, and company secretary.
The deadline is within 42 days of the company’s incorporation anniversary.

Failure to file can result in late fees and legal action—even if the business is inactive.

Business Registration Renewal

Your Business Registration Certificate (BRC) must be renewed either annually or every three years.

The Inland Revenue Department will send a renewal notice.
Make sure the BRC is displayed at your business location if applicable.

Employer Obligations (if hiring staff)

If you hire employees, including yourself as a salaried director, you have extra responsibilities.

Enroll in Mandatory Provident Fund (MPF) schemes.
File Employer’s Returns annually.
Comply with employment laws, including proper contracts and leave entitlements.

Hiring Staff and Understanding Employment Laws

Once your company is up and running, hiring employees in Hong Kong brings additional legal responsibilities. The city’s employment laws are well-defined, offering strong protection for both employers and workers. Understanding your obligations upfront can prevent costly mistakes later.

Employment Contracts Are Mandatory

Every employee—full-time, part-time, or temporary—must receive a written employment contract.

Contracts should clearly state job title, duties, working hours, salary, probation terms, and termination notice.
You must also outline statutory benefits such as rest days, paid annual leave, and sick leave.
Any change in terms must be agreed upon in writing.

Follow Minimum Wage and Working Hour Rules

Hong Kong sets a statutory minimum wage, updated regularly. As of now, it's HKD 40 per hour (verify current rate before hiring).

There is no legal cap on weekly working hours, but employers must provide at least one rest day per week.
Overtime pay is not mandatory unless specified in the contract.

Mandatory Provident Fund (MPF) Registration

If your employee is between 18 and 64 years old and works more than 60 days, you're legally required to enroll them in an MPF scheme.

Both employer and employee contribute 5% of the employee’s salary each month.
You must enroll new hires within the first 60 days of employment.
Failing to register or pay contributions can result in penalties.

Report Employee Income to the Tax Department

Each year, you must file an Employer’s Return to report staff salaries and benefits to the Inland Revenue Department (IRD).

You’ll also need to issue Form IR56B for each employee.
If someone resigns, you must file Form IR56F (or IR56G if they are leaving Hong Kong).

Comply with Termination and Severance Rules

Terminating an employee requires proper notice or payment in lieu.

Standard notice is one month, unless the contract says otherwise.
Employees with two years of service or more may be eligible for severance pay, depending on the reason for dismissal.

Missteps in termination—such as firing without proper grounds or notice—can lead to legal disputes.

How Much Does It Cost to Start a Company in Hong Kong?

Starting a company in Hong Kong is relatively affordable compared to other financial hubs. But the actual cost depends on whether you’re doing it yourself or using a formation agent. Here’s a breakdown of what you can expect to spend.

Government Fees (Required for All Companies)

Incorporation Fee (Companies Registry): HKD 1,545
Business Registration Certificate (1-year validity): HKD 2,250

Note: The government occasionally offers temporary fee waivers—check the latest updates on the Companies Registry website.

Total minimum government cost: HKD 3,795

Optional: Formation Agent Services

If you don’t want to handle the paperwork yourself, a formation agency can help.

Basic company setup (name check, filing, certificates): HKD 3,000–5,000
Packages with extras (registered address, company secretary, compliance reminders): HKD 6,000–10,000+ annually

Tip: Some agencies bundle in the government fees, so read quotes carefully.

Ongoing Annual Costs

Annual Return filing fee (Companies Registry): HKD 105
Business Registration Certificate renewal (yearly): HKD 2,250
Audit and accounting: From HKD 4,000 to HKD 10,000+ per year, depending on complexity
Company secretary (if outsourced): HKD 1,000–5,000 per year
Virtual office address (if needed): HKD 1,000–3,000 per year

Even if your company has no activity, you’ll still need to file an audit and maintain basic compliance.

Hidden Costs to Watch

Rejected bank applications: Some banks charge non-refundable application fees.
Re-submission penalties: Filing incorrect or late documents can lead to fines.
Translation or legal support: Extra cost if your documents need to be certified or notarized.

Using a Company Formation Agent vs. Doing It Yourself

When starting a business in Hong Kong, you have two options: handle the setup yourself or hire a company formation agent. Both approaches can work—but the right choice depends on your budget, experience, and availability.

Here’s how they compare.

Doing It Yourself: Cost-Effective but Time-Consuming

If you’re confident navigating government forms and procedures, registering a company yourself can save money.

Pros:

Lower upfront cost (you only pay official fees).
Full control over the process.
Good learning experience for first-time founders.

Cons:

You’ll need to handle document preparation, name searches, filings, and follow-ups.
Any mistake can delay approval or lead to rejection.
You must also arrange a local address and appoint a company secretary on your own.

Using a Company Formation Agent: Faster and Less Risky

Formation agents manage the entire setup—from paperwork to compliance.

Pros:

They ensure documents are completed accurately and submitted on time.
Most packages include a registered address, company secretary, and reminders for compliance deadlines.
Helpful if you're based overseas or unfamiliar with Hong Kong regulations.

Cons:

Additional cost, typically HKD 3,000 to 10,000+.
Quality varies between providers—some may upsell unnecessary services.
You still need to manage the business after setup; the agent doesn’t handle ongoing compliance unless you pay for it.

Which One Should You Choose?

If you’re already in Hong Kong and comfortable with legal forms, doing it yourself can work. But if you want to avoid errors or save time—especially from abroad—using an agent makes sense.

The key is to evaluate how much time you have and how complex your situation is. For most foreign founders, formation agents are the more practical route.

Common Challenges and How to Overcome Them

Setting up a company in Hong Kong is simple on paper. But in practice, many founders run into roadblocks—especially if they’re based overseas or unfamiliar with local systems.

Below are the most common issues and how to deal with them early.

1. Bank Account Rejections

Problem: Hong Kong banks are strict with Know Your Customer (KYC) checks. Vague business models, lack of local presence, or missing documents often lead to rejection.

Solution:

Prepare a detailed business plan, with invoices or client leads if possible.
Choose banks with better support for startups or non-residents (some offer remote onboarding).
Consider fintech or virtual banks if a traditional bank account isn’t critical at the start.

2. Misunderstanding Tax Residency

Problem: Some new business owners assume offshore income is automatically tax-exempt. But Hong Kong’s Inland Revenue Department (IRD) may still require proof.

Solution:

Keep clear records showing how and where each transaction took place.
Work with a local accountant early to prepare for audits or profit tax assessments.
Never ignore your first tax return—file it even if you have no income.

3. Overpaying for Services

Problem: Some formation agents bundle unnecessary services into their plans—such as overpriced address services, nominee directors, or annual renewals you may not need.

Solution:

Ask for a full breakdown before paying.
Compare at least 2–3 service providers.
If you only need basic setup, choose an agent that offers unbundled pricing.

4. Forgetting Annual Compliance

Problem: Missing annual return filing or business registration renewal leads to late fees and, eventually, deregistration.

Solution:

Set calendar reminders for deadlines like your incorporation anniversary and tax return due date.
Use a company secretary service that includes compliance alerts.
Don’t assume no activity means no filing—you still need to submit documents.

5. Hiring Without Understanding Local Laws

Problem: Founders bring on freelancers or part-time staff without following Hong Kong’s employment laws, leading to penalties or disputes.

Solution:

Issue contracts for all hires, even part-time or project-based.
Register employees with the MPF scheme if required.
Keep records of payments, holidays, and termination dates.

Final Thoughts: Is Hong Kong Right for Your Business?

Hong Kong is one of the easiest places in the world to start a company—but that doesn’t mean it’s right for every business.

When It Makes Sense

You need access to Asian markets, especially China and Southeast Asia.
Your company is international or online-based, with clients or vendors across borders.
You want low, transparent tax rates and minimal red tape.
You don’t need to rent a physical storefront or hire large local teams right away.

In these situations, Hong Kong offers speed, credibility, and a proven financial system.

When It May Not Be Ideal

Your business serves only your home market or a country that doesn’t benefit from Hong Kong’s tax treaties.
You expect high local hiring needs early on, and aren’t ready to navigate the employment system.
You plan to open a retail store and want foot traffic—Hong Kong property costs are high.

Ask Yourself Before You Register

Will your customers care where the company is registered?
Can you handle the ongoing compliance, or do you have someone to help?
Are you setting up for real business or just trying to create an offshore entity?

Answering these honestly will help you avoid costly mistakes—and make sure your company isn’t just easy to launch, but built to last.