A Complete Guide to Start a Business in Hong Kong 2023
Hong Kong is an economic powerhouse with a gross domestic product (GDP) of $369 billion, or approximately $49,000 per capita. This sizable economy makes the region attractive for global businesspeople. This article will describe how to start a business in this region so that you can tap into its enormous market.
Compelling Reasons to Start a Business in Hong Kong
- Strategic Location: This region is located next to Mainland China, one of the world’s biggest markets, and other major economic hubs in Asia. Thus, it offers a launchpad for businesses seeking a foothold in the Asian markets.
- Ease of Doing Business: This region emerged 5th in ease of doing business in the latest rankings by the World Bank. It is noticeably easy to set up and manage a company in the region.
- Favorable Tax System: The tax system for corporations is pretty straightforward. The standard rate is 16.5%, which is relatively low.
- Reliable Infrastructure: Despite being one of the most densely populated places, there are well-developed air and sea transport facilities and a network of industrial parks that corporations can rely on to move goods in and out.
Selecting the Right Business Structure
It is essential to think of how you want your company to be structured because that can greatly affect its operations. The most common structures to use include:
- Limited Liability Company: As the name implies, this structure offers limited liability, which means you won’t be personally responsible for debts or claims accrued by your firm. This is the best one to pick if you plan to seek outside investors.
- Partnership: This is when two or more people agree to incorporate a firm and share the responsibility of managing it. The partners will be personally responsible for debts or other claims that their firm accrues.
- Sole Proprietorship: This is simply a one-person show, and the sole owner is personally responsible for the firm’s liabilities.
How to Start a Business in Hong Kong
1. Choose the Legal Structure
The first thing to decide is how your firm will be structured. We have already mentioned the most common structures that you can use above and the unique characteristics of each one.
2. Choose a Name
Your company name is the first thing that differentiates you from competitors, so you should come up with a unique one for registration. You can use an English or a Chinese name, but a combination of English and Chinese characters is not allowed.
Avoid using a name that is already taken by another company or is similar to an established trademark. You can search the Company Registry’s website to see if your intended name is already taken by someone else.
3. Satisfy the Requirements
You must satisfy the legal requirements to register a firm which includes:
- Appointing at least 1 director who is a local resident;
- Appointing at least 1 secretary who is a local resident;
- A registered local office address;
- Valid identification and proof of residence for all owners and directors of the corporation.
If you don’t have someone to appoint as a secretary or director, Osome can provide one for you and also a local office address.
4. Submit Documentation
Once you have the required documentation, you can fill out the application form, submit it to the Companies Registry, and wait for a response. If your application is approved, you will receive a Certificate of Incorporation acknowledging that your firm is now recognized by the government.
Visa Application to Start a Business in Hong Kong
Foreign entrepreneurs can apply for a visa to allow them to reside in this region for work. The three main types of visas are:
- Investment visa.
- Employment visa.
- Quality Migrant Admission Scheme.
Have an Intact Business Plan before Starting in Hong Kong
You should not jump at the opportunity to start a firm in this region without having a detailed plan. Set clear goals ahead and decide how you intend to achieve them. Also, plan thoroughly on how you want to structure your company and which director(s) to appoint.
Hong Kong doesn’t rank high in ease of doing business for nothing. It is noticeably easy to form and manage a company here compared to other regions. We have shown you how to do that, and if you need help, you can consult Osome.