For decades, Hong Kong has been considered to have one of the freest economies in the world. With minimal bureaucracy and restrictions, Hong Kong is a fantastic place to set up a new company.
As an important financial hub, Hong Kong provides a competitive economy and is governed by a reputable international jurisdiction.
If you’re interested in learning how to incorporate a business in Hong Kong, then you’ve come to the right place. So keep on reading and we’ll walk you through everything you’ll want to know!
Come Up With a Company Name
The first step you need to take in incorporating your business is to come up with a name for the company. The name can be in English, Chinese, or both.
You’ll have to be cautious when picking a name. You can’t choose a name for your company that’s already in use or has been used in the past.
Pick a Legal Structure for Your Company
Before you register your business, you’ll have to figure out which legal structure you want to go with. You’ll want to know what your company’s requirements and needs are in order to make this determination.
The structure of your company will impact everything, from how you file taxes for your company to how you conduct your business.
Some popular structures include sole proprietorship, limited company, company limited by shares, and company limited by guarantee.
Register Your Company
If you want to know how to set up a company in Hong Kong, you need to understand the registration process.
First, you’re going to have to register with the Companies Registry.
This registry will be in charge of incorporating your business.
Most business owners decide to incorporate and register their business as a limited company in Hong Kong. This is because limited companies come with a variety of advantages.
A limited company is a separate legal entity and provides protection of personal assets from business risks. Also, compared to other kinds of business structures, the process of raising capital or funds and transferring ownership for limited companies is simpler and more straight forward.
When you’re going through the business registration process, you need to be aware of the ‘BR Fee.’ This comes up when you register a business in Hong Kong.
This is a fee that you pay to the Inland Revenue Department of Hong Kong. It acts as a governmental fee for registering a branch or business in Hong Kong.
Incorporate Your Business Entity
It’s fairly easy for someone to open a business in Hong Kong. However, you need to submit the necessary forms before you can incorporate your business. You’ll need a signed incorporation form by the authorizing partners, proof of address, and a copy of your identification records.
In order to register and incorporate your business, you’ll have to pay application fees. You can submit your forms online through Hong Kong’s Companies E-registry. You can also send a hard copy to the government department.
Open a Company Account
One of the most important things that you need to do after you incorporate is to get access to financial services. This is in order to start paying for your business ventures.
The process of opening a personal bank account is very easy. However, you’re going to need to have a lot of documents and papers to show to the bank that you’re the owner of a business.
Let’s go over some of the forms that you’ll need when you go into the bank.
First, you’ll need the registered address of the company. Practically all of the banks in Hong King will require this. They’ll also need the contact information of all of the business owners and the company itself.
You’ll also need the incorporation documents of the business and a certified true copy of your company’s identification documents.
You’ll also have to provide the bank with proof of business. This includes a business plan or audited financial statements. They will also expect to see details of ultimate beneficial owners for nominee shareholders/stockholders of the company.
Lastly, they’ll need a certified true copy of the company’s Business Registration Certificate.
Insurance and Pension Requirements
Before you begin your new business in Hong Kong, you will need to also enroll your workers in a Mandatory Provident Fund (MPF) scheme. This is required under the ordinance of Employees Compensation.
This ordinance shows that you have a proper policy in place that will cover all of the employees of your company. It also means that all of the employees who are working for your company, either full-time or part-time, are at least 18 years old.
Annual Filing Requirements
You will need to follow all of the regulations and rules that surround the annual filing for your company. You’ll want to know about the deadlines set by the Companies Registry.
You’ll have to file an annual return every year according to the Companies Ordinance. You’ll also need to file a tax return to the Inland Revenue Department (IRD) every year.
The Importance of Knowing How to Incorporate a Business in Hong Kong
Hopefully, after reading the above article, you know understand how to incorporate a business in Hong Kong. As we can see, it’s fairly straightforward and easy to learn how to register a business in Hong Kong, so long as you abide by all of the rules and regulations set by the government.
Are you looking for other helpful business articles? Make sure to check out the rest of our site today for more!