If you are an entrepreneur, I bet Hong Kong sounds pretty good as the location of your next startup. And why wouldn’t it? The setup for a HK company is a fairly straightforward process, as demonstrated by the region’s increasing popularity in the last 20 years. Ranking 3rd in the World Economic Forum’s Competitive Index http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf and the number of registered companies greatly exceeds 1,500,000. This does not simply happen for one good reason, but for several great ones, as you will find out below.
Setup HK company – A breeze!
Hong Kong is deliberately kept as a free economy. The restrictions and taxes (yes, taxes!) are kept to a minimum, and entrepreneurs can also benefit from an uncomplicated bureaucracy that simply makes sense – unlike most other places. This inevitably implies safety for your business, but also provides a fertile environment in which it can strive.
Even location-wise, Hong Kong successfully combines distinct advantages that are difficult to come by in most other places – it benefits from the British tradition of no-nonsense protocols, it functions as a port for reaching both the effervescent Asia Pacific region and the massive market that is provided by mainland China. All in all, setting up a company here just makes sense on all fronts, and if you are prepared, there are but a few steps to make such a dream a reality!
Steps you need to take:
Now, bear in mind that some of these are just your run-of-the-mill company set up necessities, not entirely specific to Hong Kong, but they are, nevertheless, important ones.
First, you need to land on a company name (and make sure it’s not already taken). NB. You also need to make sure the same name has not been in use at another time!
The name can simply be in English, or Chinese OR both, why not?
While you are at this, it would probably be best to also decide on a legal structure for your business. This, of course, will be highly dependent on your company’s scope and requirements since this will affect almost all of the company’s operations – from the way you conduct your business per se, to the way you file your taxes, and so on. This is not a step to be taken lightly, so make sure you do your research beforehand.
The second step is to register your company with the Companies Registry. Their user-friendly official website is at your beck and calls for some inquiries: https://www.cr.gov.hk/, so do consult it to double-check what you need both from a legal point of view and regarding fees. But you don’t need to worry – the process is quick and can be done entirely online!
Speaking of which, you are going to want to incorporate your company as well. This, too, can be done strictly online, and all you need are a few forms such as copies of the directors and shareholders’ IDs, proof of address, and an Incorporation form, signed by the authorizing partners.
After all, this prepping it is finally time to get your business up and running. To do that, we must talk about finance, and that quite obviously means opening a Hong Kong bank account. This does involve a fair amount of paperwork, and it technically does involve having contact the old-fashioned way – face to face with a bank teller. However, if you are a foreigner and need a little bit of extra help in setting up a bank account, you can consult this step-by-step: https://asiabc.co/blog/2018/07/apply-for-business-bank-account-in-hong-kong-for-non-residents/.
Provide all the needed permits and licenses. Again, these are going to be very specific, depending on the services your company is about to provide. The best way to find out which of these might apply to you is to peruse the official government website which offers a treasure trove of information on this subject, including necessary forms: https://www.gov.hk/en/business/registration/license/index.htm
Before starting up actual operations, you need to be confident that you abide by the Hong Kong laws when it comes to enrolling your employees in the Mandatory Provident Fund.
Last but not least, on the unpleasant subject of taxes for which you can find out up-to-date, relevant information here: https://www.gov.hk/en/business/taxes/profittax/index.htm, and lest you forget – always follow the rules and regulations of the annual filing requirements and deadlines as set up by the Companies Registry.