So you’re thinking of incorporating your company in Hong Kong (congrats!).
Like with all other legal processes, it can be overwhelming when trying to learn more about what you’ll need to expect.
To help, we took a shot at answering the most frequently asked questions about company incorporation and company formation in Hong Kong. This guide, while not a substitute for professional legal advice, will help you understand at a high level the process in Hong Kong, and prepare you with the knowledge and resources you’ll need to get started.
In this guide
- Incorporation Basics
- Incorporating in Hong Kong
- Working with Neat to Incorporate
What is company incorporation?
Firstly, what does it mean to incorporate your company?
Basically, an incorporated business is a legal entity that’s separate from its owners and shareholders.
With an incorporated company you can open a company bank account, distribute or sell shares, and separate your personal assets from the company's. This means, for example, that shareholders, directors, executives and employees can’t be held accountable for debts that the incorporated company incurs (provided they're running the company ethically, of course).
When should you incorporate?
In general, it’s best to incorporate sooner rather than later – ideally even before you start your business. That way you start off on the right foot with your brand looking professional and ready for business.
Here's a handy resource: Why You Should Incorporate From the Get-Go.
What’s the difference between a sole proprietorship v.s. limited liability company?
Sole proprietorships are typically the business structure of choice for one-person businesses, such as freelancers.
If you’re looking to grow beyond a one or two-person team, incorporating into a limited liability company will, in addition to protecting your assets, give your brand more credibility and professionalism, as well as make your company more attractive to partners and investors.
Incorporating in Hong Kong
What are the benefits of incorporating in Hong Kong?
There are many reasons why it could be a smart move for you to incorporate your company in Hong Kong, but here are the top three.
- It’s inexpensive to set up. Incorporation and company registration fees are in fact lower than most other jurisdictions
- Taxes are low. On profits more than HKD$2 million, corporate taxes are just 16.5%, and any profit earned outside of Hong Kong isn’t taxed at all (more specifics here).
- It’s a global business centre. Hong Kong has a fast-growing startup ecosystem and is strategically placed near China and Southeast Asia.
Read this for more on benefits of incorporating in Hong Kong.
Can a foreigner/Hong Kong non-resident incorporate a company in Hong Kong?
Absolutely! Shareholders and directors don’t have to be Hong Kong nationals or need to reside in Hong Kong.
Do I have to physically be in Hong Kong?
Technically no, because you can submit all your incorporation documents online via the 24-hour Companies E-registry portal. However, after you incorporate, in order to open a bank account, most banks will require you to come in person with hard copies of all your documents.
Many entrepreneurs who are looking for a digital alternative to a traditional bank account, choose Neat Business.
So while you're not required to be in Hong Kong to incorporate your business, it's worth noting that Hong Kong is undeniably a great place to live and start a business. Hong Kong's entrepreneurial and startup ecosystem is growing rapidly, with numerous co-working spaces and accelerators, as well as an urban, cosmopolitan society.
Where do I submit my incorporation documents?
If you're handling your incorporating your company yourself, you can submit your incorporation documents two ways:
- Online through the 24-hour Companies E-registry
- In person here:
Companies Registry 14th Floor
Queensway Government Offices
66 Queensway, Hong Kong
However, most people choose to hire a professional service provider to take care of all of this on their behalf.
What is required to open a Hong Kong company?
- 1 shareholder
- 1 director (one of which has to be a natural person, not a company)
- 1 licensed company secretary
- 1 Registered address
- Completed NNCI and IRB1 forms
- Significant Controller Register
- Certificate of Incorporation (HKD1,720) and Business Registration (HKD2,250)
You can find all the required forms here.
How long does it typically take?
It’s fairly quick. If all your documents are complete, online applications can be processed in an day. If you send hard copies, it’ll be around 4 working days.
What is the role of a company secretary?
While directors and shareholders don’t need to be Hong Kong residents, every incorporated company must have a Hong Kong-based company secretary. This isn’t the type of secretary who answers the phone or does clerical work – your company secretary’s role is to maintain company books and records, as well as make sure the company remains compliant with all statutory requirements.
You can choose to hire a local firm to act as your company secretary, and most will provide you a local business address as well.
Do I need to hire a professional firm?
You’re not legally required to work with a professional incorporation service, and if you want, you can do it entirely yourself. That being said, while incorporating in Hong Kong isn’t necessarily difficult, most people do opt to work with a professional firm. It’s much easier to pass the work onto people who have done it before.
Do I need to learn Chinese?
Nope! Everything from applying to managing your company can be done in either English or Chinese.
Company Formation: Working with Neat to Incorporate
One of the biggest challenges entrepreneurs face when incorporating in Hong Kong is in fact the step after: opening a bank account. It can take weeks (and even months), and often times startups and SMEs get rejected.
Neat’s incorporation package takes care of the whole process, paperwork, plus directly opens a Neat Business account at the same time.
Neat’s incorporation bundle is perfect for entrepreneurs who:
- Prefer a modern online application process (ours takes about 10 minutes!)
- Want to secure a business account as soon as they incorporate
- Don’t live in Hong Kong
- Prefer to hand off the work to people with more expertise
Have more questions about incorporation? Feel free to send us a message at email [email protected]! We’ll be happy to help.