Our specialists in company formation in Hong Kong can help foreign investors who want to incorporate any type of company in this jurisdiction.
Types of companies
which can be started by foreigners
Private and public companies limited by shares
Private and public unlimited companies with a share capital
Companies limited by guarantee
Minimum share capital
for LTD Company and Paid-In Requirement
Minimum number of
shareholders for Limited Company
|Time frame for the incorporation
2 working days
|Corporate tax rate
– 8.25% on the first 2 million HKD of profits;
– 16.5% on the remainder of the assessable profits.
|Dividend tax rate
0%; No withholding tax applies on dividend payments made by a Hong Kong company to another resident or non-resident company.
There is no VAT or sales tax.
|Number of Double Taxation Treaties
|More than 40 double tax agreements.
|Do you supply a Registered Address?
|Local Director Required
|Annual Meeting Required
|Yes, however, the Companies Ordinance provides for a number of exceptions.
|Is Accounting/Annual Return Required?
|Any Tax Exemptions Available?
|Interest income and trading profits derived from long term debt instruments are not included in the assessable profits; other sums can also be excluded.
|Any Tax incentives Available?
|Incentives for employment (youth employment, elderly, middle-aged job seekers and people with disabilities).
Types of companies in Hong Kong
Company incorporation in Hong Kong is simple across all of the available types of companies and and being aware of their characteristics and differences is a key step before deciding to start a business in this location.
Decide on a company type by answering the following questions:
- Do I need an IBC (offshore) or a regular HK company?
- What is the purpose of the business?
- What is its size?
- What is the minimum capital needed to start a business?
- What is the founder’s degree of liability?
The company types are the following:
- Limited liability companies: these can be public or private and they are separate legal entities; the founders are thus protected against business risks and have limited liability.
- Sole trader: the simplest business form and also the one with the highest degree of liability; it is incorporated by a single individual.
- Partnership: a business structure formed between two or more partners in which at least one of them has full liability.
Small and medium companies are set up in the form of the private limited company – the most widely used business form. The advantages and the particularities of a private limited company are listed below by our company formation experts in Hong Kong:
- It is a separate legal entity and the founders have limited liability, as previously stated; should the business not succeed, the shareholders lose their investment in the company (the shares they hold);
- The company’s share capital is divided into shares that correspond to a certain class; these classes are described in the company’s constitutive documents (the Articles of Association);
- The company’s shareholders are entitled to a percentage of the company’s profit in the form of dividends, distributed accordingly;
- It can easily raise capital; it is also easy to transfer its ownership;
- The LLC has perpetual succession;
- A limited liability company offers an overall positive business image; these types of companies are better perceived in the business world (are more credible) when compared to other business forms such as the sole trader or the partnership.
Foreign companies interested in expanding their operations to Hong Kong have another option besides setting up a company in Hong Kong. They can open branches or representative offices, both used as an extension of the foreign company abroad that do not have legal identity or capacity in Hong Kong (they are not recognized as separate legal entities, the foreign company is liable for their debts and obligations).
The corporations, in either the form of a private or a public company, are the ones that are available to purchase as shelf companies and they are the business forms that are used by investors who wish to open a company in Hong Kong as an offshore company.
Steps for company formation in Hong Kong
We present the necessary procedures for investors who start a business in the HKSAR:
- Choose a type of company: this is a choice based on how large they wish the company to be, as well as the capital that the investors have access to; the business type can be changed later on, as the company grows.
- Choose a company name: the company name must be an original one; a name checkup can be performed.
- Draw up the company documents: the Articles of Association and any other company Resolutions are drafted during this step.
- File for registration: the documents and a filled in application form are submitted to the Companies Registry; among the required documents, the founders will also need to include copies of their identification documents. If the documents are submitted as per the current requirements, the Business Certificate is issued in approximately one week.
- Register with the Inland Revenue Department: for investors who open a company in Hong Kong, an important and mandatory stap is that it needs to be registered for tax purposes.
- Obtain any other permits and licenses: this step will depend on the chosen business field; special arrangements for hiring employees must also be made.
Costs for company formation in Hong Kong
Before starting the incorporation process, you should know the main costs of forming a new company in this jurisdiction. Our incorporation agents present them below:
- Company formation fee – investors who use our services will pay from 500 to 1,000 EUR fee;
- Virtual office costs – the virtual office package offered by our company formation experts costs approximately 51 euros/month;
- Accounting costs – the approximate costs for accounting services in Hong Kong are 100 EUR/month;
- Registration fee – the Companies Registry imposes an estimated fee of 1,720 HKD (around 195 euros) for setting up a company in Hong Kong;
- Minimum share capital – there is no mandatory requirement for a minimum share capital in Hong Kong, however, it is common for the minimum issued or paid-up capital to be one share with the value of one HKD (approximately 0.11 euros).
While accounting services are not a fee related to company formation, they are a subsequent cost that should be taken into account.
Some additional costs to consider
A new company in Hong Kong will need to be prepared for additional costs apart from those related to the minimum share capital and the incorporation fees.
Some examples include the following:
- Renting an office – office rental costs per square meter (as estimated for Q2 2023) depend on the chosen district and can start from HKD 496 in the Quarry Bay district to HKD1,003 in the city’s Central district;
- Renting a virtual office – costs from HKD 1,200 per month to HKD 1,800 per month (depending on the chosen package services );
- Accounting fees can start at HKD 6,000 per year ;
- Fees for the registration of the annual returns: start at HK$ 105 (depending on the delivery time following the company’s return date ).
Corporate taxation in Hong Kong
Company formation in Hong Kong is attractive for many reasons, however, an important one remains the attractive taxation regime for companies.
Below, our team highlights the most important taxes for companies:
- the standard corporate income tax rate is 8.25% for corporations and a lower rate of 7.5% applies in the case of unincorporated businesses; these corporate income tax rates are in place for the first HKD 2 million of the company’s assessable profits;
- the remaining assessable profits are taxed at 16.5% or 15% for unincorporated businesses;
- Hong Kong does not impose a withholding tax on dividend payments;
- Hong Kong does not impose value-added tax or sales tax;
- The employer and the employee make mandatory social security contributions of 5% of the employee’s income;
- Hong Kong does not impose a payroll tax ;
- Hong Kong has signed approximately 45 double-taxation agreements with countries around the world.
Foreign-sourced income is usually not taxed, however, a refined foreign-sourced income exemption (FSIE) regime entered into force starting with 1 January 2023, and it is expected to be amended with further additions, effective 1 January 2024.
Hong Kong’s economy in 2023
We present below a set of recent statistical data on the economic situation and trade information on Hong Kong highlighting the region’s attractiveness and robust recent development:
- Hong Kong’s GDP grew by 1.5% on a year-on-year basis in the second quarter of 2023;
- The forecasted economic growth for 2023 is 4.0% to 5.0% in real terms, as projected by the Government;
- Retail sales increased by 16.5% on a year-on-year basis in July 2023;
- The labor market improved between June and August 2023, an effect of the improved economy.
Frequently Asked Questions about setting up a company in Hong Kong
Yes. Any individual can open a Hong Kong company, regardless of nationality. Foreign investors have the same investment rights and obligations regarding company formation.
Yes. The company needs to have a registered address in Hong Kong. Foreign companies can also choose to open a branch or representative office which will also have to be based in the city.
No minimum capital, however, companies that have a share capital must state the capital and initial shareholdings in the Articles of Association.
– The Incorporation Form (depending on the type of company that is incorporated);
– A copy of the company’s Articles of Association;
– The Notice sent to the Business Registration Office.
Our team can give you more details about the documents for the application, as well as the current application fees.
24 hours for online applications submitted to the Companies Registry. Contact our company formation consultants for specialized consultancy in order to make sure your business is law-compliant.
For some activities, yes. Special permits and licenses are required for businesses that sell or prepare food (restaurants and other food shops), those that sell non-food goods (electrical appliances, firearms, chemicals, materials, and others) as well as for those companies that provide various services (amusement, construction, education, financial services, land and air transport and others).
Furthermore, companies that perform activities related to offering nursing home care services and those engaged in activities that have an impact on the environment are required to obtain more than the regular business registration permit. These special permits or licenses are issued by the relevant Hong Kong authorities and one of our agents can help you apply for these.
Hong Kong does not impose a VAT, sales tax, or goods and services tax (GST), as one may find in other jurisdictions. Therefore, no VAT registration is in place.
The fact that the city is a Special Administrative Region of China has not affected its political and economic stability. Hong Kong is the main gateway to Mainland China and this is one important location advantage. Here are the main reasons for setting up a company in Hong Kong:
– Strategic location in Asia
– Numerous business opportunities
– Great infrastructure
– Advantageous taxation regime for companies and individuals
– Qualified workforce
– High standards of living
Hong Kong is not a tax haven in the traditional sense, like Belize or Seychelles, but it is a jurisdiction that has low taxes for companies, and this has been very important in its ability to establish itself as a financial and business center. A large number of double tax treaties that also include a clause for the exchange of information grant commercial transparency as well as protect investors from double taxation.
Please ask our specialists in company formation in Hong Kong for more details about setting up a company in this jurisdiction.