How easy is it to open a business in Hong Kongas a foreigner and what are the advantages? This article lists the main reasons why foreign entrepreneurs are finding it easy to run a business here. For details on the actual incorporation procedures, you can read our guide on Hong Kong company formation.
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Ease of doing business in Hong Kong
Hong Kong is ranked as one of the easiest countries in the world for doing business for foreigners. The World Bank Group’s Ease of Doing Business Index evaluates and ranks economies from around the world based on key criteria.
In 2020, Hong Kong had an overall ease of doing business rank of 3, meaning that only two other evaluated economies in the world were more welcoming to foreign investors. Those who start a business in Hong Kong as a foreigner enjoy several advantages, among which we can mention:
- An overall easy process to start a company in Hong Kong;
- The same rights to do business regardless of nationality;
- Access to business incentives, as they apply across different industries;
- Straightforward tax requirements and a general ease of paying taxes;
- Access to modern infrastructure;
- Easy trading across borders for investors who open a business in Hong Kong as a foreigner.
| Quick Facts | |
|---|---|
| Entry requirements for EEA citizens | No visa requirement for short tourism or business trips. |
Entry requirements for non-EEA citizens | Generally require a visa to enter Hong Kong even for short-term purposes. |
Mandatory residency required to open a company in Hong Kong as a foreigner | No mandatory residence conditions are linked to the ability to open a company in Hong Kong. |
| Residency by investment scheme available | Under the Investment as Entrepreneur Scheme |
| Minimum investment amount for residency by investment (if applicable) | Not applicable, however, the authorities will determine if the amount of capital investment in Hong Kong is sufficient for the proposed business. |
| Relocation with family members for foreign investor residence permit holders | The holder of the Investment as Entrepreneur permit can bring his/her spouse. |
| Types of companies available to foreign investors | Private limited company, partnership, sole trader |
| Full foreign ownership permitted (Yes/No) | Yes |
| Operation costs in Hong Kong | Include the monthly office rental costs (varying according to location), the company registration fee (HKD 1,545 for electronic submissions), other levies. |
| Payroll costs in Hong Kong | 5% of the salary payable to the Mandatory Provident Fund scheme to which other types of insurance and benefits can add up. |
| Accounting costs (approx.) | Depending on the company’s size. Examples include HKD 3,500 per year for basic services. |
| Employment costs (minimum salary) | Median monthly wage HKD 19,800. Can be subject to change. |
| Office rental costs (approx.) | Between HKD25 – 60 per sq. ft per month |
| Number of companies incorporated each year (approx.) | 145,053 new local companies were registered in 2024. |
| Regulatory environment makes it easy to open a business in Hong Kong as a foreigner (Yes/No) | Yes |
Minimum steps required to start a business in Hong Kong
Setting up a company in Hong Kong, a special administrative region of China is a streamlined process and one of the main reasons why it is advantageous to start a business in Hong Kong as a foreigner.
The infographic below summarizes some of the conditions:
Below, our team lists some of the main reasons why starting a business in Hong Kong is accessible to foreign entrepreneurs:
- < 1 day to register: it is easy to start the online procedure to register a company with the Companies Registry. This short time to complete is possible provided that the founder(s) have already chosen an available business name and have prepared the documents;
- 1 day to complete other procedures required to hire employees in Hong Kong;
- No paid in capital: the limited liability company, the most commonly used business form, does not require a minimum paid-in amount to start the business;
- No Hong Kong residency requirements: you do not have to reside in Hong Kong in order to be able to open and run a business as a foreigner;
- A strategic location: not only is Hong Kong a gateway to the Chinese market, it is also strategically located within the Asia Pacific region.
Hong Kong has long been regarded as a top business hub, with no restrictions on foreign investment or company ownership. Moreover, its international business climate is supported by the fact that English is one of the two official languages in the Special Administrative Region.
Our team presents a short video on this topic:
Low taxes and easy company compliance in Hong Kong
Once the business is registered, the founders are required to observe the accounting principles and the annual financial reporting. This is not troublesome for investors, as companies of all sizes, including SMEs work with an accountant in Hong Kong. This ensures compliance with the HKSAR financial reporting standards.
The tax regime in Hong Kong presents another advantage for a person who will open a business in Hong Kong as a foreigner. The corporate income tax rate is relatively low, and the total number of taxes is not as high as those in other jurisdictions.
All Hong Kong companies are required to pay the following taxes:
- The reduced corporate income tax rate for businesses on the first HKD 2 million of assessable profits;
- The 16.5% corporate income tax rate on the remaining profits;
- 0% dividend withholding tax;
- No VAT.
In addition to the low tax regime, the HKSAR also encourages foreign investments through tax regimes tailored to specific business activities, such as concessionary tax rates or enhanced deductions.
Contact us for more information about the advantages of doing business in Hong Kong as a foreigner. We can also help you with registering a company in Canada through our local experienced partners from BridgeWest Canada.