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Open an E-Commerce Company in Hong Kong

Open an E-Commerce Company in Hong Kong

By Vlad Cuc, specialist in company formation matters 

Hong Kong is one of the most suitable locations to open an online business. With a highly developed network and favorable regime for companies in general, the Special Administrative Region has a supporting infrastructure for all types of businesses, location-based ones as well as online companies. 

Online shopping platforms in Hong Kong are growing in popularity. The demand is high on web platforms and mobile apps and customers often prefer this means of purchasing various types of goods.

E-commerce startups in Hong Kong enjoy a favorable business regime. However, even though these companies have generally lesser requirements than those with a physical presence, it does not mean that they are not required to comply with the full spectrum of business regulations in Hong Kong.

We present some of the most important issues to take into consideration when opening an e-commerce or an online business. Moreover, our team of agents specialized in company formation in Hong Kong can help local and foreign investors handle all of the formalities for incorporation. 

Online businesses in Hong Kong

Hong Kong is not only attractive for investors who want to open a traditional business venture, it is also a destination for online businesses. Those who open an e-commerce company in Hong Kong benefit from the city’s tax advantages as well as from its ongoing evolution as a leading center for internet entrepreneurship.

The e-commerce industry in Hong Kong presente a varierty of opportunities for investors, and it is suited for several business fields, with a focus on selling goods. Compared to traditional businesses, opening an online business is more accessible because of the lighter initial investments. Internet entrepreneurs can request the services of our Hong Kong company formation agents for questions and help regarding the setup and functioning of an online business in the city.

The video below describes the process of setting up an e-commerce company in Hong Kong:

Your e-commerce company in Hong Kong

Hong Kong’s advantages as an online business location include various traits, starting with the internet usage rate to the number of smartphone users and ending with the city’s good taxation system. The most important reasons to choose Hong Kong as a base for your online business include:

  • – potential clients: a large number of internet users and internet usage at a business level and in terms of individual/private customers.
  • – start-up costs: the costs for opening certain types of companies in Hong Kong is low compared to other jurisdictions.
  • – low taxes: Hong Kong is known as one of the locations in the region with the lowest corporate income tax rate for businesses. 
  • – secure banking: as a financial center, Hong Kong is known for a high presence of bank branches and the levels of banking and financial transactions security. 

Examples of successful e-commerce start-ups in Hong Kong include online shops for clothing, accessories, luxury items, books or interior design items. The list of potential services and products is left to the imagination of the founder and those who are able to respond to an existing and previous unanswered need have the change of creating an important client base. For example, some online businesses can simply aggregate existing offers or coupons and other types of services and present them in an accessible manner to clients. 

Regardless of the types of services offered by the online platform, they should be designed to improve the online shopping experience. Shoppers can customize or even design their own products and some platforms give their users the opportunity to interact with each other.

The fact that Hong Kong has a reliable technology infrastructure and advanced information systems are important advantages for those interested in starting an online business. The Special Administrative Region allows for the free flow of information, unlike some situations in Mainland China. Moreover, the data privacy and the internet readiness are also important factors that are advantageous for investors. Hong Kong is also a city that attracts international talent, meaning that business owners who need qualified IT specialists can hire developers, designers and other employees in order to develop the online platform. Having a professional and dedicated team is as important for an online business as for a traditional one.

Hong Kong businesses

Your online business in Hong Kong should have a sound management scheme and your new website should be optimized for all mobile devices: smartphones and tablets. In order to have a successful e-commerce business, you will need to provide secure payments and excellent user experience.

When starting an online business, investors will most likely open a private limited liability company. This is a preferred business form because it is suitable to small and medium-sized businesses and it is a separate legal entity form the founders. The shareholders are only liable up to the amount they have invested in the business. For this type of company shares are easily transferred (only between members, they are not listed to the public). If the company grows and the founders wish to make it public, they can convert the business form into a public limited liability company. 

Below, our team of agents who specialize in company formation in Hong Kong describe the basic steps for opening a private limited liability company:

  1. Choose a company name: it has to be a unique name and the availability can be checked beforehand using our online tool.
  2. Appoint the directors: this type of company has at least one director and he can be a foreign national.
  3. Appoint the company secretary: this is a mandatory step for opening a private limited liability company.
  4. Prepare the company documents: these are the Articles of Association which contain all of the information about the company.
  5. Apply for registration: the company documents, along with the filled in application form are submitted to the Company Registrar.

The company can start its business activities once it obtains the Certificate of Incorporation.

Company registration in Hong Kong is as easy for foreign investors as for local ones. Foreign entrepreneurs can start an online business with no requirements for residency and the business can be 100% foreign owned.

Opening an online business can be an easy and convenient way to reach a wide range of clients, not only from Hong Kong but from the surrounding countries as well as globally. Incorporating in Hong Kong will offer a certain level of credibility, as the city is known as a business and financial center.

E-commerce companies are required to follow the general accounting and annual reporting rules in Hong Kong. Paying taxes is important for all companies, including online businesses, and our CPA in Hong Kong is able to answer your questions on this matter. With the help of our team, your e-commerce business will remain fully compliant with the laws in force and will make timely mandatory tax payments. 

Our Hong Kong company formation consultants can provide you with solutions for your e-commerce business. You can contact our representatives for more details about how to choose the most suitable business form for your future company and our partner SEO specialists who can help you open and optimize your website.