Our company formation consultants in Hong Kong can help you establish a liaison office and make the first steps towards establishing a successful business in Hong Kong.
| Quick Facts | |
|---|---|
| Best used for | Advertising and promotion activities |
Prohibited activities | Commercial activities |
Name | The liaison office will use the name of the foreign company, followed by adequate attribution to indicate its nature. |
| Legal entity | No |
| Judicial capacity | The representative office is not a legal entity, it cannot be a party to legal proceedings. |
| Liability | The foreign company is liable for its Hong Kong liaison office. |
| Types of companies that can use a liaison office | Small and large businesses alike, interested in testing their opportunities in Hong Kong. |
| Limitations on foreign companies | There are no restrictions on the type of foreign company opening a liaison office, or its country of registration. |
| Local representative | The liaison office will have an appointed agent or representative to run its local operations. |
| Subject to taxes | No |
| Subject to reporting | Not applicable, as there is no income derived from Hong Kong. |
| Registration | No registration with the Companies Registry is required. |
| Alternatives to the Hong Kong representative office | Subsidiary or branch creation Company formation in Hong Kong |
| How can we assist you | We help companies set up their presence in Hong Kong through a liaison office or another chosen business form. |
| When to contact us for assistance | As soon as the company founders/Board decides to engage in marketing/promotional activities in Hong Kong. |
Table of Contents
What is a liaison office in Hong Kong?
A liaison office, also known as a representative office, is a way to enter the Hong Kong market and establish a physical presence in order to understand the business environment and evaluate the business opportunities. This office offers the opportunity to develop and maintain a connection with future business partners and customers before deciding to open a Hong Kong company.
What are the key characteristics of a liaison office?
The liaison office is not a legal entity per se; it is merely an option to enter the market and test it for suitability.
The following features are important and are worth taking into account by all companies interested in registering their representative office in the Special Administrative Region:
- The liaison office does not have legal personality or capacity, nor does it have judicial or procedural capacity (in cannot be a part to legal proceedings and it cannot defend its own interests before court);
- The parent company abroad remains liable for this office it opens in Hong Kong;
- It can only be used for marketing, promotional, or client service activities;
- The representative office in Hong Kong cannot engage in commercial activities, even if they are the same ones performed by the parent company abroad;
- It does not require a minimum capital and, as it does not derive income, it is not subject to corporate income tax;
- It has an appointed representative, designated by the foreign company’s Board, who oversees the activities of the office in Hong Kong.
What are the limitations of a Hong Kong liaison office?
Companies looking to expand their activities to Hong Kong should note the following:
- A liaison office is restricted in terms of commercial activities, meaning it cannot engage in commercial transactions;
- The parent company is the one to provide the capital for the office’s activities;
- The representative office cannot be used for import/export operations;
- The liaison office is not a legal entity in itself, meaning it cannot enter into commercial agreements. Any contracts are signed between the foreign company and another party;
- Although not required to follow through with a business registration procedure as complex as in the case of company formation in Hong Kong, the liaison office is still required to comply with certain regulatory requirements (namely those restricting its activities).
How do I set up a liaison office in Hong Kong?
A representative office in Hong Kong will have to be registered with the relevant authorities and obtain a business registration certificate.
According to the Business Registration Ordinance, registration applications are made within 1 month of the commencement of the activities (at the branch, office, or otherwise). This means that companies that set up a liaison office in Hong Kong must observe the requirements for the timely notification (and registration) of their activities in the HKSAR.
Find out more about the representative office from this video presented by our experts:
Must I provide a share capital for the representative office?
No. Minimum capital requirements are not in place for this simple business form.
Companies interested in exploring their options on the Hong Kong market should, however, prepare an adequate budget that will allow them to engage in market research and liaison activities, as well as those related to hiring local or foreign staff to work for the liaison office.
Must I open a bank account for the liaison office?
This can be required in order to manage operational expenses within Hong Kong. Our team can assist with bank account opening, as per our available packages:
- Physical company bank account opening (with mandatory physical presence in Hong Kong) for a fee of USD 1,000;
- Digital bank account opening in Hong Kong for a fee of USD 500.
Foreign companies opening a bank account in Hong Kong to handle local operational expenses related to their liaison office must provide adequate documentation such as their registration certificate and articles of association, invoices, and information about the assigned representative.
Can I hire employees for the representative office?
Yes. The liaison office can hire staff, as required to engage in its specific marketing and/or research and networking activities.
The business owner running the office will also have to apply for a work/employment visa in Hong Kong for the time he or she wishes to run the liaison office and be the designated representative of the office.
Must I pay taxes for the liaison office?
No. The representative office does not derive income from Hong Kong; therefore, it is not subject to the corporate income tax.
Our experts in Hong Kong can provide complete incorporation services for a representative office in Hong Kong. For more information and personalized advice, you can contact our Hong Kong company formation specialists.