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Set up a Liaison Office in Hong Kong

Set up 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.

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. 

Investors should note that the liaison office in Hong Kong is not the same as opening a company. It usually is a step that precedes the decision to set up a company in Hong Kong, and it is subject to certain limitations.

We encourage companies interested in testing the Hong Kong market to explore their options of setting up a representative office by discussing with our local team of company formation experts. Our agents will be able to answer specific questions and provide more information than it is offered in this article (according to details that suit the particular needs of the company interested in expanding to Hong Kong).

Entrepreneurs who are already interested in setting up a company in Hong Kong can reach out to us as soon as they decide to incorporate. We also offer related services, such as assistance with virtual offices.

Liaison office: key features

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.

Given the aforementioned limitations on commercial activities, the liaison office can be used only for specific purposes, and ones that are justified when a foreign company has the goal of testing the Hong Kong market before engaging in the more complex steps of setting up a branch or a subsidiary.

The branch is oftentimes the preferred choice to the liaison office in Hong Kong. This is because the branch, while it remains under the control of the parent company and the latter is also liable for any debts and obligations, it can engage in commercial activities (the same as those of the foreign company) and derive income from its Hong Kong clients.  

Liaison office registration 

representative office in Hong Kong will have to be registered with the relevant authorities and obtain a business registration certificate. 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. 

Our company registration representatives in Hong Kong can help you with this procedure and can also help you open a bank account in Hong Kong. The foreign company that wishes to open a representative office in Hong Kong will need to provide its incorporation documents and also copies that prove the identity of the representative officer. The application documents will need to be signed by the company director.

Find out more about the representative office from this video presented by our experts:

Our Hong Kong company formation agents can help you open a liaison office in Hong Kong. Our team will give you all the needed assistance to set up your office as soon as possible. It is important to know that a representative office cannot engage in economic activities that generate profit. Business owners who want to perform various business activities right away can choose to open a private limited company.

Company formation in Hong Kong

As previously mentioned, company creation is the option of choice for investors or foreign companies that wish to engage in business and commercial activities as soon as the chosen business form is registered in Hong Kong.

A company, or a shelf company for those considering the option of purchasing an already registered business entity, will provide the foreign company (or investor) with the ability to derive income from Hong Kong.

Setting up a company in Hong Kong is performed according with the Companies Law and the mandatory requirement of registering the new legal entity with the Companies Registry.

Additionally, commercial companies are subject to the following taxes:

  • corporate income tax: 8.25% on the first HKD 2 million and 16.5% on the rest of the profits;
  • 5% mandatory social security contributions, subject to conditions;
  • 0% withholding tax on dividend payments.

Foreign companies or investors who prefer to set up a company in Hong Kong, as an alternative to registering a liaison office, can reach out to us for complete assistance during the incorporation phase.

In addition to company creation our local accountants in Hong Kong also provide full bookkeeping and accounting services, aimed at helping companies meet all the annual filing and reporting requirements according to business form.

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.