set up a company in Hong Kong
business registration

A Guide to Set Up a Company in Hong Kong

Hong Kong is one of the places known as business-friendly cities in the world, because it attracts many global entrepreneurs and companies. Apart from having a favorable business environment, Hong Kong also has low taxation, making it a top choice for many people who want to apply for company registration. Learn about how to set up a company in Hong Kong with us, because you will think it might be hard when you don't understand how to start. This article will explain several important steps, requirements and tips for those of you who want to know local laws and regulations for company registration in Hong Kong. What are the benefits when set up a company in Hong Kong? Hong Kong is a city with a high standard of living, with superb infrastructure and has a vibrant culture. For these reasons alone, Hong Kong can become the right place for international trade and investment. Some of the things below are reasons why you should learn to set up a company in Hong Kong. Cheap to set up and straightforward Company registration in Hong Kong is cost-efficient and relatively fast. All you need to have is a business registration certificate from the Companies Registry which you can get within a few days. Don't worry about future costs, because government fees for incorporation are transparent and reasonable. Hong Kong does not require minimum registered capital or a local director, there are no restrictions on foreign investment, and has a business-friendly environment. Business-friendly taxes Hong Kong has one of the lowest tax systems in the world with a two-tiered profit tax rate for corporations with 8.25% tax on earnings up to 2 million Hong Kong Dollars, and 16.5% on earnings over 2 million Hong Kong Dollars, and with an exemption for the first 6,000 Hong Kong Dollar profit. The country has a territorial tax regime, which means there is no additional corporate tax for companies conducting business outside Hong Kong. Vibrant business environment Hong Kong has become a dynamic hub for SMEs because it offers adaptability and an innovative environment. There are already more than 360,000 SMEs in Hong Kong, and Hong Kong has become the world's top ten countries with a competitive economy. Many entrepreneurs want to expand their business in Hong Kong, because the Hong Kong Government supports innovation and technology development, by allocating 500 million Hong Kong Dollars to launch a Digital Transformation Support Pilot Program as digital solutions for SMEs. Things to know before registering a company in Hong Kong Before setting up a company in Hong Kong, you must know several things first. Because many people want to open a company in Hong Kong, you have to understand how institutions and local organizations work in Hong Kong. When you want to set up a company in Hong Kong, you have to deal with three main interlocutors, such as The Companies Registry, The Inland Revenue Department, and the company secretary. Limited Company and Unlimited Company in Hong Kong The company secretary must be the primary contact person during company establishment and maintenance. On the other hand, the IRD and Hong Kong Companies Registry will collaborate to ensure that your business complies with the laws of Hong Kong, upholds accurate statutory records, and is monitored for timely filing of the annual return. How to set up a company in Hong Kong? There are nine steps to setting up a company in Hong Kong, once you are familiar with local organizations and institutions. Choose a company name Choose the legal entity for your company Select a company secretary Appoint legal representatives Set the amount of the share capital Prepare the incorporation documents Obtain a business registration and incorporation certificate Set up a company bank account Keep up the taxies and financial reporting We will explain several important steps to make it easier for you when setting up a company. Choose the right legal entity This is crucial, because it can affect factors such as filing your taxes and how your business is done in general. The list of main possible legal entities for your business are: Private limited company, company limited by guarantee, sole proprietorship, partnerships, and branch office. Familiarize yourself with what features each legal structure has, and adapt it to the nature of your business. Select a company secretary Having a local company secretary will make it easier for you to establish your company. This is your main contact person when Hong Kong authorities want important information about your business. This role is crucial for your company, because they must be able to comply with the authorities without fail. Don't forget to include the company address, so that it is easy for government departments to reach you and send you correspondence. Prepare the incorporation documents The documents are subject to approval before you can start your business. You need to prepare the NNC1 Incorporation Form provided by the Companies Registry of Hong Kong, A copy of HK ID card or passport of a director and shareholder, and Article of Association of the Company. Submit all of them to the Companies Registry, by using e-Registry's online portal platform, mailing your documents, or going to the Company Registry and submitting the documents in person. After submitting these documents, you need to pay the applicable government fee, which can be paid on a yearly basis.   If you feel overwhelmed with establishing a company in Hong Kong, and need an agency to take care of everything, SMEBrother is your solution. SMEBrother has been providing business services for SME companies since 2012, and will help with all your business needs like a brother. We know that SME business is difficult, but with our knowledge, years of network, and reasonable pricing, we can support our clients and become your business brothers. All business services starting from auditing services, opening a Hong Kong company, accounting, auditing, opening a Hong Kong bank account, tax issues, and anything you need to run your business smoothly from the start until your business grows.
doing business in Hong Kong
business registration

Benefits and Challenges Doing Business in Hong Kong

Before you start a business in a country, especially if you are a foreigner who wants to try to take advantage of opportunities in another country, you need to learn about the challenges and benefits in that country. Especially for those of you who are doing business in Hong Kong, we have prepared several things you need to know. Business owners must understand why Hong Kong is considered as one of the best places to run a business. Apart from friendly policies, Hong Kong also offers free trade, easy market access, and increased access to labor. Let's learn about all this. Benefits of doing business in Hong Kong Why do we discuss the benefits of doing business in Hong Kong rather than the challenges? Because the benefits outweigh the challenges, and is ideal for small and medium-sized businesses. Let's see what are the benefits of opening a business in Hong Kong. Low operational cost Companies in Hong Kong are proven to spend significantly less than other countries. There are many favorable laws for new businesses so that Hong Kong is a flexible place to start a business. Limited Company and Unlimited Company in Hong Kong For example, the company income tax rate is 8.25% for profits up to HK$2 million, and 16.5% for profits more than HK$2 million. The taxation will not erode much income because the country offers significantly lesser tax rates. Large and growing economy Hong Kong is one of the largest economies in the People's Republic of China. This will outweigh the challenges of doing business in Hong Kong, because this region is energetic, and with economic development at a steady rate of 2-6% per year. The Hong Kong economy opens up freedom for different types of business with free markets and trade policies to facilitate your new business. Suitable business location Hong Kong has a strategic location for other Asian markets because it is located on the Southern Coast of China. That location makes it easy for business owners to easily travel to any other major Chinese city, for example going to Beijing by high-speed train, or reach nearby countries like Japan, Thailand, Singapore, and India. The suitable location can be used as land to gain profits in terms of trade agreements with other countries. The more connections your business has, the greater the revenue you can get. Challenges of doing business in Hong Kong Even though Hong Kong has proven to be a suitable place for small or medium-sized businesses, you must still pay attention to what challenges you might face when having a business in Hong Kong. Laws and regulations Long before you decide to open a business in Hong Kong, you should dedicate your time to learning about the laws relating to company incorporation, especially regarding hiring, paying staff, and the firm's daily operations. If you cannot follow these laws, your business could be subject to penalties and sanctions. Due to the many differences from one jurisdiction to another, you need a legal advisor to provide advice and guide you to stay on the good side of the law and whatever information you need. Opening a bank account Maybe you will be confused, why opening a bank account is more complicated than opening a business in Hong Kong. This is because Hong Kong is a country that is strict with new and existing customers regarding financial matters, to avoid money laundering and terrorism financing. Some of these documents will be needed when you want to open a bank account for your new business: Proof of registration, identity cards, travel documents, certificate of incorporation, details of the company's control structure and ownership, partnership agreement of deed, exchange of financial account information, details of business nature and method of operation. In fact, many Hong Kong banks charge high fees when you want to open an international bank account. Some small businesses can find it difficult to deal with these kinds of fees. There is also a lot of paperwork required for a single bank account. New tax laws Tax is something that every business owner needs to continue to study because there will always be changes over time. Each company needs to pay corporate and payroll taxes, and file audited financial statements to the Inland Revenue Department. If a business fails to comply with the tax regulations, it will get penalties and have difficulty opening a new business. There are many things you need to do for taxes, or what can be called tax treatment. You need to make tax planning, tax declaration, tax review and dispute resolution, and many others. Not many businesses can survive dealing with so many paperwork requirements for taxes and also the time to take care of it all. If you are overwhelmed by all this, you can hire a professional tax treatment to make it simpler. Who can help us when we want to open a business in Hong Kong? You already know the benefits and challenges when you open a business in Hong Kong. Now what you need to prepare is what the process is for starting a business, and which agency can help you so you can stay on the right side of the law. After you choose a company name and incorporate your firm, register the company, open a bank account, and register a business address, you can contact SMEBrother for all your legalization needs, processing documents, or if you want help with getting permission to open a business from scratch. SME Bro has been providing business services for small and medium-sized businesses for more than a decade, starting from auditing services, accounting, opening a Hong Kong bank account, tax issues handling, to opening a Hong Kong company from scratch. Whatever your needs are for successfully opening a business, up to any permits to thrive your business, you can do it with SMEBrother as your truly SME brother. You just focus on expanding your business and let us take care of the rest.