Starting a business in Hong Kong

Starting a business in Hong Kong is the best decision you can take for your business

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Hong Kong Company Formation Services Hong Kong

Starting a business in Hong Kong

Hong Kong has been a record holder for the past two decades of being the world's freest economy, and thus starting a business in Hong Kong is one of the best choices you can make for your business, as it is a global leader in the banking and business and it also ranks above the UK, USA and Japan as the lead corrupt country in the world.

Starting a business in Hong Kong is cost-efficient and has an easier process than other countries. Being a foreigner in Hong Kong, you can own 100% of the company, where you can be both- a shareholder and a director. In addition to establishing a business in Hong Kong, a person can easily pave a path for establishing a business with countries in the Asian continent like China, etc.

There are other things related to starting a business in Hong Kong and even opening an Hongkong bank account.

The most famous kind of business which is started in Hong Kong is a “Limited Company” but we also have different options available. There are different options available only if you already have another business. Below listed are the different types of companies which can be opened in Hong Kong:

Limited Company

It is the easiest and most common business type opened in Hong Kong. After the incorporation of such type of business, the entrepreneur will be able to enjoy the same tax benefits as the resident entrepreneurs do which also includes the free trade agreement form China.

Branch Office

In case you already have a company which is registered outside Hong Kong, you can open its branch office in Hong Kong. the office will have its own set of limitations and is not an independent form of its parent company.

Representative Office

This kind of business is the most restricted way to build a presence in Hong Kong as these offices are not permitted to engage themselves in any profit-making activity in the country. This implies that you won’t be able to sell or even make goods/services in Hong Kong.

If you wish to open an office that is a non-sales branch of your company, that is the right option for you, like the marketing department or support file.

The main focus is on the limited companies, as it is the easiest to incorporate and the most common type in Hong Kong. before you begin the process, you need to ensure that you have a name for your business.

The most famous kind of business which is started in Hong Kong is a “Limited Company” but we also have different options available. There are different options available only if you already have another business. Below listed are the different types of companies which can be opened in Hong Kong:

Limited Company

It is the easiest and most common business type opened in Hong Kong. After the incorporation of such type of business, the entrepreneur will be able to enjoy the same tax benefits as the resident entrepreneurs do which also includes the free trade agreement form China.

Branch Office

In case you already have a company which is registered outside Hong Kong, you can open its branch office in Hong Kong. the office will have its own set of limitations and is not an independent form of its parent company.

Representative Office

This kind of business is the most restricted way to build a presence in Hong Kong as these offices are not permitted to engage themselves in any profit-making activity in the country. This implies that you won’t be able to sell or even make goods/services in Hong Kong.

If you wish to open an office that is a non-sales branch of your company, that is the right option for you, like the marketing department or support file.

The main focus is on the limited companies, as it is the easiest to incorporate and the most common type in Hong Kong. before you begin the process, you need to ensure that you have a name for your business.

Once you incorporate the company, you need a bank account for the business transaction that takes place for the services provided. The process is a tough one, but with the help of our company, you can get guidance for opening a bank account in Hong Kong.

The process of opening a bank account involves the following steps:

  • Once you incorporate, research about the banks and choose the one which meets your needs.
  • Gather the necessary documents to be submitted in the bank. We can assist you in this process if hired.
  • Ensure that you have fulfilled all the bank’s requirements so that it is easy to arrange an appointment with the bank.
  • Visit the bank in person and submit the documents and application to the bank.
  • Once you get the approval from the bank, you can use your online banking freely and easily.

Any new business incorporated registered with the one-stop company and business registration services need to notify the commissioner about the business particulars. The notification is to be sent in a month from the date of commencement of the business. The details like the date of commencement of business, business address, nature, type of company, business description, and the name of the business.

Various notification of the charge
The notification can be made by filing the necessary form. Along with it, every company has to file a notification for any change in the above business particulars within a month of such change. The relevant forms can be downloaded from IDR’s website or obtained from our company.

The business registration office has to be notified of any admission or retirement of partners within a month of such change. The form IRBR 64 is to be signed along with the signatures of the other leaving or incoming partners. It is also necessary to send the business documents and a person’s ID for such change, along with the form.

If in case the change in the number of partners will make the company a sole proprietorship to a partnership or vice versa, revised business registration will be issued as an when the changes have been recorded. For the change in the nature of the business, the form IRBR 193 has to be filed and submitted with all the business credentials required.

In a case where you fail to submit the amount, a fine of $5,000 or imprisonment as it, might be considered as a serious offense in Hong Kong.

There are different obligations that are to be followed once you have completed the process of starting a business and opening a bank account in Hong Kong.

Keeping payrolls
  • 1. The tax obligations start as and when you hire the first employee.
  • 2. The moment you hire the employee, you have to make all the records of a person, including:
    • personal details like name, passport number, identity card, address, marital status, etc.
    • nature of employment (part/full time)
    • designation
    • amount of cash compensation received, regardless of domestic or foreign currency classification.
    • period of employment
    • employment contract and improvement in the terms of the contract
    • contribution to mandatory provident fund
    • non-cash allowances and fringe benefits
  • 3. The employer has to inform IRD about the following after starting a business in Hong Kong:<
    • change in employee’s details like residential or postal address, change in marital status, etc.
    • any alteration in the employment terms
    • employees ID card number
  • 4. All the documents have to be maintained up to 7 years from the date of their arrival in records.

 

Employers returns
  • 1. When you receive an employer’s return, it must be completed and lodged with the IRD within one month even if:
    • you have hired no employees and no return is required to be made.
    • the business ceased to exist
    • the business has not yet initiated
  • 2. If an employee meets the conditions declared in item 1(a) of Notes and Instructions for Forms IR56B and BIR56A and doesn’t get the return of the year, the return has to be issued.
  • 3. For the employee to facilitate the completion of their return, the IR56B/56E/56F/56G copy has to be given to them.
Employee’s Hong Kong Identity card

If the employee’s return has been completed and he does not have an identity card (if employed from overseas or an overseas corporation), fill the passport number and place of issue. Then follow up with the employee and at the soonest let the IRD know about the employee’s Hong Kong Identity Card No. when it comes.

Continuous employment

The employee has to report on the BIR56A and IR56B forms which is the employer’s return forms, if the employee is:

  • a director
  • a part-time staff
  • married
  • single and has an annual income of $ 132,000 or more
New employment

You need to file a copy of IR56E or electronic filing of Employer”s return, within 3 months of employing a person if the employer feels that he will be charged for salary tax.

Termination or death

File a copy of the necessary form or get the Electronic Filing of Employer’s Return done one month prior to their date of termination of the employment.

If the employee leaves Hong Kong for a substantial reason
  • find the employee’s date of departure
  • File two copies of the necessary form or get the Electronic Filing of Employer’s Return done one month prior to the scheduled date of departure.
  • From the date of filing the form, until the time where the employee has cleared all the taxes and has given you the “letter of release” issued by the IRD, all the due payments have to be held.

With the assistance of our company, you can complete the whole process on time and receives the certificates on time due to the direct portal with the company registry.