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Business License Requirements in Hong Kong

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Business License Requirements in Hong Kong

2020-10-14T01:25:47+00:00October 12, 2020|0 Comments

A business license is a document that permits one to conduct a specific type of business activity, and it is usually issued by a department or agency of the Hong Kong government.

For a business to apply for a license in Hong Kong, the company must first be registered with the Companies Registry.

Importing and exporting rules and regulations

If one needs to export goods or services, then a onetime registration procedure must be completed in the countries of origin by their concerned government departments as required in Hong Kong.

There are no customs tariff on goods imported into the country. An excise duty is imposed by the government on only four types of goods: tobacco, hydrocarbon oil, alcoholic beverages, and methyl alcohol. This is irrespective of whether imported or locally made. Customs control is usually carried out through inspection of documentation.

An importer must complete customs clearance and declaration formalities with the Hong Kong Customs and Excise Department for any goods entering Hong Kong. Charges are based on the value and nature of goods imported, except for articles exempted from declaration charges.

The government operates a certification system on the origin of the goods to be sent abroad to meet the requirements of overseas importing authorities.

The department of Commerce’s Bureau of Industry and Security (BIS) published compliance requirements for persons intending to export or re-export from Hong Kong any items controlled under the Export Administration Regulations (EAR), especially, items controlled for national security, missile technology, nuclear nonproliferation or chemical and biological weapons. Exporters and re-exporters of these items to Hong Kong must obtain one of the following, before shipment either:

  • A copy of a valid import license from the Hong Kong import issued by the Hong Kong government, or;
  • A copy of a written statement issued by the Hong Kong government stating that no import license is required.

Persons intending to re-export these items from Hong Kong must obtain before shipment either:

  • A Hong Kong export license; or
  • A statement from the Hong Kong government that such a license is not required.

Exporters should be aware that their foreign customers may be required to obtain, import, and re-export licenses from their government. For example, as best practice, before shipment, BIS recommends U.S. exporters provide foreign customers (Hong Kong, Singapore/United Arab Emirates) with Export Control Classification Number(ECCN) of items to be exported, and requests a copy of any required licenses.

A U.S. exporter is not required to obtain a copy of a Hong Kong export license even if the exporter knows the item will be subsequently re-exported from Hong Kong. However, the Hong Kong re-exporter itself is required to obtain a Hong Kong export license or other documentation before re-exporting. The exporter and re-exporter will need to maintain copies of these documents for record-keeping for at least five years from the date of export or re-export.

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Import and Export Business Licenses:

Whether you are dealing with controlled goods or non-controlled goods, you will require a relevant license relating to the goods you are importing/exporting, issued by the specific governing agency.

Controlled goods include;

  • drugs,
  • Petrochemicals,
  • Animals
  • Food products.
  • Cigarettes, and
  • Tobacco products.

The following are the different licenses and permits under the import or export trading company:

  • Import /Export license for dutiable goods such as alcoholic drinks, tobacco. Hydrocarbon oils, methyl alcohol issued by the Custom and Excise Department
  • Import /Export license for controlled chemicals also issued by the Custom and Excise Department
  • Import /Export license for animals or birds issued by the Import and Export Division, Agriculture Fisheries and Conservation Department
  • Import /Export license for foodstuffs issued by The Center of Food Safety, Food and Environmental Hygiene Department
  • Import /Export license for textiles issued by The Trade and Industry Department
  • Import /Export license for pharmaceutical products, medicines, and dangerous drugs issued by the Pharmaceuticals Import/Esporta Control Unit, Pharmaceutical Service and the Department of Health.
  • Import /Export license for pesticides issued by the Plant and Pesticides Regulatory Division, Agriculture, fisheries and Conservation Department.

License requirement for finance business

Hong Kong is known as a financial hub globally; because of this, the government requires all financial sectors to be licensed for it to run a financial service business. A financial business will have to obtain the following licenses:

  • Money Lenders License to operate a money lending business
  • Registration of Deposit-taking Company (DTC) issued by the Hong Kong’ Monetary Authority to carry on the business of taking deposits from customers.
  • Registration of Insurance Agents issued by the Office of the Commissioner of Insurance in order to act as an insurance agent.
  • Registration of Remittance Agent and Money Changers issued by the Police Force of Hong Kong to operate a Money Changer & Foreign Currencies/Exchange Broker or Dealer.
  • Representative License Authorized Institution Registration or a Corporate License issued by the Securities and Futures Commission to conduct investment advisory services relating to foreign currencies, commodity futures, precious metals, security, overseas stock, gold bullion and fund investment.
  • Authorization to carry on and Insurance Business issued by the Office of Commissioner of Insurance in order to act as an insurer.
  • Pawnbrokers License issued by the Hong Kong Police Force to operate a pawnshop.

Who Should Obtain A License?

Any corporation that intends to carry out any regulated activity must apply for a license. The following are considered regulated under the Securities and Futures Ordinance (SFO):

  • Dealing in securities
  • Dealing in futures contrast
  • Leveraged foreign exchange trading
  • Advising on futures contracts
  • Advising on corporate finance
  • Providing automated trading services
  • Securities margin financing
  • Asset management services.

Exceptions from Holding a License

  • Incidental Exemptions. You are exempted from licensing requirements for certain regulated activates if they are incidental to another regulated activity for which you are already licensed—for example, assisting on securities when you are a licensed stockbroker dealing in securities.
  • Securities dealer – margin financier exemption
  • Dealing with professional investor exemption
  • Advising group company exemption
  • Professional exemption
  • Leveraged foreign exchange trading exemption

Pre-requisites for financial licensing

The applicant must satisfy the Fit, and Proper Criteria set out by the SFC. The SFC will consider the applicants’ financial status, or solvency, education, or other qualifications or experience concerning nature and duties to be performed. The ability to carry on the regulated activity competently, honestly and fairly, and reputation, character, reliability, and financial integrity are some of the concerns.

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How to Apply for Hong Kong Business Licenses and Permits

The business license application process is simple, fairly easy and straightforward. However, one is always advised to seek professional help in areas where they are not confident.

It takes 2-8 weeks to obtain a business license or permit.

  • A business must first be already registered with the Companies Registry of Hong Kong as a pre-requisite criteria before the license application.
  • A business owner should first find out from the Hong Kong government whether their business requires a license /permit or not.
  • Then the business owner should ensure that the business premises are following the specifications of the industry they are involved in so that they can easily pass the evaluation by the inspecting authorities.
  • Next is the preparation of sufficient documentation to complete the licensing procedure.

Conclusion

Free trade policy in Hong Kong is a pull factor for many people making investments in the country and outside the country.

Hong Kong is a free port without any confinements on working as an importer, or as oversea merchandise.

Hong Kong has placed its information about import and export requirements on its Trade & Industry Department website, and the Customs & Excise Department website. If an item is not identified on the website, the exporter or re-exporter will need to verify the control status of the item with the Hong Kong government.

Business License Requirements in Hong Kong FAQs

Which body is responsible for the clearance of imports and exports in Hong Kong?2020-10-12T07:31:56+00:00

It is the Hong Kong Customs that is responsible for clearance of imports and exports at cargoes. 

Doe Hong Kong impose taxes on Imports?2020-10-12T07:31:39+00:00

Hong Kong is a duty free destination. That implies that there are not custom duties or taxes that are levied the goods being imported into the Country. 

What are the Hong Kong’s main Industry?2020-10-12T07:31:20+00:00

The main industries holding the economy of Hong Kong include financial services, tourism, trading and logistics. Lately, the professional and production industries have been some of the important driving force for the economy of Hong Kong. 

Which goods can’t I import to Hong Kong?2020-10-12T07:31:03+00:00

There are a number of commodities that are restricted from entering Hong Kong and they include;

  • Firearms, explosives, or ammunition weapons.
  • Pesticides
  • Diamonds, unworked
  • Dangerous chemicals, including radioactive substances
  • Sand unless coming from China.
  • Animals and products that are manufactured from the animals products.
  • Meat, poultry, eggs, dugs, and plants.
Which countries partner with Hong Kong for most exports?2020-10-12T07:30:43+00:00

Nearly 54% of the total Hong Kong exports are taken to China and the US comes second with a total of 8% of the total exports from China. 

Which products do Hong Kong Export?2020-10-12T07:26:26+00:00

The products include machineries, textiles, jewelries, watches, goldsmiths, and toys. 

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