Have a Business Plan
A good business plan is essential to the success of a business, it feasibly captures your innovative idea. A good business plan captures your business goals, marketing goals, and budget plans.
Reasons to start a Business in Hong Kong
Geographical location Hong Kong’s geographical location opens it to the surrounding markets of which China and Singapore are part.
The infrastructures of Hong Kong such as the airports, railways, and telecommunication are of a world-class standard.
Because of Hong Kong’s beautiful sceneries, many people are traveling to this region as tourists. Hence, businesses related to this area or serving these groups’ needs, are very lucrative.
Diverse business sectors
There are diverse business sectors in Hong Kong from which one can choose to engage in such healthcare, information technology, information, data analysis, financial institution, financial technology, education, and hardware.
The banking facilities in Hong Kong are of world-class standards. They offer their clients the ability to transact in different currencies.
The dynamic Hong Kong economic growth
There is economic freedom in Hong Kong mainly because of its strong legal system, efficient regulatory system; friendly economic policies, and strong laws against property rights infringement.
Friendly tax rates
Hong Kong is considered a tax haven because of its friendly tax rates. It is one of the lowest tax regimes in the region in terms of property tax, corporate tax, and profit tax rates.
Government policies and initiatives
The Hong Kong government understands the important contribution that businesses at the local or international level provide to its economy. It, therefore, has friendly policies and initiatives aimed at promoting the flourishing of the Gross Domestic Product (GDP). The government of Hong Kong allows foreign investors to own 100% of their company. It also offers business support to both local and foreign investors.
The Hong Kong government also has special initiatives aimed at attracting many foreigners to the region’s business sector such as incubator programs and funding schemes.
Starting a Business in Hong Kong
Starting a Hong Kong-based business is very simple if you know the process. These simple steps will help you to kick start.
- Research and settle for a business structure of your choice.
- Select an appropriate business name.
- Duly fill and submit your business registration forms together with the supporting documents to the Inland Revenue Department of Hong Kong. You will need to do this at least one month before commencing your business undertakings. For successful business registration, you will be given a business registration certificate plus a certificate of incorporation if you are a local company or a certificate of registration if you are a foreign investor.
- Open a bank account at the local bank according to your business needs. You will need an application form, a copy of your Hong Kong Identity card or copy of your passport, copies of your business registration, and bank statements among other documents as requested by the bank.
- Secure a Registered Address at which you will receive your business mails and from which you can mail your business correspondence. A business Registered Address cannot be your Hong Kong residential address .
- Begin your human resource related services such as hiring staff, insuring them, and filling their appropriate compensations. The good advantage of doing business in Hong Kong is that there is a pool of talented workforce into which you can tap into. Ensure your staff has the right paperwork in terms of working visas, residential visas, and permits that qualifies them to work in your organization. You are to anyone between 18 and 65 years for the Mandatory Provident Fund.
- Apply for the appropriate permits, licenses, or certificates of operation. Examples of businesses that need licenses/permits are travel agencies, restaurants, education sectors, employment agencies, investment services, financial institutions, entertainment industries, and health-related employment among other sectors.
- You will be required to file your taxes with the tax authorities on an annual basis. Therefore, for a start, ensure your records are properly captured by the taxing authorities of Hong Kong. Tax errors and noncompliance is a criminal offense in Hong Kong and is punishable by a fine, imprisonment, or both. You don’t want your business to be on the wrong side.
If you think the incorporation process is tedious, you might get in touch with one of the Paul Hype Page incorporation specialists. Paul Hype Page has been the industry for more than a decade, it will be our pleasure to serve you.
Common Hong Kong Business Structures
This sole proprietorship business type is one which is owned by one person who enjoys all the profits and is responsible for all debts.
A partnership business type is one in which two or more people come together to undertake a business dealing. A partnership can be in two categories, limited partnership, and the general partnership. Limited liability whereby you are responsible only in proportion to your contribution. A general partnership is whereby one investor is responsible for the debts of the company and even that of his/her partners.
Limited liability Company
This LLC business type requires you to enlist the services of a shareholder and a director. It is very suitable for SMEs owners because there is no stipulated initial capital requirement. A limited company is an entity of its own that is separate from its owners. A Hong Kong limited liability company is in three forms:
- Limited by guarantee
- Private company limited by shares
- Public company limited by shares
A representative office
This business type is established by the foreign parent company. It, however, does not involve itself with any profit-generating activity but enables the parent company to gather important information in form of market research. A representative office can also be used for company trial purposes. Meaning, you can engage in business activities akin to what you intend to undertake and see how it goes.
This business type is also set up by the foreign parent company which is liable for all its debts. This type however can do profit-generating business activities as is acceptable in Hong Kong.
This business structure is similar to a Branch Office in terms of the extent of business undertakings and set up. However, unlike the Branch office, it takes care of its debts and liabilities.
Start a business in Hong Kong as a foreigner
- Ensure you do prior market research.
- Learn the basics of the Chinese language even though the English language is widely spoken in Hong Kong.
- Learn the culture of the Hong Kong people to familiarize yourself with what is acceptable and what is not acceptable both in business dealings and day-to-day life.
- Learn about the climatic conditions and make appropriate preparations like medication and wardrobe.
- Get the appropriate paperwork. To work in Hong Kong, you will need a Work Visa and Employment Visa. The visa application forms are available online. You will need supporting documents like a business plan, business background information, proof of good citizenship, passport photo, passport copy, and copies of your academic qualifications
Starting a successful business in Hong Kong requires a good understanding of the region. You need to know the kind of business that will work in Hong Kong, the requirement of business registration, business registration process, the taxation system, annual compliance, and penalty of non-compliance.
As Hong Kong offers a business-friendly environment in terms of taxation and policies, it is an ideal place to invest your business resources in.
Starting a Business in Hong Kong FAQs
The Hong Kong government supports businesses in Hong Kong by offering tax friendly policies and initiatives. It also has funding schemes and grants to ensure your business thrives.
Anyone can start a business in Hong Kong, no matter you are a resident or a foreign investor. As long as you have all the basic requirements as stipulated by the Hong Kong government, you can start a business in Hong Kong.
- A copy of the Hong Kong identification card or a copy of the passport
- Certified true copies of your company documents if there are corporate shareholders
- A copy of your business plan
- A copy of the company’s articles of association
To operate in Hong Kong, you will need licenses/permits or certificates for various business dealings. However, there will be exceptional undertakings that will not require a certificate or license. You will also need to prepare your premise for inspection before being issued with certain licenses/permits. If you need to know the progress of your license/permit application, you will do through the online tracking facility from the Hong Kong Companies Registry website.