April 29th, 2021 by Vivian Au
April 27th, 2021 by Vivian Au
Starting a business venture in Hong Kong is one of the most attractive options for investors worldwide due to its impressive corporate tax system.
The corporate tax regime only taxes such profits that arise from a trade, business, or profession carried out in Hong Kong.
The filing for such taxes is commonly known as Profit Tax Returns.
Given the various forms and filing processes that businesses in Hong Kong need to follow for filing the taxes, it can be incredibly confusing for business owners to figure it out independently.
This article will tell you everything you need to know about Profit Tax Returns, along with the forms and the filing processes.
Who should file Profit Tax Returns?
Every Hong Kong company, including small businesses, partnerships businesses, and self-employed individuals, is under the obligation to file the Profit Tax Returns.
The forms for filing the Profit Tax Returns are provided by the Inland Revenue Department in Hong Kong.
The Inland Revenue Department issues three series of forms for filing the Profit Tax Returns. These are:
- BIR-51 – Corporations
- BIR-52 – Persons other than corporations (such as partnerships)
- BIR-54 – In respect of Non-Resident Persons (non-resident persons who receive an income from practicing any trade, profession, or businesses in Hong Kong)
In case you are carrying out a business as a sole proprietor, you can file the Profit Tax Returns through Tax Return – Individuals (BIR60).
For filing these forms, one needs to log on to eTax, the gateway set up by the Inland Revenue Department.
When do you start filing Profit Tax Returns?
If you are a newly registered Hong Kong Company, you’ll need to file Profit Tax Returns 18 months from the date of incorporation.
For instance, if your company is incorporated on 1 January 2020, you will receive the request to file PTR around June 2021.
After that, each subsequent PTR needs to be filed annually.
In case your company has also commenced business, whether in Hong Kong or outside Hong Kong, you will also need to draw up the accounts and report them in your Profit Tax Returns filing.
Corporations need to file the Profit Tax Returns in Form BIR 51 along with the audited financial statements prepared by a certified public accountant.
Small corporations (where the total gross income does of the company is less than HKD 500,000 for the assessment year), only need to submit Form BIR51 along with the necessary supplementary forms.
They are exempted from submitting audited financial statements.
However, all the information provided in Form BIR51 should be based on the audited financial statements.
It is advisable to maintain copies of the same in case the authorities request you to present it.
Please note the Inland Revenue Department usually issues the request for Profit Tax Returns on the first working day of April every year, and companies need to file within one month of the issuance.
The fiscal year in Hong Kong is from April to March, but the accounting year for the company may vary.
What are supplementary forms for Profit Tax Returns?
If you are the beneficiary of any preferential tax treatment or want to claim tax incentives, you can fill up the supplementary forms.
This practice was introduced in April 2019. At present, there are ten such forms:
Can I claim exemption from Profit Tax Returns?
If your business activities occur outside Hong Kong, you are exempted from Profit Tax Return, even when you remit such profits to Hong Kong.
This allows you to enjoy a tax-free profit.
However, you need to file for Profit Tax Exemption to enjoy this status.
- Filing the Profit Tax Return along with audited financial statements.
- Filing for an offshore status. However, you can only file for this 18 months after filing your first Profit Tax Return.
After this, the Inland Revenue Department, based on the documentation provided and the corporate structure, issues an offshore claim inquiry letter for the firm as proof.
The key personnel of the company, including directors, may also need to provide relevant documents to the Department.
Finally, the offshore status is issued — however, you must disclose critical changes to the company structure or status every 12 months from the date on which offshore status was granted.
Can I get an extension for the submission of Profit Tax Returns?
Extensions are provided only if you can show sufficient reasons.
Typically, the Inland Revenue Department offers a Block Extension Scheme at the beginning of each year when companies can apply for extensions for filings.
Failure to comply with the deadlines can result in imprisonment of up to 3 years and a fine up to a maximum of HKD 50,000.
Can I declare the Profit Tax Return as NIL?
If you have not commenced any operations or carried out any business transactions during the assessment year, the Profit Tax Return can be filed as NIL.
This simply indicates that your company has not conducted any business outside or within Hong Kong.
Getting everything organized for filing the Profit Tax Return can be an overwhelming task.
It tends to eat up a lot of your time, thanks to the copious amount of paperwork involved.
That’s why it makes perfect sense to outsource such activities, so you can have more time to look after your business.
At Air Corporate, we can do just that! We take care of incorporation, secretarial, and accounting tasks and simplify your life.
Our team of experts can help you keep your business on track without you having to break a sweat.
Register your business in Hong Kong with Air Corporate today, or switch your company secretary to us, and we’ll handle all your profit tax needs!
Simply focus on your business and we will do the rest.
April 22nd, 2021 by Vivian Au
If you’re looking at opening an offshore business, choosing where to incorporate it is a huge and important decision.
The British Virgin Islands are one of the most popular places to create an IBC or international business company. This is because it’s well-known as being a tax haven.
There are no corporate taxes for offshore BVI company BVI.
There are, however, a few negatives that you need to look at before you commit to creating a business in the British Virgin Islands.
They could very well lead you to change your mind.
1. Economic Substance Regulations
Back in the day, the British Virgin Islands was the wild west of off-shore entities.
There were almost no rules and with no corporate taxes, it was the ultimate hot spot for new businesses.
Just recently, BVI was added to the Organisation for Economic Cooperation and Development, or OECD, white list.
This helps its reputation after past scandals.
You can no longer offer gambling, betting, or casino services and you also can’t offer third-party financial services like banking, investment, insurance, or trust services.
It can only be direct.
Even though this helps the reputation of BVI, it means that now BVI has to follow the same standards as the OECD.
There are certain requirements that each entity has to meet in order to comply with the new regulations.
They are that the entity needs to build local economic substance if it is commercial and feasible and that the entity needs to revise its operational and legal structure to align with the Act’s strict standards.
Every year the entity will have to be checked to see if it still meets the requirements and, if not, the entity will face fines, sanctions, and the possibility of liquidation.
2. Long Application and Approval Period
Another result of the economic substance laws under the Act is that all of the processes in BVI have been formalized, meaning that it’s no longer a simple process to create an IBC in BVI. Previously, there weren’t so many rules and regulations.
Now there’s a lot of red tape to go through.
If the business that’s being registered is in the category of trust management, insurance, investment advice, or banking, then the entity has to get a license from the Financial Services Commission.
Getting a license requires backup checks and business plans and can take about four to six weeks to get approval on.
Additionally, the business will need to open a bank account in the British Virgin Islands, which means all of the necessary documents will have to be organized and put together.
Opening a bank account in BVI typically takes three months.
A rather long time to simply open an account.
There is also the matter of work permits.
It takes seven to ten weeks to get a work permit from the Labour Department in BVI.
As you can see, getting fully set up and having staff in the British Virgin Islands, it’s going to take a significant amount of time.
Some might decide to look at other options that aren’t so arduous and complicated to make things easier.
3. Poor Reputation for Money Laundering
While the British Virgin Islands are known for being a tax haven with amazing weather and beaches, there have been some stains on their reputation over the years.
For example, the many Shell companies that are in BVI have been repeatedly a part of global crime and fraud schemes.
Unfortunately, these problems are ongoing.
The most recent case saw about $40 million in funds for COVID-19 relief siphoned off to political allies rather than going to the people and businesses that needed it.
In another case, $250 million worth of cocaine was found in a local policeman’s home.
This kind of corruption is hard to ignore when you’re looking at creating a reputable business.
It’s understandable to look at the cases and say that the entity you’re creating will not be a part of any schemes, so your business’s reputation will be fine.
However, when you’re bringing on new clients who are educated or simply have read recent international financial news, they will have seen all of the negative press regarding finance in the British Virgin Islands.
You could lose business deals for choosing to create your company in BVI.
4. Costs and Bank Accounts
The last, but certainly not least, on to setting up your IBC in the British Virgin Islands is that it’s costly.
Along with all the bureaucratic red tape comes fees associated with each license and permit.
For a high-quality and reputable service provider, you’re looking at paying between $1,500-$3,000 to get incorporated.
Then, on top of the fees associated with starting the entity, you’re going to pay between $800 and $1,500 in annual renewal fees.
If you set up an IBC in the British Virgin Islands, you might want to have an account elsewhere that’s associated with it rather than just the one in BVI.
That’s easier said than done.
Because of all of the issues with reputation, it’s hard to get a bank account for a company registered in BVI.
Many banks will reject your application outright saying they won’t do business with a company in BVI.
Opening a business in the British Virgin Islands is not the same as it once was, but navigating your business in certain ways can make it still a better choice than many continental registration alternatives.
Pairing your BVI business up with a global multicurrency business account could definitely soften the blow of the recent BVI policy changes if you’re already registered there as well.
Register with Air Corporate today and get access to a multi-currency business account located in Hong Kong, but for BVI registered companies
April 16th, 2021 by Vivian Au
When it comes to expanding your business into international markets, Hong Kong is a popular destination for growing businesses.
Here we’ll teach you how to register your US-based company in Hong Kong.
Why Hong Kong?
You’ve probably heard more and more over the years that Hong Kong is the next big thing in the world of international business.
Here are some of the reasons why Hong Kong should be your top destination for international expansion.
- Favorable Taxation: The first of many advantages of doing business in Hong Kong is the very business-friendly taxation policies in effect.
Compared to surrounding economic zones, Hong Kong’s taxation system is highly competitive.
Income made within the Hong Kong economic zone is taxed marginally from as little as 8.23% up to 16.5%.
On top of that, any profit earned outside of the borders of Hong Kong is tax exempt.
- Open Economy: The economy of Hong Kong is very free and open. Virtually every category of business is accepted in the city. Additionally, all currencies are accepted and companies operating in Hong Kong aren’t required to maintain a bank account in the city.
- Location: Hong Kong’s location offers many strategic advantages. The city is located right on the water with easy access to shipping ports. Additionally, the city offers instant access to mainland China and various other Asian countries by air.
- Simplicity of Doing Business: The best part of expanding your US-based company into Hong Kong is how easy the commercial authorities make it. You can establish your business in Hong Kong and maintain full ownership over the company.
Now that we’ve gone over the specifics of what makes Hong Kong an excellent destination for your business expansion, it’s time to discuss the steps involved in registering your company in Hong Kong.
How to Register Your Company in Hong Kong
Here’s a step-by-step guide to expanding your US-based business in Hong Kong.
1. Find Your Hong Kong Business Entity Type
Evaluate your business and see which business entity best describes the structure of your company.
Each business entity has its own advantages and disadvantages.
The most popular business entity for foreign businesses in Hong Kong is the Limited Liability Company, or LLC.
The structure of an LLC in Hong Kong allows as little as 1 shareholder and director and a maximum of 50 shareholders.
There is no minimum required share capital, and liability is limited to the unpaid amount of shares.
This model is preferred by smaller companies to conduct business in Hong Kong.
If this structure doesn’t suit your business, however, you can embark in a partnership with at least one Hong Kong-based partner, or alternatively move your sole proprietorship to the city.
2. Register Your Company
Next, you’ll need to register your business in Hong Kong to gain the right to operate there.
First, register your business with Hong Kong’s Companies Registry.
There is a collection of forms you must sign to apply for a registry, which can be found here.
These forms include:
- Incorporation Form
- Your Company’s Articles of Association
- and A Notice to the Business Registration Office of Hong Kong
3. Gain Certification
Once your applications are approved and your company is registered in Hong Kong, you will need to collect a series of certifications to start operating.
These certifications include the Certificate of Incorporation and the Business Registration Certificate.
These documents and certificates can be applied for and submitted both in-person via hardcopy and online via electronic form.
4. Additional Documentation
Lastly, after gaining registration and certification, you need to scan for any industry-specific documentation that you will need.
If you sell physical products, you will need to look into importation and exportation regulations.
Depending on the business you run, there could be very little or quite a lot of additional documentation required to get your business up and running in Hong Kong.
After you’re permitted to operate your business in Hong Kong, you’re also required to perform annual filings.
Like the United States, businesses operating in Hong Kong must file annual tax returns and meetings with the IRD.
Additionally, you must renew your business registration forms to maintain your status as a certified business.
Any business with additional certifications must keep up with them in order to operate legally, so be sure to check your status often.
Pay attention to the expiration dates of your certificates to stay in good standing with the IRD.
Opening a Business Bank Account in Hong Kong
It’s ideal to open a bank account in Hong Kong for your business. Like registering your business in Hong Kong, there is a process required for opening a company bank account with a local Hong Kong bank.
Guide: Open a business bank account in Hong Kong in 9 easy steps.
While the process is relatively involved, it’s worth it at the end of the day.
The burgeoning economic zone that is Hong Kong is a hotbed of economic opportunities.
When it comes to expanding your US-based business into international markets, Hong Kong is an excellent location for your business venture.
It’s important to evaluate your business structure, type, and goals when contemplating an expansion to Hong Kong With this guide, you can easily expand your business into the world-renowned economic powerhouse of a city.
Looking for help not only registering your company in Hong Kong, but also opening a bank account?
Register today with Air Corporate and you’ll get a company in Hong Kong in under 48 hours
April 13th, 2021 by Vivian Au
With the advent of COVID-19 vaccines and economies on the rebound now is an exciting time to consider opening a new business.
One place, in particular, to keep an eye on is Hong Kong.
According to focus-economics.com, Hong Kong’s economic growth rate is projected to be a whopping 4.6%.
Among the top four key industries in Hong Kong are financial services and tourism and with plane travel becoming a reality again this could be an ideal time to make a solid profit from people who are tired of sitting at home and who are ready to do things with their money.
As tourism explodes, so does retail!
Why Hong Kong?
There are thousands upon thousands of retail shops in Hong Kong that enjoy the spending habits not only of residents but of tourists as well.
Additionally, Hong Kong has a relatively simple tax system and is often described as being very “business-friendly.”
Hong Kong’s corporate tax rate is only 8.25% for the first $2 million Hong Kong Dollars and 16.5% for anything above $2 million Hong Kong Dollars.
Their individual tax rate is incredibly reasonable, maxing out at 17% for anything over $200,000 but with most income less than that being charged at 10% or less.
For more specific tax information go to https://guidemehongkong.com.
Between the simplicity of their corporate tax system and the affordability of the individual income tax, Hong Kong stands to be a place where anyone can turn a profit with a little know-how, hard work, and some smart investments.
Many of the resources and steps are specifically aimed at Hong Kong residents however the steps for opening a company that isn’t local aren’t significantly different and seem aimed at particularly accommodating companies based in the United States.
So, whether you are looking to start something new or to expand your business overseas, it is worth considering Hong Kong.
1. Register Your Company
When registering, first consider what type of company makes the most sense for what you are trying to accomplish.
The two options are “company limited by shares” and “company limited by guarantee.”
The simplest explanation of the difference is that a company limited by shares will have shareholders whereas a company limited by guarantee has “members” who control the company but are not shareholders.
Generally speaking, if you are trying to open a business you would want a company limited by shares.
Companies limited by guarantee tend to be things like non-profit organizations.
Both types, however, will require you to have “articles of association.”
These articles aren’t in a specific form but are instead drawn up by the company.
These include anything the business wants to put in as well as some mandatory articles that the company is required to have.
It’s a relatively short list of requirements (that can be found on the Companies Registry website for Hong Kong) and most of them are just associated with the kind of business you are forming (limited by shares vs limited by guarantee).
Once you have decided and crafted your articles, you’ll need to choose a name for your company.
There are essentially 3 requirements for naming the company that is as follows:
- You can register a company with an English name or a Chinese name but you can not register with a combination of English and Chinese.
- An English company name must have the word “Limited” at the end (for a company that sells blue hats they could be Blue Hats Limited) and a Chinese Company must end with “有限公司” (so “藍帽有限公司” for that same company name in Chinese).
- A Chinese company name has to be in Traditional Chinese characters rather than Simplified Chinese.
There are some things that could prevent a name from getting approval – for instance, starting a company with a name that some other company already has – but many of them are up to the Registrar’s discretion (though it shouldn’t be too hard to name the company something that will work).
Keep it simple and google the name before you do it to make sure no one else has it.
Your next step is to deliver three documents and the fees associated with them to the Shroff in the Queensway Government Offices.
These forms can be submitted in person or electronically.
The three documents you will need are:
- Incorporation Form – (if you are starting a business you’ll likely need the NNC1);
- Articles of Association;
- A Notice to Business Registration Office.
Again, all of these forms and more detailed information can be found on the Companies Registry website at https://www.cr.gov.hk/en/home/index.htm.
3. Get Certified
Once those forms have been submitted and your business application has been approved you fill out another couple of forms called the “Certificate of Incorporation” and “Business Registration Certificate.”
These two together are often just referred to as “the Certificates.”
Read these FAQs on the Hong Kong Certificates of Incorporation and Business Registration Certificates.
After that, it is just a matter of securing any relevant permits or licenses needed to run your specific business.
By visiting the Trade and Industry Department website (found here: https://www.tid.gov.hk/eindex.html) you can find information on the various licenses, permits, certificates, and approvals necessary for any business to operate in Hong Kong.
All in all, it is a relatively straightforward process and if you follow these steps you could be reaping the benefits of the projected economic growth.
The sooner you start filling out those forms the sooner you could be operating a successful business in an amazing and dynamic city.
Does all this registration, certificate approvals, and licensing sound like way too much paperwork for you?
Well in Hong Kong, all companies need a Company Secretary. They help you do literally everything necessary to open your business in Hong Kong with all the required documents you need.
Register your retail business in Hong Kong with Air Corporate today, and in 48 hours you’ll have a new business ready for customers.
April 7th, 2021 by Vivian Au
Setting up your company in a new location could be a great growth strategy.
Your business can penetrate a foreign market, establish a global presence and benefit from decreased operational cost when you register your company in a new location.
It is also a strategic business decision as a new location could be a great contingency plan for your business.
If you have a UK Company, you may be considering setting up your company overseas to tap into the opportunities in other countries.
Hong Kong is a great place to register your company overseas.
Hong Kong offers foreign companies easy access to the Asian market and it’s relatively easy to register a foreign company in Hong Kong.
Here are other great reasons why you should set up your UK company in Hong Kong.
Less capital intensive
The UK boasts of one of the strongest currencies in the world.
Thus, businesses operate at a premium in the UK compared to Hong Kong. Setting up a company in Hong Kong is affordable.
The minimum share capital for companies in Hong Kong is as low as 1 HKD and the cost of registering a company in Hong Kong is equally affordable.
Thus, if you’re considering expanding your company on a budget, you should consider Hong Kong.
Hong Kong promotes flexible business operations.
You can run your company remotely from anywhere in the world.
You only need to engage a Hong Kong Company secretary to keep up with regulatory requirements and get a registered office address in Hong Kong.
If you’re considering relocating your UK company to another country without moving any assets, or if you don’t intend to conduct any business in Hong Kong, you can register the company as an offshore company.
Simple tax system
When compared with the UK, Hong Kong’s corporate tax system is simple and investment-friendly.
The tax rate is lower than most corporate tax rates in other jurisdictions and there are fewer applicable taxes for companies.
Also, Hong Kong’s income tax system is territorial.
This makes it easy for multinational companies with subsidiaries in Hong Kong to repatriate much profit as only profits derived from Hong Kong are taxed in Hong Kong.
Thus, registering your UK company in Hong Kong might help your company maximize profit by minimizing its tax liability.
Do you need to reside in Hong Kong to register a UK company in Hong Kong?
Hong Kong is considered a business-friendly location for foreigners.
The Hong Kong government has set down policies that encourage foreign investment and eliminate restrictions on foreigners’ right to invest in the country.
Thus, all the directors and shareholders of the company can be foreigners and do not have to reside in Hong Kong.
However, some regulatory requirements make it desirable to have some sort of physical presence in Hong Kong when setting up a company in Hong Kong.
This can easily be resolved if you hire a Hong Kong company Secretary.
This could be an individual resident in Hong Kong or a Hong Kong firm established to render company secretarial services.
Luckily, we offer these services and more at Air Corporate.
What are the requirements for registering a UK company as a Hong Kong company?
As is the case in most jurisdictions, foreign investment by a UK company needs to be approved by the key decision-makers of the company.
Thus, if you’re planning on registering a UK company as a Hong Kong company, you’ll need to obtain the shareholder’s approval to do so.
Once you have gotten the approval, you’ll need to meet up with the following requirements.
You can retain your UK company’s name or you can adopt a new name for the Hong Kong company registration.
Coming up with a company’s name is a simple yet important task.
You need to pick a unique name to avoid trademark infringements or liabilities for passing off.
Directors are the key officers of a company.
The minimum number of directors required to set up a company in Hong Kong is one.
There’s no maximum number of directors.
Hong Kong promotes a liberal economy that encourages foreign investment.
There are no restrictions based on the nationality of persons who can be the directors and shareholders of a company.
Thus, a person who is not a Hong Kong citizen or resident of Hong Kong can be a director in a Hong Kong company.
Shareholders are the owners of the company and could be individuals of any nationality or a corporate body registered in any part of the world.
Your UK company should be named as a shareholder in the Hong Kong companies’ registration documents to establish a relationship.
The minimum number of shareholders required for a Hong Kong company registration is one.
The maximum number depends on the type of company you want to register with.
Private companies cannot have more than fifty shareholders.
When registering your UK company in Hong Kong, you will be required to appoint a company secretary.
The Hong Kong company secretary is a regulatory requirement for operating a limited liability company in Hong Kong.
The company secretary plays a pivotal role during the incorporation and post-incorporation phases of your company.
They handle managerial and administrative duties for the company.
Any individual that is resident in Hong Kong can be a Company Secretary.
However, it is important that you engage a firm or corporation with a TCSP license to act as your company secretary.
Registered office address
Another regulatory requirement for Hong Kong companies is a registered office address.
Your registered office address must be an address in Hong Kong.
If your company needs to carry out physical operations in Hong Kong, it is desirable to lease or buy a property in Hong Kong for your registered office address.
If your company’s operations do not require a physical presence in Hong Kong, you can use your company secretary’s address.
Companies raise funds through equity or loans.
When companies raise funds through equity, they issue shares to persons who become shareholders.
A company’s share capital is the number of shares and the value of the shares allotted to the members or shareholders of the company.
When registering a company in certain jurisdictions, you will be required to meet up with a minimum share capital.
There’s no minimum share capital requirement in Hong Kong.
However, if your company is operating in some sectors like the banking and insurance sector, you may need to meet up with specific share capital as required by the relevant regulators.
You’ll need to file certain documents during the incorporation process. These documents include:
- Duly completed application forms
- A copy of the Articles of Association for the Hong Kong company
- A copy of the international passport for foreign directors and shareholder;
- A copy of each Hong Kong ID card for directors and shareholders who are Hong Kong residents(if applicable)
- Copies of your UK company’s corporate documents
Steps for registering your UK company in Hong Kong
Once you’ve gathered all the documents and information required to register your company in Hong Kong, you can proceed to register your UK company in Hong Kong with the following steps.
Pick your preferred company type
There are different types of companies in Hong Kong.
You can register a Limited Liability Company (LLC) which could either be a Private Company Limited by Shares or a Public Company Limited by Shares.
You could also register your UK company as a Company Limited by Guarantee.
These are the options available in Hong Kong and your choice will depend on your company’s objectives, company size and the nature of its shareholders, and your company’s financial capacity.
Check for name availability
You need to check if your preferred company’s name is available.
You can do this via the public Hong Kong records for all registered companies – the Cyber Search Centre.
You can search for as many names as possible and cross out the names that are not available from your list.
Your company’s name should be unique and not identical to any company registered in Hong Kong.
File the incorporation documents
You can file the incorporation documents electronically through the Hong Kong Companies Registry e-Registry or you can deliver hard copies of the documents to the Company’s registry.
Once your application is received, it will be considered by the Companies Registry.
If your application is approved, you will be issued a certificate of incorporation to confirm that your UK company is now registered in Hong Kong.
You will get an email notification to download the digital copy of your certificate and you’ll also be notified to come and collect the hard copies of the certificate.
You can do this in person or your company secretary or an authorized representative can collect the certificate on your behalf.
Registering your UK company in Hong Kong is easy, straightforward, and inexpensive.
You can do this from anywhere in the world and the process can be completed in less than a week.
However, it’s important to engage professionals for a seamless company registration process.
If you’re ready to explore Hong Kong, sign up with Air Corporate to register your UK company in Hong Kong today.
April 1st, 2021 by Vivian Au
The real estate business in Hong Kong has long been known as one of the most dynamic in Asia, if not the world.
From residential to luxury to retail, Hong Kong has seen almost constantly increasing growth (although prices have leveled off recently).
Demand, however, is sure to remain constant.
Why Hong Kong is Great for Real Estate
- Businesses from all over the world want to set up in Hong Kong, and a recent high-luxury building housing project received 23,000 applications for fewer than 400 units.
- Prices are high, making it an ideal place for real estate business—in 2019, the average property price was $2,091 per square foot.
- The system is very simple and straightforward, and the financial returns are apparent
- Hong Kong is also known historically for providing tax breaks and incentives across many businesses.
- Finally, foreigners do well too: if you keep your money in Hong Kong, you pay no net-worth or Social Security-style taxes.
In addition, there is both a lot of capital in Hong Kong and low-interest rates for loans.
Taxes in Hong Kong are some of the most business-friendly in the world, so you’ll be able to enjoy a range of money-saving policies in real estate.
Taxes in Hong Kong (2020):
- 8.25% for the first $2 million in profits (Hong Kong Dollar)
- 16.5% on all additional profits
- You only pay taxes on money made within the borders of Hong Kong (single-tiered system)
- Personal taxes are low (2% -17%)
- No sales tax
- No capital gains tax
- No withholding tax
So what does it take to get into the real estate business in Hong Kong?
Overview of Real Estate in Hong Kong
First of all, it is essential to know that the state controls all the land in Hong Kong, so there are more government regulations and licenses than one might find in other countries.
That does not mean it’s necessarily more difficult to work in real estate, but you do have to pay close attention to the laws and their evolution.
If you’re a foreigner, there are actually no restrictions on ownership.
But all investors have to closely follow the rules.
Of course, you’ll be starting your real estate business in a land where rental prices can rival that of the most expensive cities in the world!
There are more than seven million people living in a very small area, so the city has a very high population density.
A recent report showed that the city has the highest average house price on the planet, at over 1.2 million USD per home.
First Steps To Starting a Real Estate Company in Hong Kong
Hong Kong, like Singapore, is a free economy.
It’s also known for a non-interventionist regulatory stance.
So creating your company is faster and easier than in most other countries.
First, visit and get to know the Companies Registry in Hong Kong.
This government site—most accurately, for the Government of the Hong Kong Special Administrative Region—not only has all you need to get started, but it will also have the latest rules and regulations for businesses.
The first steps will be:
- Choose a name for your brand new company. One interesting regulation about business names from Hong Kong’s government: “A company may be registered with an English name, a Chinese name, or an English name and a Chinese name. A company name with a combination of English words/letters and Chinese characters is not allowed.”
- Show ID, proof of residence, and fill out the application (whether your business has shareholders or is a single owner).
- Download your Certificate of Incorporation and Business Registration Certificate. You can get these from the website sometimes in just an hour!
- Finally, you’ll need to secure any permits or licenses required specifically by real estate.
Real Estate Agency or Solo Practice?
Are you looking to open an agency or work as a solo real estate agent?
Either way, you’ll need to set up a company.
You must have a Hong Kong estate agent license if you are:
- The sole owner/employee of a real estate business
- A company director or partner in a real estate business
- The manager of any real estate agency
As with the real estate industry in most other countries, you are not legally allowed to operate without a license.
Once again, Hong Kong makes entry easy.
You can find all of the rules, regulations, and the application for a license with the Estate Agents Authority in Hong Kong.
Life in Hong Kong Real Estate
No matter what, you’ll be busy. Demand is high in the Fragrant Harbor and doesn’t look to go down anytime soon.
Salaries for real estate agents vary depending on experience.
A new agent earns an average of over $30,000 USD/year, while agents with over eight years of experience make it closer to an average of $70,000 USD.
There is no doubt that the events of the last year have affected the Hong Kong real estate market, as with the rest of the world.
But with this much demand, the sector is bound to bounce back.
For real estate agents, both veteran and new, Hong Kong will remain a great place to work.
Registering yourself as a real estate agent now will put you in a position to take advantage!
Registering a real estate company in Hong Kong also gets easier with Air Corporate.
Register your business with Air Corporate today and you’ll get the guidance, tools, and guarantees that will make sure your business starts off on the right foot.
Finding a job is a two-way street. While there is a lot of talent in the market, matching the candidate to the job profile is no easy feat.
That’s where a recruitment agency steps in and performs the crucial role of finding the ideal candidate from the talent pool to meet the client’s requirements.
According to the Employment Ordinance, which governs various employment conditions in Hong Kong, a recruitment agency refers to “an establishment or person who aims to obtain employment for another person, or supply personnel to an employer.”
In other words, a recruitment agency acts as the intermediary to source suitable candidates.
Recruitment agencies are an integral part of Hong Kong’s economy.
As of May 2020, there are 3,148 licensed employment agencies that are registered with the Labour Department in Hong Kong.
If you are keen on setting up one, here’s a handy guide addressing all your queries:
When do you need a license for your recruitment agency?
Unless your business pertains to any of the exempted categories, you need a license for operating a recruitment agency in Hong Kong.
Exempted categories need to apply to the Labour Department to obtain a Certificate of Exemption.
The following recruitment agencies are exempted:
- operational under the Merchant Shipping (Seafarers) Ordinance
- operating on behalf of the government of Hong Kong
- operated by employers to hire employees for their organization alone
- operated by educational institutions for assisting their graduates/students in finding employment
- operated by a contractor or sub-contractor for hiring manual labor for carrying out building works
- operated by the owners of a publishing house for non-profit purpose
Starting a recruitment agency without obtaining a license from the authorities is a punishable offense.
It can attract a penalty of HKD 350,000 and imprisonment for three years.
Are there any special conditions to be fulfilled before I apply for the license?
Prior to sending any license application for processing, you need to incorporate and register a Hong Kong Company.
A person should be appointed as the nominee of the company, designated as the nominated operator.
Such a person is responsible for the routine operations and management of the agency.
In case the recruitment agency assists overseas domestic workers to find opportunities in Hong Kong, they must comply with the relevant regulations for the same.
Who can be appointed as a nominated operator?
Such a person should either be a citizen of Hong Kong or a Permanent Resident or hold an employment visa.
The person can be the director or an officer of the recruitment company.
Additionally, the nominee should not have been declared bankrupt or charged with any offense in the last five years when the license application is made.
What is the procedure to apply for the license to register the recruitment agency?
The first step involves submitting a name for the recruitment agency for approval by the Labour Department.
In case the name infringes on a trademark, or sounds similar or identical to the name of an existing recruitment agency, or is offensive to the public interest, the department can reject the application.
Once the Labour Department approves the name, the following documents must be submitted:
- Duly filled application form for obtaining the license for the recruitment agency along with the supplementary form;
- Certified true copies of the company documents such as the Business Registration Certificate, Certificate of Incorporation, and Articles of Association;
- Certified true copies of the Notification of the first secretary and directors of the company and subsequent changes (if any);
- A certified true copy of the document that confirms the appointment of the nominated operator; and
- A certified true copy of ID cards issued by the Hong Kong government or travel documents of every director and the nominated operator. The purpose of the travel documents is to place on record that the relevant persons are free to travel and take up new employment or establish a new business within Hong Kong.
The director or the nominated operator must submit these documents.
Typically, there’s a short in-person interview after the documents are submitted.
How long does it take for approval?
Usually, you can expect to hear from the Labour Department within 3-4 weeks from submitting all the documents.
To receive the license, you also need to pay a license fee which is currently HKD 2000.
What is the validity of the license?
The validity of the Employment Agency License in Hong Kong is 12 months.
That’s why you need to start the recruitment agency within that period.
Are there any other conditions related to the license?
It must be displayed prominently on the office premises at all times.
Failure to do that is an offense and attracts a maximum penalty of HKD 10,000.
How can I renew the license?
To renew the license for your recruitment agency, submit the renewal application at least two months prior to the expiry date of the license.
The renewal fee of HKD 2000 and the following documents must be submitted to the Labour Department:
- Duly filled copy of the ‘Renewal of License’ application form;
- A declaration (in the prescribed format) from the applicant that they have not been declared as an undischarged bankrupt;
- A true certified copy of the Business Registration Certificate for the recruitment agency; and
- Authorization from the applicant that the authorities can conduct a check on their criminal record
What can I do if my application for obtaining a license for my recruitment agency is rejected?
The best way is to file an appeal with the Administrative Appeal Board of the Labour Department.
However, you must file the appeal within 28 days of receiving the rejection.
Are there any best practices that need to be followed by recruitment agencies?
The Commissioner for Labour has issued the Code of Practice for Employment Agencies for promoting professionalism and better service in the industry.
Recruitment agencies should comply with the terms of the same.
Irregularities or non-compliance can result in the issuance of warning letters from the Commissioner of Labour.
Ready to set up a recruitment agency in Hong Kong?
If you are keen to set up a recruitment agency of your own but feeling overwhelmed by the procedure, there’s no reason to worry!
Register your recruitment agency with Air Corporate today, and you’ll get
Focus on your business. We take care of the rest.