Registering a business in Hong Kong is the initial step in leveraging its market potential.
Business registration is governed by the Companies Ordinance and administered by the Inland Revenue Department (IRD).
A Business Registration Certificate (BRC) confirms official registration, used for bank accounts, contracts, licenses, and demonstrating legitimacy.
The Business Registration Number of a company is also known as its “Unique Business Identifier (UBI)” and “Tax Identification Number (TIN).”
Hong Kong is an attractive market for investors and entrepreneurs from all over the world, with China and the Asia-Pacific region right on its doorstep. The city consistently ranks as the world's freest economy as an international economic center with excellent technology infrastructure.
Understanding Hong Kong Business Registration
The Companies Ordinance of Hong Kong can help anyone who wants to register a business in Hong Kong. This is an official document that outlines the legal parameters within which businesses can operate in Hong Kong.
Business registration is governed by the Companies Ordinance and processed by the Business Registration Office under the Inland Revenue Department (IRD). All companies, whether local or foreign, must register their operations and obtain a BRC.
Here are some other facts concerning Hong Kong company registration that individuals and corporations should be aware of:
Basic Requirements
Director
Every company must appoint at least one director who can be of any nationality. There is no requirement for the director to be a Hong Kong resident.
Shareholder
A private limited company must have at least one and no more than 50 shareholders. Shareholders can be individuals or corporate entities and do not need to reside in Hong Kong.
Share Capital
There is no statutory minimum share capital requirement. However, HKD 10,000 is commonly used, represented by 10,000 ordinary shares at HKD 1 each, for practical and administrative purposes.
Company Secretary
All limited companies must appoint a company secretary. The secretary must be a Hong Kong resident or a local corporate entity with a registered office in Hong Kong.
Taxation Overview
Territorial Tax System
Only income that arises in or is derived from Hong Kong is subject to tax. Foreign-sourced income is generally exempt unless it falls under specific anti-avoidance rules.
No VAT or Withholding Tax
Hong Kong does not impose value-added tax (VAT), nor does it levy withholding tax on dividends or interest. This makes it a favorable jurisdiction for international business.
Two-Tier Profits Tax Regime
For corporations, the first HKD 2 million in assessable profits is taxed at 8.25%; profits above this threshold are taxed at the standard rate of 16.5%. For unincorporated businesses, the rates are 7.5% and 15%, respectively.
Offshore Profits Exemption
Profits derived from outside Hong Kong may be exempt from tax if the company can substantiate the claim and obtain approval from the IRD.
Compliance Requirements
Bookkeeping
Companies are required to maintain accurate and up-to-date accounting records that reflect their financial transactions and position.
Annual Audit
All Hong Kong-incorporated companies must have their financial statements audited annually by a Certified Public Accountant (CPA) in Hong Kong.
Tax Filing
Companies must submit audited financial statements along with their Profits Tax Return annually to the IRD, regardless of income level.
Opening a Corporate Bank Account
Companies that want to use reliable payment gateway providers like Stripe and PayPal should normally use banks in the same territory. The following documents are necessary to open an account in Hong Kong:
- Account application forms
- Corporate registration documents
- Copies of passports of major members
- Personal resume
- A bank reference letter of each major member
- A bank statement of each major member or any related corporate
- Proof of business, such as agreements, invoices, and contracts of the current company or any related one
Benefits of Business Registration In Hong Kong
Before we go into the requirements of business registration in Hong Kong, it's crucial to understand the advantages of forming a company in the territory. These advantages are listed below:
- Registering a company in Hong Kong is streamlined and affordable. After an application is approved, the Certificates of Incorporation and Business Registration (“the Certificates”) are usually accessible within four working days.
- In 2024, Hong Kong ranked 5th globally in the International Institute for Management Development (IMD) World Competitiveness Yearbook, reflecting strengths in business efficiency, infrastructure, and international trade.
- In Baker McKenzie & Oxford Economics' Global Transactions Forecast 2020, Hong Kong is ranked 2nd in Asia-Pacific for IPO and M&A activity.
- Foreign investors can manage their Hong Kong-based company from anywhere in the world. They only require a local holding address rather than a physical address.
- Profits earned outside of Hong Kong are tax-free, but money earned in Hong Kong is subject to a 17% income tax rate on earnings exceeding HKD 200,000.
- Hong Kong is strategically placed in Asia alongside many of the region's most advanced business markets, such as China, Singapore, and South Korea.
- The city's legal system is separate from that of Mainland China and is based on English common law. Hong Kong's two main languages are English and Cantonese.
Documents Needed for Business Registration In Hong Kong
All the documents must be prepared when going through the business registration process in Hong Kong. These are outlined below:
Articles of Association
These are a set of rules that govern how a board of directors can run a business. It's often viewed as a contract between employees and members of the company and the company.
A company registration form must also be completed with the following information:
- The company name
- The registered business address
- An accurate description of the company's main activities
- Details relating to the company's shareholders, directors, and company secretary
- For firms with non-Hong Kong shareholders and directors, copies of passports and proof of residence in their respective countries are required
- If a company has local shareholders and directors, copies of their identity documents should be submitted
- A copy of the parent company's company registration documents is required in the event of corporate shareholders
- Company directors' responsibilities
- Total share capital
If any documents are provided in a language other than English, an English-translated document must be provided as well.
A Quick Look at What's on a Business Registration Certificate HK
What's on a Business Registration Certificate?
- Your business name (both Chinese and English, if applicable)
- Your Business Registration Number
- Your company type (sole proprietorship, partnership, limited company, etc.)
- Your registered office address
- The date of your business registration
What's the Business Registration Certificate used for?
- Opening a business bank account
- Entering into contracts
- Applying for licenses and permits
- Demonstrating your business's legitimacy to potential clients or partners
As of December 27, 2023, Hong Kong has implemented the Unique Business Identifier (UBI) system, wherein a company's Business Registration Number (BRN) serves as both its UBI and Tax Identification Number (TIN). This number is now used both on the Business Registration Certificate of a company and the Certificate of Incorporation.
Business Registration Process and Compliance Obligations in Hong Kong
How to Apply for Business Registration
In Hong Kong, businesses must apply for registration within one month of starting operations. You will need to complete the appropriate form (such as Form 1(a), 1(b), etc.), submit the required documents, and pay the necessary registration fee and levy.
For sole proprietorships, partnerships, and branch businesses, online registration can be done easily via GovHK.
Displaying Your Business Registration Certificate
Once registered, your BRC must be prominently displayed at the business location (printed if issued digitally).
However, local companies, registered non-Hong Kong companies, open-ended fund companies (OFCs), and limited partnership funds (LPFs) are not eligible for exemption. Also, if the same proprietor or partners operate multiple businesses, none will be exempt.
Existing businesses must apply online at least one week prior to the current certificate expiring, or on paper at least one month beforehand.
What to Do if Your Business Details Change
If your business information changes or you cease operations, you must notify the Commissioner of Inland Revenue within one month. You can do this:
- Online via GovHK
- In writing, or
By submitting the relevant forms:
| Change Type | Form |
|---|---|
| Change of Business Name | Form IRC3110A |
| Change of Business Address | Form IRC3111A |
| Cessation of Business | Form IRC3113 |
| Change of Partners | Form IRBR64 |
| Change of Business Nature | Form IRBR193 |
For local companies and Limited Partnership Funds (LPFs), any changes to business particulars must also be reported within one month after commencement of business. These updates will be automatically shared with the Commissioner.
Consequences of Non-Compliance
Failure to meet these obligations may result in:
- A fine of up to HKD 5,000
- Imprisonment for up to 1 year
Even if a business is exempt from the registration fee, it must still comply with the Inland Revenue Ordinance, including reporting chargeable profits within four months after the end of the basis period.
How to Submit Applications and Notifications
Applications must be completed in English or Chinese and submitted to the Business Registration Office in person or by post to “P.O. Box 29015, Concorde Road Post Office, Kowloon, Hong Kong.”
Faxed or emailed applications will not be accepted.
Check out this business registration certificate guide to understand why it is critical for anyone who wants to do business in Hong Kong.
Let Air Corporate walk you through the company registration process. Reach out to us today.
