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If you are a foreign company planning to explore future business opportunities in Hong Kong, registering a Representative Office (also known as RO) is a good idea.
Representative Offices are especially suitable for small to mid-sized companies to establish their presence in Hong Kong and gather valuable information about the target market before making significant investments.
However, it is important to know that such entities are prohibited from undertaking any profit-making activities or generating revenue on behalf of their foreign parent company.
While a Hong Kong Representative Office does not have an independent legal status and is exempted from registering with the Companies Registry, it is still required to obtain a Business Registration Certificate.
Registering a Representative Office is a straightforward process. This guide will tell you everything you need to know about Hong Kong Representative Office Registration.
The basics of Hong Kong Representative Offices
Before detailed the registration procedures, it is important to take a look at several key facts about Hong Kong representative offices.
What are the permitted activities of a Hong Kong Representative Office?
An RO is like a liaison office of its parent company that is permitted to hire local staff, conduct market research to know about the market opportunities, and coordinate other activities on behalf of the parent company.
It can only operate as a cost center. It cannot conduct any business, undertake any profit-making activities, or enter into contracts in its name or on behalf of the parent company for such activities. An RO cannot create any commercial legal obligations or incurring any debt or liabilities.
However, an RO can enter into agreements with a landlord for office space, hire employees locally, or contract with utility providers for day-to-day operations.
Is there a minimum capital requirement for setting up an RO?
An RO does not have a legal personality. It does not have a capital. There is therefore no capital requirement for the registration of an RO.
Who can register an RO?
Only companies incorporated outside Hong Kong can register a Hong Kong Representative Office. A company incorporated in Hong Kong cannot open an RO.
Is it possible to choose a name for an RO?
The name should be the same as the foreign parent company. In case there is an existing Hong Kong company with the same name as the foreign parent company, the RO can have a different name.
What is the procedure for Hong Kong Representative Office Registration?
You must submit the registration application for the Business Registration Certificate to the Business Registration Office of the Inland Revenue Department. The application must be made within one month of starting the operations and state that the business carried on in Hong Kong will be of representative or liaison office.
You need to submit a duly filled Form 1 (b) along with the true certified copies of the following documents :
- Name of the foreign parent company as per its certificate of incorporation. If the name is not in English or Chinese, you also need to enclose a certified translation in English or Chinese. If there have been any changes to the name of the company, submit all the names along with the supporting documents;
- The registered office address of the foreign parent company;
- Names and signatures of the directors, managers, company secretary of the foreign parent company; and
- Certificate of incorporation issued by the appropriate authority within whose jurisdiction the foreign parent company has been incorporated.
Additionally, you should also provide proof of the identity of the chief officer of the RO.
Currently, the fees for a one-year certificate is HKD 2,250.
How long does it take to receive the registration certificate?
Usually, the certificate is issued on the next working day. Please note that you should collect it in person.
In case you are unable to collect it in person, you can authorize your representative in writing to collect it on your behalf.
Here is a sample of Business Registration Certificate provided by the Hong Kong Inland Revenue Department.
Is the registration certificate valid for a lifetime?
The validity is for 12 months from the date of commencement as set out in the certificate. However, it is possible to request for a three-year certificate by filling appropriate forms and paying additional fees, which is currently HKD 5,950.
When should you renew the certificate?
You should renew it one month before its expiry date, whether the certificate is for one year or three years. You can renew it through post or by going in person.
Do you need to display the certificate in the office?
Yes, the Business Registration Certificate should be displayed at the premises at all times and must be clearly visible.
What are the tax filing requirements of an RO?
Since ROs are prohibited from engaging in profit-generating activities, it can either file a ‘NIL’ annual profits tax returns or seek an exemption from the Inland Revenue Department from filing tax returns in the future.
Can an RO open a business bank account for its operations in Hong Kong?
You can open a bank account only once the Business Registration Certificate is issued. Banks in Hong Kong would normally request for certified true copies of your Hong Kong Representative Office registration documents or a certificate of incumbency.
Our team can assist you and arrange certification by a law firm or a CPA firm.
Do ROs need to maintain any filings or statutory documents/registers?
Since ROs function as unincorporated entities, they are exempt from filing or maintaining any statutory documents with the Hong Kong Companies Registry. However, in case the RO hires any local staff, a record of such staff’s wage and employment history should be maintained.
What happens if the operations of an RO are shut down?
You must deregister the RO by notifying the Business Registration Office within one month of ceasing the operations. Please note that a Representative Office cannot be converted into a limited liability company.
Several foreign investors use ROs to test the waters in an unknown market before making a hard commitment. But managing the registration process from a foreign location can be overwhelming, which is where we can help.
Whether you are an entrepreneur, SME, or a digital nomad, our team of experts at Air Corporate can guide you with Hong Kong Representative Office Registration or if you decide to set up a company in Hong Kong. You can get unlimited access to advice from our professionals about all your queries regarding incorporating a Hong Kong company.
With Air Corporate, you can focus on your business while we take care of the rest.
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