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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.
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