Set Up Your Company & Business Account in Hong Kong

Make your business idea in Hong Kong come true by following a simple, step-by-step plan. Easily handle tasks like registering your company, meeting legal obligations, and setting up a bank account with confidence.

This detailed guide will provide you with the information and tools needed for a smooth Hong Kong company formation with bank accounts.

Setting Up a Company in Hong Kong

Types of Hong Kong Companies

Before registering your company in Hong Kong, it's important to understand the different types of business structures available. Choosing the right type will impact your legal obligations, tax responsibilities, and overall business operations.

Registering a Hong Kong Company

Anyone can register a company in Hong Kong, including individuals and businesses from anywhere in the world. You don’t need to be a resident or hold a specific nationality. Foreigners, non-residents, and international businesses are all eligible.

However, to complete the registration, you must meet Hong Kong’s minimum requirements. 

Below is an overview with a simplified process, leading you through the essential steps and factors for a successful Hong Kong company registration.

Minimum Requirements

• Directors: At least one (individual or corporate entity), no residency restrictions. Publicly recorded.
• Shareholders: Minimum one (individual or corporate entity), can also be a director. Publicly recorded.
• Company Secretary: Must appoint a Hong Kong-based individual or company to ensure compliance.
• Company Name: Unique, available in English or Traditional Chinese, not misleading or offensive. Check via e-Services Portal.
• Registered Address: Physical Hong Kong address required; no P.O. boxes allowed.
• Share Capital: No minimum requirement; typically starts from HKD 1 per share.
• Business Licenses: Check if your industry (e.g., banking, construction) needs specific licenses.

Required Documents

• Notarized passport copies for directors/shareholders.
• Proof of residential address (recent utility bill or bank statement).
• Notarized corporate documents (if registering an existing foreign company).
• Passport copy of representative (if applicable).

Step-by-Step Registration Process

Following these steps ensures a smooth, compliant company setup and prepares your business for operation and growth in Hong Kong.

Opening a Business Bank Account in Hong Kong

Having a dedicated business bank account showcases professionalism and transparency. It establishes a clear separation, making accounting and record-keeping more straightforward. With a business bank account, you can easily track income and expenses, manage payroll seamlessly, and efficiently monitor cash flow.

However, company formation with a bank account as a non-resident involves several steps and requires various documents. Here's a detailed breakdown of the requirements.

1. Company Account Applicant (HK registered company)

• Certificate of Incorporation (CI): Official proof of your company's legal existence in Hong Kong.
• Memorandum and Articles of Association (M&A) or Articles of Association (A&A): Documents outlining your company's structure, governance, and share capital.
• Business Registration Certificate (BR): Confirmation of your company's registration for business operations in Hong Kong.
• Bought and Sold Note and Instrument of Transfer (if applicable): Documents evidencing share purchase, relevant only if registered in Hong Kong.
• Certificate of change of name (if any): Official documentation for name changes.
• Organizational Chart (if multi-layered corporate structure): A diagram illustrating the company's hierarchy and ownership structure.

2. Corporate Shareholder (if any)

• Certificate of Incumbency (COI): Issued within the latest 3 months, proving officers and directors of the shareholder company (if not registered in Hong Kong).
• Certificate of Incorporation (CI), Memorandum & Articles of Association (M&A): Similar to those for the Company Account Applicant.
• Certificate of change of name (if any): Similar to Company Account Applicant.

If the corporate shareholder is a HK registered company, follow the same document requirements as stated above (Company Account Applicant).

3. Shareholders, Directors, and/or Authorized Signors

• ID cards and Passports: Official identification documents for all individuals involved in the company.
• Residential address proof: Recent utility bills or tax demand notes, translated into English if in another language.

4. Company Business Proofs

• Business plan and product catalogue: Clear outline of business strategy and offerings.
• Latest audited financial reports: Financial statements reflecting the company's financial health.
• Latest tax demand notes and 3 months of bank statements: Demonstrating tax compliance and financial activity.
• Top 3 buyers and suppliers list with documents: Listing key business partners with supporting documentation like contracts, invoices, and bills of lading.
• Tenancy agreement and MPF records: Proof of physical office location and employee contributions to the Mandatory Provident Fund (MPF).
• Evidence of "Business address" and/or "Principal Place of Business" (if different): Relevant proof if operational address differs from registered business address.

5. Director, Shareholder, and/or Ultimate Beneficial Owner's Proof of Source of Wealth:

• Personal resume (CV): Professional background information.
• Employment contracts and salary records: Showing income sources.
• 3 months of personal bank statements and tax demand notes: Demonstrating financial standing and tax compliance.
• Documents proving source of wealth: Any documents like property ownership, investment accounts, or inheritances demonstrating the origin of funds used for establishing the business.
• Director / shareholder / Ultimate Beneficial Owner other owning company details (if applicable): Providing similar documentation for other companies owned by these individuals.

Challenges of Opening a Business Bank Account in Hong Kong

Opening a corporate bank account in Hong Kong can be challenging due to strict regulations and bank policies. Here are the key obstacles businesses may face:

1. Strict Compliance Requirements: Hong Kong banks follow strict anti-money laundering (AML) regulations to ensure the security of the banking sector and prevent illegal activities.
2. Limited Interest in Small Businesses: Banks often prioritize large corporations over small and medium-sized enterprises (SMEs) due to the higher costs of compliance and lower profitability.
3. In-Person Verification for Foreign Entrepreneurs: Many banks require at least one company director or authorized signatory to visit a Hong Kong branch in person.

Best Banks for Business Accounts in Hong Kong

Here are some well-known and reputable banks in Hong Kong for business accounts:

How to Open a Hong Kong Business Bank Account

Tax Compliance for Hong Kong Companies 

Although Hong Kong typically doesn't impose capital gains tax from selling assets, there are instances where these gains could be regarded as profits and become subject to taxation under the profits tax return. After successfully registering a Hong Kong company formation with a bank account, ensure smooth operation and compliance with regulations by considering the following:

1. Profits Tax: This is the main tax on business profits earned in or derived from Hong Kong, Profits tax is currently set at a standard rate of 16.5%. There's a two-tiered system, providing a lower corporate income tax rate of 8.25% for the first HK$2 million of assessable profits.

2. Salaries Tax: This is a progressive tax applied to individual salaries earned in Hong Kong, with rates ranging from 2% to 17%. As a business owner, it's your responsibility to deduct and remit this tax on behalf of your employees.

3. Property Tax: This is an annual tax based on the assessable value of owned property in Hong Kong, typically around 15%.

4. Goods and Services Tax (GST): This is a 5% consumption tax on most goods and services supplied in Hong Kong. Note that certain transactions and businesses are exempt, so check your eligibility.

Costs & Fees for Company Formation and Business Banking

Most banks charge an appointment and application fee, and you’ll also need to pay an opening fee ranging from HKD 800 to HKD 1,200 for processing your application.

Transaction & Withdrawal Fees

Banks charge fees for various transactions, including:

• Local and international transfers: Sending or receiving money between banks may come with additional charges.
• ATM withdrawals: If you withdraw cash from an ATM that doesn’t belong to your bank, you may have to pay a fee.

Monthly Maintenance Fees

If your account balance falls below the bank’s required minimum balance, you may be charged a monthly maintenance fee.

Foreign Exchange Fees

When dealing with international transactions, banks use their own exchange rates, which may be lower than the real mid-market rate.

How to Reduce Banking Costs

• Compare banks to find the lowest account fees and best exchange rates.
• Maintain the minimum required balance to avoid monthly charges.
• Use your bank’s own ATMs to avoid extra withdrawal fees.
• Consider fintech alternatives like Airwallex or Wise for international transactions with lower exchange rate markups.

Being aware of these costs helps you plan your business finances better and avoid unnecessary fees.

Conclusion

Establishing a business in Hong Kong offers entrepreneurs a gateway to one of the world’s most dynamic financial hubs. While the process may seem complex, the right approach ensures a smooth company formation and banking setup.

Need a hassle-free way to incorporate your business? Air Corporate simplifies the process, handling everything from registration to bank account setup. Get started today and launch your company with confidence!