Starting a Business in Hong Kong in 2020 - All You Need to Know
29 January, 2020
While thinking about setting up a business in any place, many things come to mind like business structure, business environment, business rivals, economy, and so many relatable things. Have you heard about the business environment of Hong Kong? Now more than ever, investors and new startups are entering Hong Kong's business market to set up their businesses.
Thus, if you are considering starting a business in Asian markets, then Hong Kong would be your best choice. With solid growth prospects, Hong Kong is a dynamic city for new start-ups to start their business.
Why choose Hong Kong for your business?
Hong Kong has been nominated as a record-holder for the past two decades for being the world's freest economy. Over time, Hong Kong is becoming the global leader in the banking and business sector beating the UK, USA and even Japan as the least corrupt country in the World. Moreover, this place is crowned as the 5th fastest-growing business environment and also ranked as the 25th most developed place in the World, Hong Kong has an estimated value of USD 3.2 Billion in the startup field!
Advantages of starting a business in Hong Kong
Before opening a company in Hong Kong, it is always advisable that, the novice founders do some research on how they will benefit from this place. If people are setting up businesses in Hong Kong without any due diligence, then they must have some very compelling reasons. Do you want to know, 'why'? Why big companies like Facebook, PepsiCo, etc. have spread out to every corner in the world? Below are some benefits of starting a business in Hong Kong-
- Strategic location to access Asian markets
- The government announces special programs for startups!
- Hong Kong businesses are recognized worldwide!
- Great banking facilities with low corruption rate
- World top economy with maximum freedom
- Hong Kong permits easy selling of corporate shares
- Liberal Immigration Policy
- Lower tax burden
- Reduced business risk
- Productive work-place
- World-class infrastructure
- Stable economy
- An effective legal system
- A favorable political environment
- Pro-business environment,
These are the effective factors that continue to contribute to its success.
Steps to start a company in Hong Kong
Are you ready to make your mark as an entrepreneur in the Hong Kong start-up market? Below are some steps to take in order to establish a new company in Hong Kong.
Choose Company Name
The first and foremost step is to choose the name of your company in Hong Kong. Always remember that the company's name needs to be unique. It should not already be in use by any other business market. In order to search for the company's name availability, you can always opt for software on Startupr's website that allows you to be sure about the name of your company. Every business person must be sure enough before proceeding with the Hong Kong company incorporation.
Choose Legal Structure
The next step to start a business in Hong Kong is to choose the legal structure. Selecting the business structure is as important as choosing the business location. When the business structure doesn't make a suitable match to the objectives and ideas of your organization, then there are more chances that your business will have to face the failure stage.
Some common types of business entities in Hong Kong that you need to know of:
- Private company limited by shares
- Public company limited by shares
- Sole proprietorship
- Limited Partnership
- Company Limited by Guarantee (Non-Profit Organization)
- Branch Office for Hong Kong Private Limited Company
- Registered Non-Hong Kong Company
As per your business requirements, you can choose to open your business in Hong Kong.
Register Your Company
In order to start a company in Hong Kong, the business ventures are required to provide a local Hong Kong address as their official registered company's address. The government of Hong Kong will then issue the important documents to this registered address. The registered address can't however be a post office box; it has to be a physical address in Hong Kong.
In case business owners are not able to secure a physical address in Hong Kong, they are free to choose Startupr's registered address for their new Hong Kong business along with many other services. Startupr assists in these services due to their direct relationship with government agencies such as Companies' Registry.
Open a Bank Account
Once the company has been incorporated in Hong Kong, you need to open a bank account for your business transaction. Even though the process of opening a bank account is slightly tough, with the help of Startupr, you can be guided in the right way. Here are some steps that you should follow to open a bank account in Hong Kong.
- After the incorporation of the company, conduct proper research into the banks and decide which banks meet your business requirements.
- Collect all the important documents that need to be submitted to the banks. Startupr can help with bank appointment arrangements if hired for it.
- Make sure that you are following all the requirements of the bank.
- Make an appointment with the bank and submit the application and other required documents to the bank.
- As soon as the bank approves your document, your account is opened, and you may use the online banking freely and easily.
Take Business Licenses and Permits
Similar to the regulations of any country, companies in Hong Kong in specific sectors need to apply for licenses and permits. The requirements for getting the licenses and permits are not limited to the type of business entity conducted; it also includes the use of certain assets or intellectual property used for business.
Since the ideas or designs of the company can easily be copied from each other, the companies should take the license to protect their assets. In order to operate a specific type of business in Hong Kong, you need to have an exclusive license for that. Some examples of licenses spoken about are:
- Permit to run a particular kind of business
- Intellectual Property license
Make sure of ongoing Annual Requirements and Taxes
Another connected step that you need to follow to open a company in Hong Kong is to abide by the rules and regulations related to the annual filing of your company. In fact, you are also required to be aware of the deadlines designed by the Companies' Registry and the Inland Revenue Department. The following are some requirements that you need to follow during the annual filing of your business entity :
- Every year, file an Annual Return that contains the particulars of the company to the Companies' Registry (CR)
- Each year, file a Profits Tax Return to the Inland Revenue Department (IRD) and attach your audited accounts
Every business entity has different requirements for annual filing; whether you are a different type of business entity in Hong Kong, you need to follow it accordingly!
How can Startupr help you?
With all the information and details regarding incorporating a business in Hong Kong, you are already on your way to start a company in Hong Kong. For any professional help or guidance regarding any service, whether it is about getting a registered address, opening a bank account, or applying for business licenses, Startupr is here for you. We offer a complete one-stop package for company incorporation and other company services. You can select your desired service as per your preferences and needs from the customizable package of services by Startupr. Learn more about all the services, requirements, and facts for Hong Kong Companies by visiting the services page of Startupr!
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