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Guide to Building Your Business in Hong Kong

Updated: Apr 17, 2019


Written By: Peony Wong @ Ooosh Coworking




Whether you are a local entrepreneur in Hong Kong, or an overseas brand about to set up a regional office in this global city, there are both administrative and cultural factors that you can address to help your business succeed. This guide helps entrepreneurial-minded individuals and teams strategically approach doing business in Hong Kong, from checking off administrative boxes, to longer-term business decisions, such as talent recruitment, B2B and B2C market considerations, local marketing channels, as well as business culture.


This post includes the following:

  • FAQ for starting a business in Hong Kong

  • Getting to know Hong Kong’s startup ecosystem

  • Setting up a company

  • Accounting

  • Recruitment

  • Local market culture: B2B and B2C

  • Marketing


FAQ for starting a business in Hong Kong



Before we dive into business considerations, here are some quick answers to common questions from overseas entrepreneurs and businesses:


Do I need to live in Hong Kong to start and run a company?

No, and you do not need to be a Hong Kong resident. If you have a co-founder who is a local resident, it will simplify some administrative processes, such as opening a bank account.


Do I have to open a Hong Kong bank account?

Registering a company in Hong Kong and opening a bank account are separate steps. You can register a company without opening a bank account. However, if you intend to be doing business in the city, it is more advantageous to open a local bank account.


How long does it take to set up the company.

There are now three ways to set up a company. They include the following:

  • 24-hour e-Registry portal

  • via the “CR eFiling” app (available on iPhone and Android), and

  • delivering hard copy documents in hard copy with payment for the direct fees.

Online applications can now be completed in about one hour while hard copy applications usually take four working days. Please note that these times are estimates and could vary case to case. You can also look into a pre-incorporated company or local agencies that can help you complete the business registration and set up a bank account for a fee.



Getting to know Hong Kong’s startup ecosystem



Hong Kong has a vibrant startup, tech, and small medium enterprise (SME) ecosystem. Entrepreneurs and founders doing initial research should also look into government support from InvestHK, startup hubs such as WHub, and startup community events on StartupGrind and Eventbrite to get a sense of the business landscape. Ooosh has seen our community members, from local startups to global brands, gain industry networks and resources by tapping into Hong Kong’s entrepreneurship ecosystem.


Tip 1: Use major events as launchpads

Sign up for key startup, tech, and industry events in town, such as the RISE Conference or StartMeUpHK, and make sure to attend satellite networking events. Events can range from socials at bars to invitation-only talks at coworking spaces. Staying a few extra days can help with follow-up meetings that cement business opportunities.


Tip 2: Visit coworking spaces to see if they have a business culture fit

Hong Kong has over 200 coworking spaces, each with their unique offering and community. Don’t work out of cafes. Instead, ask co-working spaces about their short-term passes, such as Ooosh’s hot desk pass, which is designed to let businesses get a taste of our coworking culture and meet other businesses and potential partners. As a tip, reach out to coworking spaces before your visit and ask them to introduce members who may have synergies with your business.


Tip 3: Leverage Hong Kong’s accelerator programs

Hong Kong has a formidable list of startup accelerators, from early-stage to growth stage. Increasingly, accelerator programs have become industry focused, such as ones for FinTech and AI. Where relevant, apply for one to land in Hong Kong with support system. Do your research on the past cohorts for each accelerator, but here are some to start: SuperCharger Fintech Accelerator (FinTech), Brinc (IoT), HKAI LAB (AI), zeroth.ai (AI), Betatron.


Setting up a company


As our guide is aimed to help you map out the high level considerations for your business to succeed, we encourage you to search for step-by-step guides for setting up your company. The Hong Kong Government website also provides detailed information. Apart from taking the necessary steps of deciding on a legal company name, registering and incorporating your business entity, opening a bank account, and applying for the relevant permits and licenses, you should also consider the implications of administrative decisions for your business in the long-term.


In Hong Kong, there are four business entities: a sole proprietorship, a Limited Liability Company (LLC), Partnership, and Foreign Company Office. In most cases, the LLC is the best choice. The fastest way to set up a company in Hong Kong is to search for a service provider to help you register one for a fee, especially if you are not already in Hong Kong. When comparing across service providers, check the scope of services included, which may affect your company administrative work later on.

Assuming you are setting up an LLC, we have outlined considerations for business requirements:


Assuming you are setting up an LLC, we have outlined considerations for business requirements:


  • Company Secretary: This can be a person or company, which handles annual returns to the Hong Kong government. They should also handle related amendments in Board of Directors & Transfer of Shares.

  • Accounting: Filing annual returns requires a certified accountant. Also seek an accountant to provide taxation advice if your business involves overseas income.

  • Legal Solicitors: If your business involves IPR or government licensing, seek an appropriate solicitor. A reliable solicitor should be able to assist you items such as Articles of Association, Shareholder's Agreement, Employment Contract and IP matters.

  • Accepting Payments: Having a local bank account significantly helps with local bank transfers, salaries, and payment handling. For digital payments, Paypal and Stripe are both available in Hong Kong.


Summary Tip: Source reliable professionals through coworking spaces that have a focus on company founders and local SMEs, rather than places that cater to freelancers, agencies, or global brands. For example, the Ooosh Mentor and Ooosh Connect programs introduce network members to help businesses find relevant advice and services, from accounting and legal work, to fundraising and software development agencies for a prototype.


Accounting



All business entities apart from a Sole Proprietorship require annual tax filing with audited accounts by a certified accountant. Hong Kong’s profits tax is quite low at 8.25% for the first HK$ 2 million and 16.5% for revenue over HK$2 million, as outlined in the Inland Revenue Department website. Importantly, Hong Kong has no capital gains tax. The Hong Kong Government has also announced various tax incentives for technology companies in the 2019-20 Budget, which may be applicable for some business.


Finally, note that non-residents working in Hong Kong are liable to salaries tax, but not all income is chargeable.


Summary Tip: If you are registering an LLC, consider finding an accountant in addition to the basic accounting and auditing services provided by an agency that sets up your company. An experienced accountant will be able to advise you on how to best to optimise your tax returns.


Recruitment