Business registration guide for entrepreneurs

Hong Kong’s entrepreneurial ecosystem has flourished in recent years, attracting startups and innovative talent worldwide. Since 2020, the number of startups in Hong Kong has increased by 40%, spanning diverse fields such as fintech, social innovation, and more. As Asia’s leading financial centres, Hong Kong not only serves as a bridge to global markets but also as a gateway to business opportunities in the Mainland and the Greater Bay Area — giving companies a distinct advantage to expand their businesses internationally.

This guide outlines the essential steps for establishing your business in Hong Kong, including choosing a company name, selecting an operational location and scale, handling business registration, understanding tax regulations, and opening a business banking account. With this information, you can carve out a new career path in Hong Kong in no time.

In general, business entities are divided into two types: corporations, which typically refer to limited companies, and non-corporate entities, such as sole proprietorships and partnerships, typically representing unlimited companies.

Procedures for setting up a limited company

Among various business models, establishing a limited company is one of the most popular options. When incorporating a local limited company in Hong Kong, your first step is choosing a company name. Make sure the name should comply with regulations and cannot be identical or too similar to any existing companies. You can verify your proposed name using the “Electronic Search” on the Hong Kong Companies Registry’s website or refer to the “Guidelines on Registration of Company Names for Hong Kong Companies” on the website for more details on naming considerations.

The Hong Kong SAR Government offers a one-stop company and business registration service. When you deliver an application for incorporation of a local limited company through the Companies Registry, you automatically apply for business registration — no separate application to the Business Registration Office will be needed. Once approved, the Companies Registry will issue both the Certificate of Incorporation and the Business Registration Certificate together. For more details on the steps to register a new company, please refer to the “Incorporation of a Local Limited Company” booklet.

Additionally, defining your company’s scale helps with financial planning and resource allocation. This includes assessing your initial investment, funding sources, and financial management capabilities to ensure long-term sustainability. You should also consider your manpower needs, from staffing numbers and required skills to training programmes. Understanding tax benefits and labour legislation will assist in shaping a suitable business model.

As for location, Hong Kong offers several startup-friendly areas. Choose a location that balances rental costs with potential revenue while ensuring compliance with relevant regulations to avoid legal issues. For more information, please refer to “Renting an Office or Business Premises”.

Procedures for setting up an unlimited company

An unlimited company typically refers to a sole proprietorship or partnership. Compared to limited companies, establishing and maintaining an unlimited company involves fewer procedures. You are not required to submit company registration forms or hire auditors. This makes setting up an unlimited company more cost-effective and suitable for small businesses. However, owners or partners bear unlimited liability for company debts, offering less protection for their personal assets.

Applying for business registration

Business registration applies to every business in Hong Kong. Even if you only plan to establish an unlimited company, you are still required to apply for business registration within one month of commencing operations.

When selecting a name for an unlimited company, avoid names that suggest: 

• the business is incorporated with limited liability;
• a connection with the Government or any public body when no such connection exists or has existed;
• the business is incorporated under a different name when no such connection exists or has existed

Applicants must submit completed business registration application forms and identity documents to the Business Registration Office of the Inland Revenue Department, along with the required registration fee and levy. Applications can be submitted in person, by mail, or through GovHK’s “eTax” online service. For more details on business registration, please refer to “Business Required to be Registered and Application for Business Registration” section on the Inland Revenue Department’s website.

Please note that business registration is not for regulating business activities, nor is it a licence to trade in Hong Kong. You should verify whether your business requires any additional licences, permits, certificates, or approvals before beginning operations, in addition to applying for business registration.

Tax arrangements and opening a business bank account

Hong Kong adopts a two-tiered profits tax rates regime with relatively low rates, making it exceptionally appealing to small and medium enterprises (SMEs). Under this system, the first HK$2 million of assessable profits for corporations (limited companies) is taxed at 8.25%, while unincorporated businesses (sole proprietorships and partnerships) are taxed at 7.5%. Profits beyond this amount are taxed at 16.5% and 15%, respectively. This measure reduces the tax burden on SMEs, supporting Hong Kong’s economic growth and diversification. For more details, please refer to the Inland Revenue Department’s FAQ on the two-tiered profits tax rates regime.

Opening a business banking account is a key step in starting a business. Business owners should select a suitable bank and prepare necessary documents in advance, such as the Business Registration Certificate. Note that most banks require a minimum deposit and may periodically review account activity. It is important to keep your account active to avoid account freeze.

As Asia’s financial centre and innovative technology hub, Hong Kong is an ideal location for startups and international businesses, offering countless opportunities. We welcome you to join Hong Kong’s entrepreneurial community and grow your business here in this vibrant city.