There are now many start-ups and Hong Kong limited companies start in Hong Kong, thanks to its dynamic economy. In addition to being the most perfect palce for shopping, Hong Kong is a stunning tourist destination. It is for these reasons that Hong Kong is the perfect place for businesses and private limited companies. But since starting a business in Hong Kong is not so easy, we have a complete guide for you.
Hong Kong can be very challenging, so you need to have a great business plan in order to succeed. It is ranked as the 5th most powerful ecosystem in the world, which makes it a promising place to start a business. Due to its location in the heart of Asia, Hong Kong is a prime location for trade and the establishment of a Hong Kong limited company.
Why start a business in Hong Kong
Here are some of the most important reasons why Hong Kong is attracting investors to set up a business in Hong Kong:
- Taxes are less burdensome
- Wide range of investment opportunities
- Corporate shares are easy to sell
- Hong Kong’s Geographic Location
- Exceptional infrastructure
- The Economy of Hong Kong is Growing
- The Government’s Special Initiatives
- Banking services that are excellent
- Labor Force with Talent
Step by step guide for how to start a business in hong kong
The first step is to set up your business. Steps to take for the establishment of a new company in Hong Kong are listed below:
Name your company
When forming a Hong Kong company, you should first determine what your company’s name will be. The name of your new business entity cannot be the same name as anyone else’s already used or has used in the past.
Create your business’ legal structure
Build the start-up structure according to the needs and requirements of your company. Structure affects everything about your business entity, from how you do business to how you file taxes. Here are some options to consider when choosing the right structure for your business:
- Company limited by shares
- Company limited by guarantee
- Branch office
- Limited company
- Partnership and proprietorship
Your company must be registered
If you wish to establish a business in Hong Kong, you must register. Limited companies are very popular among entrepreneurs in Hong Kong because of the many benefits they provide. In limited companies, personal assets are protected from business risks, making them a legally separate entity. A limited company’s ownership and capital can be transferred and raised quite easily compared with other types of businesses.
Open a business account
If you want to formulate your own ventures, gaining access to financial services is essential. Establishing a personal bank account is a fairly straightforward process. Anyhow as a business owner, you are required to show more documentation to the bank.
Licenses and permits are required
As the next step in starting a business in Hong Kong, obtaining licenses and permits is required. Depending on the type of business you have, there might be several types of permits and licenses. Government and online license services can help you to find out about licenses that suit your business.
Companies doing business outside of Hong Kong are not subject to Hong Kong’s profit tax. In Asia and across the globe, Hong Kong has some of the lowest taxes. Hong Kong applies an 8.25% profits tax to businesses earning HK$2 million or more and 16.5% to everything after that. Capital gains are not subject to this tax.
Insurance requirements and pensions
It is a requirement in Hong Kong that employees are enrolled in the mandatory provident fund scheme (MPF) prior to starting a new business. This ensures that all your employees of the company are covered by a proper policy. As well, make sure all part-time and full-time employees working for your company are between the ages of 18 and 65.