Starting a Business in Hong Kong

Starting a business in Hong Kong is simple and straightforward, with the vast majority of foreign investors opting for a limited liability company (LLC) as their preferred investment vehicle. The following is an overview of the various legal and regulatory requirements of starting a business in Hong Kong:

Hong Kong boasts one of Asia's fairest and most transparent legal systems, offering high levels of protection to investors starting a business in Hong Kong. Entrepreneurs can reasonably expect strong intellectual property rights protection in Hong Kong (this is one of the principal factors in Hong Kong's continued ranking as the world’s freest economy in the Heritage Organisation’s 2011 Index of Economic Freedom). Furthermore, low corruption levels among public officials and politicians are factors behind Hong Kong's low 12th-place ranking in the 2011 Corruption Perceptions Index by Transparency International.

Company law is outlined in the Hong Kong Companies Ordinance of 1997. The Companies Registry controls starting a business in Hong Kong. Through the Companies Registry, Hong Kong (and foreign) companies are registered and administered, corporate compliance and disclosure obligations are monitored, and statutory audits by Hong Kong public accountants are regulated.

Although the LLC is the most popular entity for entrepreneurs starting a business in Hong Kong (more than 130,000 are incorporated in the city in 2010 alone), alternative corporate structures are available. These include i) sole proprietorship ii) the limited liability partnership (LLP) iii) the branch office and iv) a representative office.

Like an LLC, a Hong Kong Branch Company is established via the Companies Registry. This entity retains the legal identity of its foreign parent, and must also adopt its parent's name. Audited financial statements relating to its Hong Kong operations must be filed every year with the Hong Kong Inland Revenue Department.