Set Up Business in Hong Kong

Hong Kong Expansion Guide

Global Upside helps companies set up, hire, and operate in Hong Kong. Set up a legal entity quickly and easily with our solutions for branch, subsidiary, and rep office. Looking for an alternative to permanent establishment? Hire and pay employees in Hong Kong without a legal entity by using our PEO & employer of record services. Once your business is set up, our teams can support with recruitment and staffing, human resources, employee benefits, payroll, accounting, and tax.

Currency

Hong Kong Dollar (HKD)

Language

Chinese, English

Government

Presidential Limited Democracy

Country Overview

For a long time, Hong Kong had the world’s freest economy. The nation’s customarily open and market-driven economy has gotten progressively unified with the continent through trade, the travel industry, and monetary connections.-

  • Hong Kong ranks as the 34th largest economy in the world in terms of nominal GDP.
  • Hong Kong ranks as the 12th largest economy in Asia.
  • Hong Kong ranks top in “Freedom to Trade Internationally”.
  • Hong Kong ranks as the 3rd best country in the world for business.

Options for setting up a legal entity in Hong Kong include:

Limited Private Companies

Limited private companies is a form of establishment that requires at least 50 investors. There are no liabilities for the investors and the elected board of directors have complete responsibility for administration.

Limited Public Companies

Limited Public Companies is a kind of a legal entity set up wherein there is no limit on the number of investors. Authority to transfer and solicitation to the public to buy the shares or bonds.

Companies limited by guarantee (without share capital)

Companies limited by guarantee (without share capital) are almost similar to limited private companies except for the liability of investors is equivalent to their shares and assets.

It takes approximately three to four weeks to establish a legal entity set up in Hong Kong, depending on the kind of establishment required.

The major employment regulation in Hong Kong is the Employment Ordinance (EO) which guarantees many benefits.

It is not an obligation to provide employment agreements in a written format, however, most employers do provide one which mentions:

  • Probationary period
  • Working hours
  • Remuneration
  • Leave entitlements
  • Termination policy and notice period
  • Severance pays
  • Provident Fund Contribution
  • Medical Insurance

The payroll frequency is every month and salaries must be paid within 7 days of the consecutive month and the date of payment is decided by both the employer and employee.

In Hong Kong, the accounting standards are called Hong Kong Financial Reporting Standards (HKFRS) and set out acknowledgment, estimation, introduction, and divulgence prerequisites managing transactions and developments that are significant in general purpose financial reports. It is the use of HKFRS that gives us a valid and reasonable view of budget summaries.

Corporate Tax

The corporate tax rate in Hong Kong is 16.5%.

There is no VAT in Hong Kong.

One of Asia’s longest continuing extensive data protection laws is the Personal Data Privacy Ordinance, PDPO. The PDPO applies to both the public and the private sectors. It is automation-neutral and rule-based. The Data Protection Principles, DPPs, or DPP, which are included in Schedule 1 to the PDPO, summarized how information users should gather, process, and utilize personal information, integrated by different arrangements imposing additional consent prerequisites.

Anti-Bribery & Anti-Corruption Law

In Hong Kong, bribery and corruption are considered to be the same offense and is administered by the Prevention of Bribery Ordinance (POBO), Chapter 201 of the Laws of Hong Kong Special Administrative Region.
The consequences for bribery, under POBO, are:

1. Bribery for public officials:

For individuals:
i) Imprisonment for at least 10 years.
ii) A monetary fine of HKD 500,000.
iii) Seizure of the benefits received.
iv) Prohibition from holding any position in the firm.

2. Bribery for private officials

For individuals:
i) Imprisonment for at least 7 years.
ii) A monetary fine of HKD 500,000.
iii) Seizure of any benefits received.
iv) Prohibition from holding any position in the firm.