3 steps to incorporating a business in Hong Kong, SAR
While Hong Kong, SAR offers many opportunities for investors, strict anti-money laundering procedures have created certain challenges when incorporating a business in the country.
In our Global Business Complexity Index (GBCI) 2024, Hong Kong, SAR ranks 76th out of 79 jurisdictions for ease of doing business, where 79 is the least complex business environment. Hong Kong, SAR’s strong and stable economy makes it an attractive choice for companies looking to expand into the Asia Pacific region, especially those seeking a gateway into China’s Mainland.
The country offers many advantages for investors, including a skilled workforce, attractive tax rates and government incentives. Starting and operating a business in Hong Kong, SAR is relatively straightforward, but investors should be aware of the strict anti-money laundering controls that can pose some challenges during incorporation.
3 steps to setting up a business in Hong Kong, SAR
1. Confirm company name
When choosing a company name, it’s important to ensure that the name is not too similar to that of another business and does not contain certain words requiring special approval (eg. bank, law, school, etc). The Companies Registry's Guideline on Registration of Company Names for Hong Kong, SAR Companies lists all guidelines for and requirements of company names and allows business owners to check potential names using its Cyber Search Centre.
2. Appoint at least one individual director
Every private company incorporated in Hong Kong, SAR must have at least one director. This must be a person of at least 18 years of age, but who may be of any nationality, occupation or residency status. Additional directors can be individuals or companies registered in any country.
3. Register the company
The following documents should be submitted with incorporation and business registration fees, either electronically through the Companies Registry’s electronic service portal, e-Registry, or via hard copies submitted to the Companies Registry:
- Form NNC1
- Articles of Association
- A notice to the Business Registration Office (IRBR1)
Incorporation via e-Registry can take as little as one day. Manual submissions are likely to take five business days.
Key registration information in Hong Kong, SAR
The following information is essential to submit when registering a company in Hong Kong, SAR.
- Company name (in English and/or traditional Chinese)
- Nature of the business with a Business Registration Certificate for one or three years
- Confirmation of method of registration (electronic filing or manual submission)
- Registered office (the address of which must be in Hong Kong, SAR)
- Number and liability of members
- Share capital and initial shareholding information, including:
- Class of shares
- Total number of shares proposed to be issued
- Total amount of share capital to be subscribed by founder members (including currency)
- Total amount to be paid up or to be regarded as paid up on the shares proposed to be issued (including currency)
- Founder member information, including:
- Name
- Address
- Share capital to be subscribed
- Director information (minimum of one individual director), including:
- Name
- Residential address (for individual) and/or company address (for corporate)
- HKID/passport (for individual)
- Company number (for corporations registered in Hong Kong, SAR)
- Secretary information, including:
- Name
- Hong Kong address
- HKID (for individual)
- Company number (for corporation)
Note: the company secretary must be a Hong Kong, SAR resident or a company incorporated in Hong Kong, SAR. The sole director cannot act as secretary.
Key legislation in Hong Kong, SAR
Companies incorporating in Hong Kong, SAR should know and understand the following key business legislation.
Section 67(1)(b) of Companies Ordinance (Cap. 622)
- For company registration, the addresses of the individual director and secretary must not be 'care of' addresses or post office box numbers.
- Every private company incorporated in Hong Kong, SAR must have a company secretary and at least one director (a person).
- The sole director of a private company cannot be the company secretary.
- The residential address of a director (a person) must be submitted to the Registrar.
- If the director is a body corporate, the address of its registered or principal office must be provided.
- If the company secretary is a person, he or she must ordinarily reside in Hong Kong, SAR and must provide a correspondence address there.
- If the company secretary is a body corporate, the address of its registered or principal office in Hong Kong, SAR must be provided.
- Directors must complete and submit the Form NNC3 to the Registrar no later than 15 days after the day of incorporation.
Sections 5A (1) and 5D (2) of the Business Registration Ordinance (Cap. 310)
- An applicant for company incorporation must deliver a notice to the Business Registration Office (IRBR1), the prescribed business registration fee and levy and Form NNC1.
Common mistakes made when registering a company
These are the two most common mistakes made by business owners when registering a company in Hong Kong, SAR.
- Individual directors must give their normal residential address. Addresses with “care of” or post office box numbers will not be accepted.
- If Form NNC3 is not filed within 15 days of incorporation, a penalty of HKD600 may occur.
Challenges when incorporating a company in Hong Kong, SAR
Despite the simplicity of its business environment, there are some challenges that companies may face when incorporating in Hong Kong, SAR.
Opening a bank account
Hong Kong, SAR banks have tightened their anti-money laundering procedures and consequently their requirements for opening bank accounts. They now require substantial due diligence documents and information on a company’s business activities, the background of the ultimate beneficial owners (UBOs) and personal information on shareholders, directors and bank authorised signatories. Banks may also request information or corporate documents showing the links between the company and the UBOs.
In addition, a face-to-face meeting with the UBOs or directors is required. Some banks are very reluctant to open bank accounts for non-residents.
After an interview and the submission of all required documents, your application will be subject to final approval from the bank’s compliance team.
Know Your Client (KYC) requirements
In March 2018, a new licensing regime for trust and company service providers (TCSP) took effect the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (Cap. 615).
The new regime resulted in increasing KYC requirements and requests for due diligence documentation before licenses will be granted.
Talk to us
Our experts on the ground offer services across the three core business lines of accounting and tax, global entity management and human resources and payroll. In addition to assisting with incorporation procedures, we help you streamline your operations and stay compliant.
To learn more about how we can help you set up a company in Hong Kong, SAR, make an enquiry today.
