Setting up a company

Setting up a company

Hong Kong is renowned for being an easy place to set up a business. In under a week, and for few hundred US dollars, your company can be up and running. Importantly, the same rules apply to local and foreign companies – and a range of corporate structures are available.

Company Structures
Representative Offices
Rep offices’ are useful if you wish to explore the Hong Kong market before making a larger investment. However, your office can only fulfill limited functions, for example promotion and liaison work, such as collecting information and contacts. Should you wish to enter into any transaction which creates a legal obligation you will need to change the status of your business structure (see options below).

For the following corporate structures it is necessary to:
i) incorporate your company at the Companies Registry; and
ii) register your company with the Inland Revenue Department.

Branch Offices of Parent Companies
Where a company incorporated outside Hong Kong establishes a branch office in Hong Kong as an extension of the investing company, it is referred to as an “overseas company”. Unlike a subsidiary, a branch can leverage off the credit rating of the overseas owner. The key differences between a branch and a representative office are the operating scope and tax treatment.

Limited Companies
A Hong Kong Limited Company allows its owner to take advantage of all the tax benefits and concessions available to a fully incorporated business. Most notably, Hong Kong-based companies can benefit from the free trade agreement with Mainland China known as the Closer Economic Partnership Arrangement (or ‘CEPA’), which provides preferential trading terms. In addition, CEPA-qualified companies are eligible for preferential access to Mainland China markets across a wide range of service sectors.