The process for setting up a business and registering it with the government will vary depending on whether you are setting up a sole proprietorship, a partnership, or a corporation. No matter what, however, your first step will be to visit the Business Registration Office. Here you will fill out forms and pay a fee in order to get a Business Registration Certificate. This certificate will then be valid for one year.
If you are registering a sole-proprietorship (you are self-employed) or a partnership you and/or your partners will have to submit identification – either a passport or an ID card - in addition to the required forms.
Limited companies must register with the Companies Registry in Queensway, where the necessary registration paperwork can be completed. For obvious reasons, the processing period for companies lasts longer than that of sole proprietorships or partnerships.
Sample registration forms for all these situations can be found through the Hong Kong Inland Revenue Department.
Depending on the nature of your business, you may also want to check to see if you will require any special licences or permits. The government offers licence information and application assistance through its Business Licence Information Service.
Finally, since Hong Kong is such an enormous business centre, you may want to consider purchasing a ¨shelf company¨ instead of starting one from scratch. Shelf companies are companies that are organized and registered, yet remain inactive. If you decide to pursue this arrangement, you will want to do so with the help of an accountant.
If you need to take out a loan from a Hong Kong bank, you may be disappointed to learn that it can be very difficult to get start-up funds from Hong Kong financial institutions. Many banks only lend against property collateral in Hong Kong itself.
You should therefore have a back-up plan if you are relying on local banks to fund your start-up costs.
Taxes in Hong Kong
Hong Kong has some of the lowest tax rates in the world – and the lowest in Asia. This means that there are numerous deductions from which your business will be able to benefit. Some of the most attractive deductions are costs paid toward the future production of profit (e.g. the purchase of machinery or computers). You will often be able to receive a full tax refund for these expenses.
Whether you are self-employed or the owner of a large company, you will probably want to consult with a major accountancy firm when filing your tax returns. This will ensure that you are able to take maximum advantage of available tax deductions.
The government in Hong Kong is very supportive of local businesses, whether brand new or long-established. This support has increased since the end of British control in 1997, as Hong Kong´s access to the enormous Chinese market has improved. The Trade and Development Council and the Trade and Development Council Business Information Centre are excellent portals to government information and support.
A wealth of information is also available through Invest Hong Kong, another government sponsored organization.
As you're developing your business plan, give our website on expat marketing, ExpatMarketing.com a look. Our marketing insights and strategies are geared specifically toward expats, though many can be applied across industries.