Hong Kong is the best place for setting up a company!
Hong Kong offers some of the lowest corporate taxes in the Asia Pacific at 16%. The government also does not impose any restrictions on foreign ownership. Finally, entrepreneurs can enjoy unlimited capital gains from remittances outside China.
As an added bonus, you can easily invest your profits abroad. No more worrying about limits imposed by governments elsewhere. However, starting a business in a place you don’t know anything about can be difficult.
Thankfully, we’ve created this short guide, to help walk you through the process! If you want your business to grow like never before then this article’s for you. Read on to learn the best tips and tricks for starting a company in Hong Kong.
Take Your Time Setting up a Company
Setting up a company in Hong Kong can be straightforward and simple when you take your time to do things right. The company registration process is quite easy. You’ll complete it in a matter of minutes. To start, you’ll need to draft the Articles of Association (AOA). The AOA is a legal document.
The AOA identifies the company’s name, registered address, capital, and more. Once you have drafted your AOAs, you will need to submit them for approval from the HK Securities and Futures Commission.
HK Securities and Futures Commission
Next, on our list of tips for how to set up a company, let’s talk about approval timelines. If time is of the essence then consider hiring an expert or company who already has HKSF registration.
You can also speed up your application if you complete the application process through Hong Kong’s own online portal. Next, if needed, transfer your assets to an HKSF authorized CPF account. Sound confusing? Don’t worry.
You can also reach out for help from Hong Kong incorporation agencies/companies.
While many “corporate service providers” or CSPs offer registration services, we recommend checking the accreditation. Always double-check the credentials of any provider, before making your decision. Many corporate service providers will claim they can register your company for an affordable price. However, some don’t have HKSF accreditation.
Without accreditation, they can’t guarantee acceptance of your documents by the HK Securities and Futures Commission (HKSF). These companies also often charge extra fees which far exceed the initial quote provided to clients.
Instead, hold out for reputable agencies that can assist you with the business registration process. When you have proxy agents you can trust, you’ll be able to avoid wasting your money.
Business Registration Timeline
How long does the registration process take? The registration process for a new company takes just over one week. Once you have submitted your documentation to HKSSC, they will notify you in a matter of days.
When they reach out, they’ll let you know whether or not the name of your company is already being used by another entity operating in Hong Kong. If there are no conflicts with existing names, approval should be received within one day after that.
If the prospective company has not been registered anywhere before, it must wait 10 business days from the date it submits its application for AOA approval. The registration process ends once the new entity’s AOA has been approved.
New Company Business Registration Fee
Are there any additional fees when setting up a company? The initial cost to register your company is quite affordable. Nevertheless, additional charges may apply if you decide to appoint a company secretary or have your account audited by an accountant. These costs vary depending on the size and scope of your business and should be discussed with HKSSC when applying for approval.
Hong Kong Limited Liability Company
Why do businesses tend to go for a Hong Kong Limited Liability Company? Limited Liability Companies (LLCs) are attractive because they combine independence with flexibility. The versatility makes them perfect for investors looking to lease property. Investors can also set up holding companies, run their own ventures, make personal investments or even just open a bank account.
Finding the Right Employees
Moving on, you want to make sure you’re hiring the right people for your new company in Hong Kong. There are several steps you can take to make sure the employees you bring on board are trustworthy and capable of handling their responsibilities.
First, start by sharing information about your company with people who know you well and have worked in a similar capacity before. If possible, hold interviews in person when hiring for management positions and limit applicants to potential staff members from your own country if at all possible.
Perfecting the Onboarding Process
Once you find the right teammates, how can you perfect the onboarding process? Instead of struggling with new hire paperwork, we suggest investing in an onboard and software. There’s a lot of different onboarding software companies available.
The right onboarding program can help you streamline the process of training new team members. Another advantage of using software is that you’ll be able to ensure none of the employee’s information slips through the cracks. Information such as an employee’s registration number.
Employer’s Registration Number
Did you finish the recruitment process and onboarding process? Great! Now register each new hire with the Department of Immigration and Registration Authority (DIA). Doing so will allow your staff members access to social benefits.
Registration also makes sure they’re covered under workplace safety regulations. Want to speed things along? Then begin the employer registration number application process online.
Department of Immigration and Registration Authority
The Department of Immigration and Registration Authority (DIA) is a division of the government of Hong Kong. It’s dedicated to regulating immigration, employment, and registration for companies within the region. One of the most important roles of DIA is to ensuring employees have an Employer’s Registration Number (ERN). Why?
Without an ERN employees are unable to access social benefits. No ERN also means employees don’t have protection under certain workplace safety regulations. There are several steps you can take as a business owner when working with the DIA.
First, you must submit all necessary documentation online through their employer registration website. Include information such as your company’s name, and address. Also be sure to include teh registered capital, and a list of your business’s directors and their contact information.
Once the DIA receives all of your company’s documentation, they will provide you with an employer registration number. This process can take a couple of weeks. No worries though, in some cases the application may be expedited.
In order to ensure compliance in accordance with these rules, the DIA regularly conducts inspections of businesses throughout the region including unannounced audits at operation. You will need to renew your ERN every year in order to maintain compliance.
Obtaining Commercial Insurance in Hong Kong
Organizations may require commercial insurance for businesses in Hong Kong. Commercial Property, Liability, Workers Compensation Insurance (WC), and business interruption are common types of policies an organization needs in Hong Kong.
Make sure you purchase your coverage from reputable, national market leaders. The policy should cover the key areas of liability and property damage related to your business operations in Hong Kong. These policies cover you for any losses, damages, or expenses incurred because of an incident that occurs on your premises. Damages due to an event such as a fire, explosion, storm, and so on.
Business interruption insurance is another form of commercial insurance, and you’ll want to have it. A lot of companies consider business interruption when reviewing their options for protecting their business interests abroad. Including those based in Asia Pacific regions like Hong Kong.
There are various unpredictable scenarios that could cause a company financial loss. The loss can be especially devastating if they find themselves shut down by natural causes such as severe weather conditions. To avoid bankruptcy, protect all of your commercial assets with high coverages.
Hong Kong Business Culture
Last but not least, we’d like to leave you with a few insider tips about the Hong Kong business culture. For one, Hong Kong is a very competitive society which can be difficult for newcomers to adjust to. thankfully entrepreneurs, such as yourself can thrive in a competitive atmosphere. The sky’s the limit to where you can take your company!
https://www.mylifeelsewhere.com/cost-of-living/united-states/hong-kong Next, remember the cost of living in Hong Kong is high, especially compared to the United States. If you’re used to a more affordable lifestyle, get ready to downsize or pay up. Lastly, English isn’t widely spoken so make sure you learn some Cantonese before moving there!
Finding Success in Hong Kong
As you can see, it’s important to take your time when setting up a company in Hong Kong. There are many rules and regulations that you have to follow, such as legalizing the onboarding process. Remember, employees, need visas or an employer registration number from the DIA (Department of Immigration and Registration Authority).
Be sure to gather all of the information you’ll need before starting the application process. Next, explore the online application opportunities to speed things up. For more advice to help you thrive, check out another article.