Many think that the costs of starting and running a business should be pretty high, actually, it’s not always the case. Hong Kong, apart from being highly ranked for the ease of doing business, offers competitive and straightforward fees for registration and maintenance of small companies.
There are two types of fees incurred by Hong Kong companies:
The fees for incorporating a Hong Kong company limited by shares are:
a. Company registration
Current Hong Kong company registration fee is HK 1,720. If registration is unsuccessful, you’ll receive a refund of HK 1,425.
b. Business Registration (BR) certificate
The BR certificate can be issued for 1 year or 3 years. Hong Kong government provides various incentives for new businesses and one of them is that the fee for a one-year BR certificate for the period from April 2019 to March 2020 has been lowered to only HKD 250. The fee for a three-year certificate remains HK 5,200.
c. Corporate bank account in Hong Kong
The opening itself doesn’t involve any fees, however, most banks in Hong Kong require an initial minimum deposit. We usually recommend to start out with at least HKD 10,000.
Special licenses (if applicable). Luckily, there are no so many businesses that need a special license in Hong Kong, among them, Import & Export, F&B, travel agencies, financial services, educational institutions and some others. For example, in order to setup a restaurant you’ll need a “General Restaurant License” from the Food and Environmental Hygiene Department (FEHD), the cost of which varies from HKD 2,520 to over HKD 120,000, depending on the size of the premises, plus additional licenses to sell liquor, bake bread, etc.
Ongoing yearly costs
a. Business registration renewal
You’ll receive a registration renewal demand note about one month before the anniversary date of your company and will have one month to pay for renewal. The fees for business registration renewal are the same as for initial registration.
b. Company secretary
Your company must have at least one Company Secretary, who should be a local resident or a locally-incorporated company. In case of a sole director/shareholder, the same person cannot be your Company Secretary. The fees vary greatly, so it’s advisable to contact several providers.
c. Office rental
Registered address in Hong Kong is a prerequisite for business registration (P.O. box is not allowed), the fees for which can go from several thousand up to hundreds of thousands of Hong Kong dollars (Everything you need to know about office spaces in Hong Kong).
As an owner of Hong Kong business or an offshore business sourcing profit from Hong Kong, you’ll need to pay profits tax. The profits tax applies to all your corporate profits arisen in or derived from Hong Kong. Its current standard rate is 16.5% with the first 2 million HKD of assessable profits taxed at half the current rate – 8.25%.
Profits tax return is issued by the Hong Kong tax authority (Inland Revenue Department – IRD) the first working day of April of the following year of assessment. The notice for a newly incorporated business is issued around the 18th month after its registration (Important dates for your Hong Kong company).
Every company is required to have their financial statements audited annually by certified public accountant. Auditing fees vary greatly depending on your industry, turnover, number of transactions, etc.
We offer a full range of business registration and annual maintenance services in Hong Kong, including bank account opening, accounting, tax filing, special license registration, etc. Check our Hong Kong company registration packages or contact us for more details.