In an era of globalization, Hong Kong has proved to be the perfect place to conduct your business. Over the past one or two decades, Hong Kong has seen a steady rise in the number of people starting their business in their land, both locally and internationally. It can be proud of its international economy, the commendable government support as well as the lucrative tax breaks and advisory offices. Some people see Hong Kong as the perfect gateway to conduct their trading business with China as well. All these make Hong Kong the ideal place to begin your business.
What is the procedure?
You need the government’s help to register and get the permit before you can actually start your operations. The entire process of setting up your business in Hong Kong depends on the type of business you are planning on doing. By that, we mean the process for a sole proprietorship business is completely different to that of a private limited company. And the latter is also different from the process required for a corporation. No matter what kind of business it is, you always have to visit the Business Registration Office as your first step. Over there, you will be asked to fill out a couple of forms and pay a small fee after which you will receive your Business Registration Certificate. The certificate has a validity period of one year after which it requires renewal.
Types of businesses and their requirements
In the event of starting a sole proprietorship (where there is a single owner) or a partnership business (ownership is divided among partners), you and your partners will have to submit your identification in order to register your business. The identification can be in the forms of your passport or national ID cards.
If you want to open a Limited Private company in Hong Kong then requirements are different. For starters, you need to register with the Companies Registry in Queensway. Over there all the necessary paper works will be provided to you and you just need to fill them up and show the required documents. Quite understandably the processing time needed for the limited private company is significantly longer than that of a sole proprietorship or a partnership business.
The Hong Kong Inland Revenue Department has a list of sample registration forms. You can always take a look at them and find out which ones you want to follow and the different requirements for the types of business.
Business Licenses and Permits
As our writing on how to start a business in Hong Kong, there are quite a few types of businesses in Hong Kong which will require you to get a business license or a permit. The government is very willing to award these permits as long as you fulfill their requirements. The Business License Information Service is the government department which will help you regarding this matter.
As we mentioned earlier, Hong Kong is a huge business hub with a large number of companies and business already in play. If you are starting your business abroad for the first time then consider buying one of the “shelve companies” instead of starting something completely new. These companies are basically registered, organized and licensed but are inactive. It will save you quite a considerable amount of time and save you the hassle of running around the government offices.
Getting the capital
While Hong Kong is a great country to conduct your business in, it does have one drawback. If you are looking for the local banks to raise capital for your new business then I’m afraid you are in the wrong country. All the banks and financial institutes in this country are very strict about loaning capital for start-up companies. Only if you have property in Hong Kong you will be allowed the capital. The properties will be used as the collateral. It is very wise and advisable to find a different source of capital for your business before you start your operations.
Taxes in Hong Kong
One of the many reasons as to why one should start a business in Hong Kong is because of their tax options. Compared to the rest of the world, Hong Kong has one of the lowest tax rates. In fact, it is the lowest tax rate in the entire Asian continent. The low tax rate means that your company will be benefiting from numerous deductions that you will be able to fully enjoy. Another great feature about the deduction is the “costs paid toward the future production of profit”. This is applied to the purchase of machinery and/or computers. More often than not you will be able to receive a full tax refund on these purchases.
The government of Hong Kong is very helpful when it comes to conducting your business in the country. They are very supportive of local businesses as well. The Trade and Development Council and the Trade and Development Council Business Information Centre are two of the great portals to government information and support. Another government sponsored organization is the Invest Hong Kong. Over there you will receive a vast amount of knowledge related to how to start a business and all sorts of government support one can enjoy.