The dream of every entrepreneur is nurturing an idea and growing from one level to a global multinational. This growth is only possible if the business is located in the right place. For years, Hong Kong administration has worked hard to establish it as a business and financial hub that provides enterprises with the necessary launching pad for their businesses to become global multinationals.
Whether you are at startup or have been in operation for some time, registering a company in Hong Kong will catapult you and the business to greatness. There are three main reasons why businesses go to Hong Kong.
- Government support: Hong Kong is a business based economy. As an island with little land for agriculture, minerals or other physical resources, the administration sources its revenue from businesses. Therefore, it goes to great length to support businesses to maintain its streams of revenue flowing. Depending on your niche of operation, it is also possible to fit in any of the government supported programs such as the Cyberport Incubation Program, The Design Smart Initiative and Hong Kong Science and Technology Parks Corporation’s Incu-Tech/Incu-Bio Program.
- Ease of doing business: Hong Kong stands tall on ease if doing business in the entire world. From registration of a new business to straightforward taxation regime, every new investor is sure of enjoying operations in Hong Kong. It is because of this that world Bank has consistently ranked Hong Kong on the top of its ease of doing business list for more than a decade.
- Hong Kong is the gateway to the Mainland China and the entire Far East: As an investor, one thing that never fades from the mind is where to get a market for services or products. However, Hong Kong provides a very large market because of its large population and also serves as the main gateway to Mainland China and the Far East. Most of the big businesses operating in the Far East and internationally have their roots back in Hong Kong.
As you start Hong Kong company, there are crucial things you must get right. The government of Hong Kong has established strong institutions to guide every investor at all levels of the establishment.
Registering a company in Hong Kong
To register your company, all the requisite documents and applicable fees must be submitted to the Registrar of Companies for review. The main documents include passports of shareholders and directors, Articles of Association, Memorandum of Understanding, and minutes authorizing the formation of the company.
- A resident company secretary: Hong Kong requires that every new company must have a resident company secretary. This is the link person between the administration and the business. He is also in charge of ensuring that all the laws are followed, and any changes in Hong Kong legislations are effected appropriately.
- A physical office in Hong Kong: To get a certificate of incorporation, you are required to provide proof of a physical office. This is the business location where the government departments can come to inspect, liaise, or follow on various aspects of legal consideration.
- A bank account: Your operations as a business can only commence once you get a bank account. Most banks operating in Hong Kong want to get a personal connection with the business (the secretary, shareholders, and directors) before opening the account. Besides, they also want to know the nature of the business and type of clients you are anticipating to deal with. This is very important to ensure they deal with legitimate businesses to avoid handling proceeds from drugs, crime or terror. It is, therefore, prudent to get the structure of the business right and demonstrate its operations are safe at all levels.
In many cases, registering a business often becomes a lengthy process because the applicant is required to fly to Hong Kong and submit all the documents. However, even making the documents, getting a resident secretary, and a physical office are monumental tasks.
A simpler way of getting your company up fast and running is using experts such as HTV. An agency will help you to craft all the documents professionally, serve as the company secretary, and use its premise as the main offices for about one year. This has been the greatest breakthrough for most companies because owners can even operate without even traveling to Hong Kong.
Always remember to carry due diligence on the agency you select. Make sure that the agency is based in Hong Kong and is run professionally. You might want to look at its past clients’ reports to assess its effectiveness.
Having registered business in Hong Kong, it is now up to you to venture and make most out of the new opportunity. More importantly, you need to understand the tax requirement for the business in order to operate on the right side of the law.
Any entity that carry’s trade in Hong Kong is required to pay 16.5% of its profit in taxes. You have to get this right from the start after incorporating a business in Hong Kong. Start by getting the books right so that every transaction is captured appropriately. Note that the tax is only for transactions that are done in Hong Kong. If all the transactions are done outside Hong Kong, you might qualify for 0% tax. However, it is advisable to seek help from a tax expert on 0% tax for the business.
One thing about Hong Kong is that it encourages businesses to employ the local people. In fact, this is one of the main drivers of its business oriented type of economy. Labor regulations are contained in the Employment Ordinance that guides all aspects of employment.
Under the Employment Ordinance, every business is required to adhere to the following;
- You can only employ foreigners to take positions for skills that are not available in Hong Kong
- The employer must provide a reasonable wage in line with the skills of the employee
- You have to provide rest days, paid annual leave, sickness allowance, maternity protection and termination of employment contract.
- The employer is required to provide a safe working environment for staff and take appropriate insurance cover.
- The maximum working hours in Hong Kong is 8 hours (7 am to 7 pm), 48 hours every week, and 6 days every week.