The real estate industry has been playing a major role in Hong Kong s economy over the last decade. The demand for commercial and residential property has been intensifying owing to a large expatriate population, new business formations, and higher consumer purchasing power. Residential property has emerged as a popular investment vehicle in Hong Kong as it generates a high rental yield and tends to appreciate in value. There is also a strong demand for commercial real estate underpinned by the inflow of foreign business firms that are setting up operations in Hong Kong.

Property consultants anticipate a 10% rise in residential property prices and retail rents during the second half of 2010 owing to a low interest rate environment and robust demand. A sizzling property market ensures a sustained demand for realtors. Given the lucrative business potential of operating a real estate agency in Hong Kong, an increasing number of professionals and entrepreneurs are choosing to build their career and business in real estate.

Hong Kong law stipulates that all real estate agencies and individual property agents be licensed prior to commencing business operations.

This guide provides an overview of the key licensing requirements for setting up a real estate agency in Hong Kong.

Who needs to apply for an Estate Agent s License?

• According to the Hong Kong Estate Agents Ordinance, individuals, companies, partnerships, or sole-proprietorships that are engaged in estate agency work in the course of their business or employment in Hong Kong must hold a valid Estate Agent’s License or Salesperson’s Licence.
• Individuals who are issued with an Estate Agent s license can carry out estate agency work in the capacity of a sole proprietor, a partner of a partnership, a director of a company or an employee of another licensed estate agent.
• If the real estate business is set up as partnership, at least one partner is required to hold a valid Estate Agent’s Licence.
• Every real estate agency is required to appoint a manager who holds a valid Estate Agent s License to effectively manage its operations.
• The real estate agency must obtain a Statement of Particulars of Business in addition to the Estate Agent s License.
• An individual who has been issued with a Salesperson s License can only perform estate agency work as an employee of a licensed estate agent.

License Pre-requisites

For individual applicants:

In order to qualify for the Estate Agent s License or Salesperson s License, an individual must satisfy the following criteria:

• Age:The applicant must at least be 18 years of age at the time of making the application;
• Educational Qualifications: At the time of making the application, the applicant should have completed a Form V (i.e. secondary education) educational level or its equivalent;
• Industry Examination: It is mandatory for the applicant to have passed the relevant qualifying industry examination in the 12 months preceding the date of application. Note that there are two different qualifying examinations – Estate Agents Qualifying Examination (EAQE) and Salespersons Qualifying Examination (SQE). Individuals who pass the EAQE can either apply for an Estate Agent s License or a Salesperson s Licence. However, candidates who pass the SQE can only apply for a Salesperson s Licence and not an Estate Agent s License.
• Fit and proper criteria: The applicant must fulfill the fit and proper criteria such as:
  • Must not be an un-discharged bankrupt;
  • Must not possess criminal records involving fraud or dishonesty;
  • Must not have previous track record of complaints or convictions;
  • Must not be of unsound mind; and
  • Must not have been the director or officer of a company that was disqualified from holding an Estate Agent s License.

For corporate applicants:

In order to qualify for the Estate Agent s License, a company must satisfy the following criteria:

• The company must be a incorporated in Hong Kong. For details, refer to Hong Kong Company Incorporation Guide;
• At least one director of the company must hold a valid Estate Agent s License;
• The company must appoint a licensed estate agent to manage the business;
• The directors of the company must fulfill the fit and proper criteria such as:
  • Must not be an un-discharged bankrupt;
  • Must not possess criminal records involving fraud or dishonesty;
  • Must not have previous track record of complaints or convictions;
  • Must not be of unsound mind; and
  • Must not have been the director or officer of a company that was disqualified from holding an Estate Agent s License.

License Application Procedure

The application procedure for obtaining an Estate Agent s License or Salesperson s License involves submitting the relevant documents along with the license fee to the Estate Agents Authority of Hong Kong (EAA). A successful application is usually processed within 10 working days and a license is issued thereafter.

Documents Required:

For individuals applying for Estate Agent s License or Salesperson s License:

• Estate Agent s License application form for individuals, or Salesperson s License application form;
• Documentary evidence of applicant s educational qualifications;
• Documentary proof of passing a Qualifying Examination for Salespersons or a Qualifying Examination for Estate Agents; and
• Applicant s Hong Kong Identity Card or travel document.

For companies applying for Estate Agent s License:

• Estate Agent s License application form for companies;
• Application for Statement of Particulars of Business ;
• Company s Incorporation Certificate issued by the Companies Registry;
• Company s Business Registration Certificate issued by the Inland Revenue Department;
• Documentary evidence detailing the Board of Directors, such as latest Annual Return of the company or Incorporation Form or Notification of first Secretary and Director;
• Documentary evidence showing the registered address of the company, such as latest Annual Return or Notification of situation of registered office;
• Notification of changes of secretary and directors (if applicable); and
• Valid Business registration Certificate for corporate directors of the company.

License Fees

Depending upon the type of license and validity period of each license the following fees will apply:

• Estate Agent’s License for Individuals: HK$2,010 (1-year period) or HK$3,930 (2-year period);
• Estate Agent’s License for companies / partnerships / sole-proprietorships: HK$2,800 (1-year period) or HK$5,460 (2-year period);
• Salesperson’s License: HK$1,280 (1-year period) or HK$2,510 (2-year period);
• Statement of Particulars of Business: HK$2,120 (1-year period) or HK$4,140(2-year period).

License Renewal

The Estate Agent s License, Salesperson s License and Statement of Particulars of Business is usually valid for a one-year or two-year period and must be renewed thereafter. The renewal procedure involves submitting an appropriate renewal form together with the stipulated renewal fee to the Estate Agents Authority at least one month prior to the license expiry date. It normally takes 10 working days to process renewal applications.

Final Thoughts

Although obtaining an Estate Agent s License in Hong Kong is relatively simple and straightforward you are advised to engage the services of a professional service firm as it will ensure that you have the correct documentation in place and are compliant with all the legal requirements. Moreover, by engaging a service provider you can save on time and resources and obtain your license with ease.