Foreign Company Registration Options in Hong Kong

A subsidiary is essentially a private limited company incorporated in Hong Kong. Hong Kong allows 100% foreign ownership of companies, which implies that you can set up a wholly-owned subsidiary company in Hong Kong.

Setting up a subsidiary is the most common and preferred option for most foreign companies, as it provides limited liability and numerous tax advantages. A subsidiary is a separate legal entity from its foreign parent company therefore the liabilities of the subsidiary company do not extend to the parent company. Additionally, locally incorporated companies can gain preferential access to the Mainland China markets and benefit from the free trade agreement with China.

The basic requirements for registering a subsidiary company are: approval of company name, local registered address, at least one director and shareholder, a local resident company secretary and an auditor. The company must have share capital but there is no minimum requirement. For taxation purposes, a subsidiary is treated as a Hong Kong resident company and is eligible for tax exemptions and incentives applicable to local companies.

For a complete guide on setting up a subsidiary company in Hong Kong, refer to Hong Kong Subsidiary Registration guide.

A branch office like a subsidiary is a legally incorporated entity except that a branch office is treated as an extension of the foreign parent company and is not a separate legal entity in its own right. This makes the foreign parent company accountable and responsible for all the debts and liabilities of the branch office. Like a subsidiary company, a branch office must be registered with the Hong Kong’s Companies Registry.

The basic requirements to set up a branch office are: company name approval, a local resident authorized representative and an established place of business in Hong Kong. Generally, branch offices are subject to the same legal and tax consequences as companies incorporated in Hong Kong. Branch offices have to adhere to the ongoing compliance requirements like filing annual returns, filing tax returns and are required to execute other public disclosure requirements.

For a complete guide on registering a branch office in Hong Kong, refer to Hong Kong Branch Office Registration guide. 

Foreign companies that wish to gain market insight, exposure and a better understanding of the Hong Kong business environment before setting up a full-fledged office can opt for establishing a representative office first. A representative office cannot engage in profit making activities and is not treated as a legal entity. It cannot sign or enter into any contracts, sign deals on behalf of the company, raise invoices or letters of credit nor engage in trading activities. The representative office has to restrict itself to promotion and liaison activities, undertaking market research and co-ordinating activities on behalf of the parent company.

Since a representative office has no legal standing, the parent company bears implicit liability for its activities. A representative office usually has foreign managerial personnel and locally appointed support staff. There are no registration requirements with the Companies Registry, no minimum capital requirements and no compliances like filing tax returns nor maintaining accounts etc. The only requirement is to register with the Inland Revenue Department and obtain a Business Registration Certificate.

For a complete guide on registering a representative office in Hong Kong, refer to Hong Kong Representative Office Registration guide.