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Most businesses in the UK are always on the lookout for opportunities to grow their enterprises. To grow a business into the multinational of your dreams, one of the key steps is registering it in an offshore jurisdiction, and Hong Kong is a great option.
This article is a dedicated guide for UK business people considering investing in Hong Kong. We’ll tell you all about the benefits of taking your business to Hong Kong and provide a step-by-step guide to registering a company on the island.
The Hong Kong economy demonstrates a jurisdiction that investors can count on to grow not just locally, but regionally and globally too. Below are some figures that you should know when preparing to invest in Hong Kong:
Incorporating a company in Hong Kong comes with many advantages that no business should want to miss out on. Here are the top six benefits to look forward to when taking your business to Hong Kong.
The first step of expanding a company offshore is business registration, but the process can sometimes be very complex. For example, some jurisdictions require investors to deal with multiple departments and the process can also take a lot of time. However, Hong Kong is different.
The process of company registration in Hong Kong is outlined in the Companies Ordinance. Here you can see all the required documents, where to file them, and the required fees. Simply put, registering a company is straightforward and devoid of any unnecessary bureaucracy.
Another awesome area that should persuade you to expand offshore to Hong Kong is its impressive global competitiveness performance. Taking a closer look at the 2019 Global Competitiveness Report (GCR) by the World Economic Forum, Hong Kong was ranked third with a score of 83.1 while the UK came ninth with 81.2.
Unlike many jurisdictions that require foreigners to physically fly to their jurisdictions for company registration, Hong Kong is different. You can register a company with the help of an agency, meaning that you do not have to fly there. All you need is to find a good agency, provide your details and the professionals will complete the process on your behalf.
For years, Hong Kong has been a renowned international business hub because of its outstanding pro-business policies. Unlike some places that are fighting the label of being tax havens, Hong Kong is known as a low tax jurisdiction. It is also committed to international standards on tax information and exchanges to curb tax avoidance and fraud.
One of the main concerns among investors when taking their businesses offshore is infrastructural development. If a jurisdiction has a well-developed infrastructure, moving raw materials, finished products and even labour is likely to be cheap and easy. The Hong Kong administration has invested heavily in infrastructural development and most of its systems are in superb condition.
The Hong Kong land and air transport systems are both very efficient. If you want to travel to any of the countries nearby, it will only take a few hours to reach your destination from Hong Kong International Airport. Its ports, road, and rail systems are also made to international standards, helping to keep the cost of doing business low.
Other forms of infrastructure such as internet connectivity, radio, and television networks are also very effective. So, whether you are looking to open an e-commerce company, run aggressive marketing campaigns or link with partners in the jurisdiction, running a company in Hong Kong will be both a very enjoyable and rewarding experience.
Hong Kong is known for its high quality of life. Although it is among the most expensive jurisdictions to live in, the quality of life is incredible. There are many means of public transport in Hong Kong that are affordable, reliable, and safe. Furthermore, the banking, entertainment, health, and education services are also outstanding.
The primary goals of opening a business are building a strong brand and optimising profits. To achieve these targets, you need to consider several points, including the following:
For a business to get started, whether back in the UK or Hong Kong, you need to have enough capital. The moment you decide to open a company in Hong Kong, it is important to start researching how much capital is required. For example, a business in manufacturing might require investments in machinery, raw materials, and marketing, among other expenses.
As your company is launching in a new market in Hong Kong, you should be prepared to meet any expenses before revenue starts flowing and the business becomes sustainable. The rule of thumb is to have enough funds to meet all your expenses for about one year.
Hong Kong is a high-potential market but you should be aware that other businesses are also investing there. This means you should be prepared to face stiff competition. So, how can you outdo your competitors?
As a business person, you should start with market research to try to understand what your competitors are offering. Then, work on providing better products or services so that clients can get high value for money by purchasing from you. You should also focus on building a community around your brand so that clients can identify with it more.
One point to be aware of when doing business in Hong Kong is that customers are very dynamic. Due to the intense competition, it’s important to put a lot of focus on product development. The aim should be to progressively improve your product to sustain high sales and profits.
By thinking about product development during company incorporation, more focus can be directed to understanding what clients need and delivering it in the best way possible. For example, you might want to attract clients by asking them for suggestions on new products. This means that by the time your product is ready for sale, either in Hong Kong or abroad, there will be clients waiting for it.
The moment you decide to expand your business into Hong Kong, it is crucial to start thinking about your entry strategy. If you have a good entry strategy, your business is likely to enjoy high sales and grow rapidly. To develop a good entry strategy, consider working with experts who will help you determine what works and what does not.
For example, you might opt to reach out to clients targeted through online platforms, such as social media and mobile apps, because of the high internet speeds in Hong Kong. You can extend this to collaboration with different stakeholders to build a strong community. If your company deals with food and has a mobile delivery unit, some businesses might want lunch delivered to them every day and you can focus on partnering with them.
You might also want to review the entry strategies used by other successful companies in Hong Kong. Then, consider how to improve upon them to get even better results.
The process of registering a company in Hong Kong can be broken down into the following main steps.
This is the first and most crucial step for UK business people venturing into the Hong Kong market. To decide on the right entity, you should factor in the financial ability and compare the features of each type. Here are the main types of companies you can form in Hong Kong.
The most common type of company formation is a private company limited by shares. The primary advantage of this type of business formation is that it is a separate legal entity, which means that in case of a problem like bankruptcy, no one can come for your assets. Therefore, the steps outlined in this guide are for the registration of a limited liability company.
The next step is picking a name for your company. The business name can be in English or Chinese. Note that although you can use a combination of Chinese and English words in a company name, you cannot combine English and Chinese characters in a single word. You might want to more closely review the Guidelines on Registration of Company Names for Hong Kong Companies.
When setting up a private limited liability company in Hong Kong, you are required to have a clear structure. To be more specific, you need to meet the following requirements:
i) Minimum of one director and an unlimited maximum number.
ii) At least one director must be a natural person.
iii) Other directors can be natural persons or corporations.
iv) Directors can be Hong Kong residents or non-residents.
v) You can also have nominee directors.
i) Can be a minimum of one and a maximum of 50 shareholders.
ii) Can be a natural person or a corporation.
iii) Can be a Hong Kong resident or a non-resident.
iv) 100% ownership is allowed.
v) A sole director can serve as a company director.
C) Company Secretary
i) This position is mandatory according to the Companies Ordinance.
ii) The secretary can be a person or corporation.
iii) If you opt for a person, they must be a resident in Hong Kong.
iv) If you opt for a corporate secretary, the company should be registered in Hong Kong.
Once you select the right company structure, the next step is preparing the required documents and submitting them to the Companies Registry. The documents you must have are as follows:
a) A duly completed company incorporation application form.
b) Articles of association.
c) Copies of passports and proof of residential address for foreign directors and shareholders.
d) Copies of Hong Kong ID cards for Hong Kong resident directors, shareholders, and the company secretary.
Once you submit the documents, it is only a matter of waiting to receive the certificate of incorporation if the application is approved. Once the certificate is issued, you can go ahead and apply for different licenses and permits, where applicable. Note that licenses and permits must be acquired within one month of setting up your firm.
Companies that require additional permits include those in the financial and insurance industries, the education sector, and hospitality. Firms in the travel, telecoms, alcohol, and medical industries in Hong Kong also have to get additional licenses.
Although Hong Kong has put a lot of effort into simplifying the process of registering a company, many investors from the UK still find it challenging. In particular, preparing some of the documents, such as the articles of association and the company structure, is never easy. Besides, registering the company on your own can be expensive because you might be required to make several trips to Hong Kong, run ads in local dailies to recruit a company secretary, and find an office.
The best way to simplify the process of registering a company in Hong Kong is by working with an agency. These are firms of experts that specialise in company registration and are ready to walk you through the entire process. Indeed, the agency you select can do more than just help with company registration, including the following:
Hong Kong is a business paradise, and you should look into expanding your enterprise there. The simplicity of company formation and a supportive administration makes it easy to grow your enterprise. To make the process even faster and more enjoyable, consider working with expert agencies to guide you to success.
With an expert by your side, you can’t go wrong.
Reach out to Hawksford today:
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