[ESTABLISHING A BUSINESS ENTITY IN HONG KONG]
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ESTABLISHING A BUSINESS ENTITY IN HONG KONG
1. Introduction Hong Kong as an international centre for finance, commerce and trade is often considered as one of the most attractive places to do business owing to its unique advantages such as its prime location, business-friendly policies, simple tax regime, world-class infrastructure, sound legal system and robust regulatory regimes. This Asia’s world city has consistently topped various global rankings in business and economic competitiveness – more recently it ranked the 7 th most competitive economy by the International Institute for Management Development in its World Competitiveness Yearbook 2023, topping the ranking in business legislation and being in the top five positions in tax policy, international investment, international trade and technological infrastructure. This Guide provides a high-level overview of the common types of business entities available in Hong Kong. The information in this Guide is for general guidance only. It is not intended to be comprehensive and should not be relied on or treated as legal or professional advice. Specific legal, tax and other professional advice should be obtained before establishing a business entity in Hong Kong. Unless otherwise indicated, the law and practice is stated as of September 2023. 2. Business Registration The Business Registration Ordinance (Chapter 310 of the Laws of Hong Kong) requires every person who carries on a business (meaning any form of trade, commerce, craftsmanship, profession, calling or other activity carried on for the purpose of gain) in Hong Kong to apply for business registration within 1 month from the date of commencement of the business,
and to display a valid Business Registration Certificate at the place of business. Certain businesses (e.g., the activities of charities) may qualify for exemption from business registration subject to fulfillment of the relevant conditions. Business Registration Certificates are valid for either one year or three years and require renewal before their expiry. Application for Business Registration Certificates or their renewal should be made to the Business Registration Office of the Inland Revenue Department. Business registration is, however, not for regulating businesses. Neither is it a licence to trade. Depending on the types of business, other registration or specific government licences, permits, certificates or approvals may be needed to start business operations in Hong Kong. 3. Types of Business Entities The common types of business entitles in Hong Kong include: 1. Company incorporated in Hong Kong 2. Non-Hong Kong company, which may
operate through: (a) a branch; or (b) a representative office
3. Sole proprietorship 4. Partnerships, including:
(a) General partnership (GP) (b) Limited partnership (LP) (c) Limited liability partnership (LLP)
In recent years, Hong Kong has introduced new types of fund structures such as open-ended fund company (OFC) and limited partnership
ILN Corporate Group – Establishing a Business Entity Series
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