Hong Kong (HK)
Hong Kong is one of the world's most dynamic cities — a Special Administrative Region (SAR) of China operating under the 'One Country, Two Systems' framework that preserves its common law legal system, independent judiciary, free port status, and separate currency.
Capital: Hong Kong
Region: Asia
Language: Chinese (Cantonese)
Currency: HKD (HK$)
Cost of living: Very expensive (index 90)
Emergency: 999
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Business Setup
Start a business or go freelance in Hong Kong.
🧑💻 Freelancer / Self-Employed Guide
Steps to register:
- 1 1. Determine if you need to register a business or operate as a pure sole proprietor. In Hong Kong, any person carrying on a trade, profession or business in HK must register under the Business Registration Ordinance (Cap. 310).
- 2 2. Register your business name with the Business Registration Office (BRO) at the Inland Revenue Department. Apply online via the e-Business Registration (eBR) system at ird.gov.hk. Choose: your own name (no registration needed as sole trader in some cases) or a trade name (must be registered).
- 3 3. Pay the Business Registration Certificate (BRC) fee: HK$250/year or HK$3,950 for 3 years. Display your BRC prominently at your place of business.
- 4 4. Open a dedicated business bank account. Most banks require your BRC, HKID, company formation documents, and proof of address.
- 5 5. Set up your accounting records. HK Profits Tax requires you to keep proper business accounts for at least 7 years. Use accounting software (Xero, QuickBooks, FreshBooks) from day one.
- 6 6. File your Profits Tax return annually with the IRD. First filing is typically in the tax year after you establish the business. Profits Tax rate for unincorporated businesses: 7.5% on first HK$2M profits, 15% on profits above HK$2M.
- 7 7. There is NO VAT/GST registration in Hong Kong — you do not charge or collect sales tax.
- 8 8. MPF: Self-employed individuals must enrol in an MPF scheme and contribute 5% of relevant income (HK$1,000–1,500/month) by themselves. Both employee and employer portions apply to the sole proprietor. Contributions are tax-deductible up to HK$18,000/year.
- 9 9. Consider forming a private limited company if your profits exceed HK$2M/year, as the corporate rate (8.25%/16.5%) may be lower than the personal income (salaries tax at up to 15% standard rate).
Tax registration
IRD Inland Revenue Department — Business Registration Office. Register at ird.gov.hk/eng/busreg/ or in person at Revenue Tower, Wan Chai. Processing: 1–3 business days online. Business Registration Certificate valid 1 or 3 years, must be renewed before expiry.
VAT threshold
Not applicable — Hong Kong has no VAT, GST or sales tax. No registration or charging of consumption tax is required regardless of turnover level.
Invoicing
Hong Kong has no statutory invoice format requirements beyond general commercial practices. Best practice: include your name and business address, business registration number, client's name and address, invoice date, sequential invoice number, description of services, amount in HKD, payment terms, and your bank account details (account name, account number, bank name, bank code). For cross-border services, include the recipient's jurisdiction for withholding tax purposes if applicable.
Social security
Self-employed individuals in Hong Kong must enrol in an MPF (Mandatory Provident Fund) scheme within 60 days of becoming self-employed. You contribute both the employee (5%) and employer (5%) portions yourself, based on your monthly relevant income (maximum HK$30,000/month, minimum HK$7,100/month for mandatory contributions). MPF contributions are tax-deductible up to HK$18,000/year. There is no compulsory public health insurance, unemployment insurance, or disability income scheme. Private health insurance and life insurance are strongly recommended.
💡 Key Hong Kong advantage: no capital gains tax means profits from selling shares, properties (subject to AVD stamp duty only), or businesses are not taxed by IRD. Income derived outside Hong Kong is generally not subject to HK Profits Tax (territorial source principle) — significant advantage for freelancers with foreign clients. However, if work is performed in HK for foreign clients, that income is still HK-sourced and taxable. Consult a CPA for offshore source claims.
🏢 Business Structures
Sole Proprietorship · Sole Proprietorship (獨資企業)
Self-employed / Sole Trader
None
Min. capital
1–3 working days online via Companies Registry eBR system
Setup time
Liability: Unlimited personal liability
Setup cost: HK$250 Business Registration Certificate (1 year) or HK$3,950 (3 years)
Best for: Freelancers, consultants, sole traders, creative professionals. Simplest structure — no directors, no shareholders, no company accounts required beyond IRD profits tax.
Partnership · General Partnership (合夥企業)
General Partnership
None
Min. capital
1–3 working days registration
Setup time
Liability: Unlimited joint and several personal liability for all partners
Setup cost: HK$250 Business Registration Certificate + legal fees for Partnership Agreement (HK$5,000–20,000 recommended)
Best for: Small professional practices (2–5 partners), early-stage startups, accountants, solicitors, architects. A formal Partnership Agreement is strongly recommended.
Limited Liability Company (Ltd) · Private Company Limited by Shares (私人股份有限公司)
Private Limited Company (Ltd)
HK$1 minimum share capital (no paid-up minimum)
Min. capital
1–3 working days via Companies Registry e-Registry (eNReg)
Setup time
Liability: Limited to company assets — shareholders protected from personal liability
Setup cost: HK$1,720 Companies Registry filing fee + HK$250 Business Registration + ~HK$3,000–8,000 company secretary fees (mandatory)
Best for: Most serious businesses. Profits taxed at 8.25% (first HK$2M) / 16.5% (above HK$2M) — vs 15% standard rate for individuals. Highly regarded internationally. Requires minimum 1 director, 1 shareholder, 1 company secretary (HK resident or body corporate).
Branch Office · Registered Branch of a Foreign Company (境外公司在港分行)
Branch Office
None
Min. capital
2–4 weeks (requires certified copies of parent company documents)
Setup time
Liability: Parent company bears full liability
Setup cost: HK$1,720 registration fee + legal/corporate secretary fees
Best for: Foreign companies expanding into HK operations without creating a separate legal entity. Branch profits subject to HK Profits Tax at 16.5%. Annual return filing required.
Representative Office · Representative Office (代表辦事處)
Representative Office (liaison only)
None
Min. capital
1–2 weeks
Setup time
Liability: Parent company liable
Setup cost: HK$250 Business Registration if registered
Best for: Market research, liaison and promotion activities only — cannot conduct profit-generating activities. No HK Profits Tax on representative activities. Popular for mainland China companies researching the HK market.
Business Setup
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