Business Set-Up In Hong Kong

Business Laws and Regulations for Hong Kong
Hong Kong Companies Ordinance provided by the Department of Justice, Hong Kong SAR Government. Bilingual Laws Information System provided by the Hong Kong Department of Justice, Hong Kong SAR Government
Business structures
Business in Hong Kong can be conducted through limited companies, limited partnerships or by individuals acting as sole traders. To incorporate a company or to set up a business can be done through the appropriate Hong Kong government departments.
Types of businesses in Hong Kong:

• Public limited company. Can offer shares to the general public on the stock exchange. “Limited” means that shareholders potential losses are limited to their share holdings only.
• Private limited company. Provisions are similar to applicable provisions of the Companies Act, 2013 in India. Such companies are not allowed to trade shares on the stock exchange. “Limited” means that shareholders potential losses are limited to their share holdings only.
• Limited partnerships. Two or more partners can form a business. In a Limited partnership” there must be one partner who has unlimited liability for the partnerships’ debts while the other partners’ exposure to debt is limited to their initial investment in the partnership. (Similar to LLP in India)
• Sole trader. Is a single owner who sets up a business and must pay profit tax on that business. The owner is liable for all debts incurred by his/her business.

Taxation
Hong Kong has a very simple system of taxation with low rates making it easy to conduct business. There is no capital gains tax, no tax on dividends, estate duty or inheritance tax, no payroll tax, no VAT tax and no tax on profits derived from outside of Hong Kong. Some indirect taxes such as vehicle registration fees and duties on and liquour are in place.
Trade regulations
Hong Kong has an open door policy on trade and does not charge tariffs on exporting or importing goods. Import and export licencing is kept to a minimum.
Labour laws
Hong Kong’s labour legislation is in line with those of international laws and it has implemented many conventions from the ILO (International Labor Organization). It has legislated policies to facilitate the entry of highly skilled financial professionals. A statutory minimum wage was introduced in May 2011.
Foreign investment
Foreign investment is strongly encouraged. All industry sectors with some exceptions are open to foreign investment and it is not uncommon to have 100% foreign investment in an industry. There is no discrimination between foreign and domestic investors.
Corporate governance

Hong Kong has in place high standards to ensue effective corporate governance. A Draft Code on Corporate Governance Practices and Corporate Governance Report issued by the government in 2004 has become the standard for corporate governance in Hong Kong.

For More details Read our Guide on Doing Business in Hong Kong
Download Presentation on Doing Business in Hong Kong