How to Set Up an Entity in Hong Kong

Hong Kong is a popular base for foreign companies because of its simple tax system, common-law legal framework, and straightforward incorporation process. A private company limited by shares (a “Hong Kong limited company”) lets you hire locally, sign contracts, and own assets while limiting shareholder liability. This guide gives a streamlined overview of what “opening an entity” means in Hong Kong, the main company requirements, how to register, and what you must do after incorporation.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What does “opening an entity” mean in Hong Kong?

Opening an entity in Hong Kong means creating a locally registered legal entity, usually a private company limited by shares. This company is separate from its owners, can enter into contracts, employ staff, and own property, and is registered with the Companies Registry and the Inland Revenue Department. Incorporation also generates a Business Registration Certificate, which acts as the company’s tax identity.

Entity overview in Hong Kong

Step-by-step guide: How to open an entity in Hong Kong

Step 1: Choosing the Right Structure

Most foreign businesses that plan to trade or hire staff in Hong Kong use a private limited company. This gives limited liability, a clear structure for ownership and governance, and a standalone legal entity for contracts and employment. Alternatives such as a branch office or representative office are occasionally used but are less flexible: a branch is not a separate legal entity from the foreign parent, and a representative office cannot engage in profit-making activities. For a typical operating presence with employees, a new Hong Kong company is usually the most practical choice.

Step 2: Verify business name availability

You must choose a unique company name in English, Chinese, or both. Certain regulated words, such as those suggesting banking or insurance, may require special approval or licensing. You do not need a separate name reservation step if you file online, but it is sensible to check availability through the Companies Registry’s search tools before submitting your application.

Step 3: Prepare incorporation documents

To incorporate, you complete the Form NNC1 incorporation form (for a company limited by shares), which records the company name, registered address, share capital details, business nature, directors, shareholders, and company secretary. You also adopt Articles of Association, which set out governance rules; most small companies use the standard form with minor or no changes. At the same time, apply for business registration with the Inland Revenue Department so the company receives its Business Registration Certificate. You will need identification and address details for all directors and shareholders, the local registered address, and the company secretary’s particulars. These documents can be prepared and signed electronically or on paper.

Step 4: Filing with the Companies Registry

Once the forms and Articles are ready, you submit them to the Companies Registry either online or on paper. At the same time, you pay the incorporation fee and the initial business registration fee. The Registry reviews the documents, and if everything is in order, issues a Certificate of Incorporation and a Business Registration Certificate. For online filings this can happen very quickly; paper filings take a few working days. The Certificate of Incorporation confirms the existence of your company, while the Business Registration Certificate serves as proof of tax registration and must be displayed at the registered office.

Step 5: Tax Registration and MPF Setup

The business registration process doubles as tax registration, so once your Business Registration Certificate is issued you already have your business registration number, which functions as the company’s tax identifier.

If you plan to hire employees, you also need to prepare for Mandatory Provident Fund (MPF) obligations. Employers are generally required to enroll eligible employees in an MPF scheme within 60 days of employment. Employers contribute a percentage of each employee’s monthly income up to a capped amount, with a matching contribution from employees.

Step 6: Opening a Corporate Bank Account

In practice, you will usually want a Hong Kong corporate bank account to handle payroll and local expenses, even though it is not a legal requirement for incorporation itself. Banks will generally ask for the incorporation documents, Articles of Association, proof of the registered address, and identification and address evidence for directors, major shareholders, and authorized signatories. They will also want information on the nature of your business and expected transaction patterns as part of anti-money-laundering checks. Some banks require in-person meetings, while others may accept video verification. Approval times vary from bank to bank.

Step 7: Set up payroll and employment compliance

Once your company and bank account are in place, you can hire staff and set up payroll. Payroll must reflect contractual wages, any allowances, and MPF contributions from both employer and employee. Employers in Hong Kong do not normally withhold income tax from salaries; employees file their own tax returns, but you must still report employee remuneration to the Inland Revenue Department each year. You should issue itemized payslips, keep reliable records, and make MPF contributions on time. Employment relationships are governed mainly by the Employment Ordinance. In practice this means respecting the statutory minimum wage, granting statutory holidays and annual leave, following rules on sick leave, maternity and paternity leave, and paying severance or long service benefits when required. Every employer must also hold employees’ compensation insurance to cover work-related injuries and must comply with occupational safety and anti-discrimination laws.

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Post-registration obligations

After incorporation, companies in Hong Kong must stay compliant with local corporate, tax, and employment rules to avoid penalties and disruptions. Typical requirements include:

Tax and financial reporting: Hong Kong companies must file an annual Profits Tax Return with the Inland Revenue Department (IRD), generally together with audited financial statements and a tax computation. Directors must approve the audited accounts at an Annual General Meeting (AGM) or by written resolution each year. Employers must also file annual Employer’s Returns (e.g. IR56B) reporting employees’ remuneration, and submit departure/cessation forms (IR56F/IR56G) within 1 month when employees leave or depart Hong Kong. Even if the company has no profit, it must still file the Profits Tax Return (unless formally dormant).

Corporate registers: Maintain statutory registers at the registered office or a designated place, including the Register of Members, Register of Directors, Register of Company Secretaries, and the Significant Controllers Register (SCR). The SCR records individuals or entities with significant control (typically more than 25% shareholding or significant influence) and must be kept up to date and available for inspection. Any changes in directors, secretary, or registered office address must be filed with the Companies Registry using the prescribed forms (e.g. Form ND2A for director/secretary changes) within the usual 15-day deadlines. In addition, an Annual Return (Form NAR1) must be filed each year to update the Registry on shareholders, directors, and other key particulars.

Compliance tracking: Because Hong Kong has multiple annual deadlines, companies should use a compliance calendar or automated reminder system to track due dates and avoid late filing penalties or prosecution.

Licenses and renewals: Most ordinary trading or service businesses in Hong Kong do not require a general business licence beyond Business Registration. The Business Registration Certificate (BRC) itself must also be renewed annually (or every 3 years for a 3-year certificate), and the valid BRC should be displayed at the business premises.

Recordkeeping: Under the Companies Ordinance and IRD rules, companies must maintain proper accounting records that sufficiently explain their transactions and financial position. Documents such as ledgers, invoices, receipts, bank statements, and payroll records must generally be retained for at least 7 years. Records can be kept electronically.

Employment law compliance: Once you have employees, you must comply on an ongoing basis with the Employment Ordinance and related labour laws. Key obligations include paying wages on time, providing pay slips, granting statutory holidays and leave, and ensuring at least one rest day in every 7 days where required. Employers must also make timely Mandatory Provident Fund (MPF) contributions each month for eligible employees, submit IR56F/IR56G forms when employees leave, and maintain a safe workplace in line with occupational safety rules.

Taxes and financial considerations

When operating a Hong Kong entity, you must manage several ongoing tax and accounting obligations:

Corporate income tax: Hong Kong levies Profits Tax on income arising in or derived from Hong Kong. A newly incorporated company typically receives its first Profits Tax Return about 18 months after incorporation, giving time to set a financial year-end and prepare first accounts. For each year of assessment, the company must file its Profits Tax Return with audited financial statements and a tax computation, even if it makes a loss or has no profit. Dormant companies with no accounting transactions can obtain dormancy status and be exempted from preparing audited accounts.

VAT: Hong Kong does not impose VAT or GST.

Payroll and social contributions: Hong Kong does not have a pay-as-you-earn payroll tax withholding system or a European-style social security tax. Employees are responsible for filing and paying their own Salaries Tax. The employer’s main tax-related duties are to file annual Employer’s Returns (e.g. IR56B) detailing employees’ remuneration, submit IR56F/IR56G for departing or emigrating employees, and make timely monthly MPF contributions.

Accounting standards: Companies must maintain proper books and prepare annual financial statements in accordance with applicable Hong Kong accounting standards, and these accounts must be audited by a Hong Kong certified public accountant (CPA).

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into Colombia—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Hong Kong?
If documents are ready, online incorporation is very fast: many companies are set up same day or within 1–3 working days via the Companies Registry e-Registry. Paper filings take a few days. The slower part is usually bank account opening, which can add extra days or weeks.

What is the minimum capital required for a Hong Kong company?
There is no legal minimum paid-up capital. You can incorporate with HK$1.

Can foreign companies own 100% of a Hong Kong entity?
Yes. Hong Kong permits 100% foreign ownership. A foreign individual or company can be the sole shareholder, and all directors can be non-residents. There is no local shareholder requirement.

Do I need a local director or representative?
You must have at least one individual director, but they do not need to be based in Hong Kong. Many companies have only foreign directors. What is mandatory is a Hong Kong company secretary and a local registered address (often provided by a corporate services firm).

Can I hire employees before the entity is fully registered?
You cannot run your own Hong Kong payroll until the company is incorporated, business registration is issued, and payroll/MPF arrangements are in place. However, you can hire earlier by using an Employer of Record (EOR) such as Deel. The EOR becomes the local legal employer and handles payroll, MPF, and compliance. This lets you operate in Hong Kong while entity setup is still in progress.

Can Deel help me open an entity in Hong Kong?
Yes. Deel Entity Setup can manage incorporation with the Companies Registry, business registration, and initial compliance steps in Hong Kong. Local experts and partners handle forms, filings, and timelines, while you confirm key decisions (directors, share structure, bank choice, etc.), reducing the need to coordinate multiple local providers yourself.

Can I switch from Deel’s EOR to my own Hong Kong entity later?
Yes. Many companies start with Deel’s EOR for speed, then transition employees onto their own entity once it’s live and payroll is ready.