Corporate Lawyer – 5 Essential Tips when Incorporating a Company in Hong Kong

Corporate Lawyer - 5 Essential Tips when Incorporating a Company in Hong Kong

In one of our previous articles, we explain How to Incorporate a Company or company incorporation into Hong Kong. In this article we provide 5 tips that are essential during this process.

1. Branch or Subsidiary?

It is important that you consider whether you will incorporate a branch or a subsidiary in Hong Kong; the incorporation process differs depending on the type of legal entity, and, in the case of a branch, it becomes much more complicated.

When a foreign company is a partner, shareholder or investor of a local Hong Kong company, it is referred to as a subsidiary. In this case, the company is under the Hong Kong legal framework, so it will have to comply with domestic commercial legislation.

In the case of a branch, the integration process becomes much more complicated; certain permits whose procedures take longer than the respective ones of a subsidiary must be requested. These permits are provided by the Ministry of Development, Industry and Foreign Trade.

2. In which sectors cannot it operate?

When a company is owned by a foreigner, there are some sectors in which it cannot operate. These are:

  • Radio, Television and Publication
  • Cable TV
  • Road transport
  • Air Transport
  • Security
  • Health

3. Company Name

Hong Kong has strict rules regarding company names. The Hong Kong government provides some requirements that the name of the company must include:

Truthfulness: The name of the company must indicate the type of activity and the real objective of the company.

New: The name of the company cannot be similar to that of other companies that are in nearby areas or in similar sectors.

Identification of the legal entity: You must explicitly indicate the type of legal entity that is your company with an abbreviation at the end of the name.

Moral Protection: The words used, like the expression, must be moral. 

4. Investment requirements

In many countries there are minimum amounts of investment to incorporate your business into the legal framework; however, Hong Kong is an exception to this rule. No minimum amount of money is needed to start the company; however, if you want to be eligible to obtain an investor visa in Hong Kong, you must invest an amount equivalent to 150,000 USD.

5. Number of shareholders

It should be noted that to incorporate a company in Hong Kong, at least 2 shareholders are necessary; In the event that these two shareholders do not exist, it will be impossible to incorporate the company into the Hong Kong legal framework. These investors can be both local, as foreigners or as legal entities.

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