Your Financial Life in Hong Kong, Part 7: Owning a Hong Kong Company and Getting a Visa as an Entrepreneur or Investor

This is part 7 in my 8-part guide to your financial life in Hong Kong. It is mostly intended for foreigners living in or moving to Hong Kong looking to better understand “the system” and better manage their money both in and outside of Hong Kong.  Let me know if you have any questions.

Whether you are an entrepreneur, investor, or the spouse or child of an employee, you are likely to find Hong Kong as one of the best and easiest places to incorporate and run a company, and you are likely to find Hong Kong’s immigration department as one of the most rational and efficient in granting visas.

As a reminder, my specialty and business is investing in listed companies, not in giving private company, tax or immigration advice, so please understand the below is for discussion purposes only and is not personal advice.  If you need help setting up a Hong Kong company or applying for a Hong Kong visa, we are happy to refer you to one of our partners that specializes in this area.

Incorporating a Hong Kong Company

It is relatively quick, easy and inexpensive to incorporate a Hong Kong company.  While you can do it yourself, I recommend having a company secretary service company do it for you.  All Hong Kong companies need a company secretary anyway, and their services are generally inexpensive enough that I never recommend anyone try and do that themselves.  Whether you incorporate a brand new company with a name you choose or buy a “shelf company” with an existing name (but no bank account), you should be able to easily walk away with the “green box” containing all your company incorporation documents within a week or two for a cost less than HK$5,000 (US$650).

Opening a Business Bank Account in Hong Kong

The harder and more time consuming part about starting a Hong Kong company is, unfortunately, opening a business bank account.  I have experience opening business bank accounts mostly at HSBC and Citibank, and have found the former slightly faster but more expensive on fees.  Opening a business bank account in Hong Kong can easily take a month or longer, and unfortunately has been getting harder rather than easier, with many banks not wanting to open accounts for new businesses at all.

One reason to open a Hong Kong company with simple ownership (say owned by a few resident individuals) is that opening a business bank account gets far more complicated and difficult for foreign companies or Hong Kong companies with foreign corporate owners.

Opening business bank accounts is a service many company secretary services (including the one we use) provide for a fee.

Business Licensing

While Hong Kong is relatively light and efficient when it comes to regulation, many businesses still require licenses to operate, so it is important to make sure these are on the checklist.

Annual Maintenance Requirements of a Hong Kong Company

Hong Kong companies are required to final an annual return and renew their business registration (BR) certificates annually, which is one of the services company secretaries often provide as part of their annual package.  Many of the company secretaries I’ve seen charge HK$2,000 – 3,000/year depending on what services are needed, and these do not include the fee/levy and filing fees on BR certificates, which tend to be quite small.

Hong Kong companies that make at least $1 of revenue in a tax year are also required to have audited tax returns filed by a professional audit firm (that is, unlike in the US, Hong Kong companies generally can not do their own taxes, no matter how low or simple they may be).  The cheapest CPA firms I have found in Hong Kong charge around HK$7,000 (US$900) per year for audit and tax return services for a very simple company, but others provide additional answers and services for slightly higher fees.  This audit/tax requirement may be one of the highest fixed administrative costs for some start-up companies.

So in summary, assume that at a minimum it will cost you around HK$5,000 (US$650) to start a HK company and about HK$10,000 (US$1,280) per year to keep it alive.

Applying for a Visa as an Entrepreneur or Business Owner in Hong Kong

As mentioned, I do not give immigration advice, but I find it tremendously convenient that dependents of existing visa holders are generally free to work for anyone or start almost any business in Hong Kong as a dependent visa holder.  I do not know of many other jurisdictions where spouses and others on dependent visas have more freedom to accept and change jobs or start businesses than their employed visa sponsors.

Entrepreneurs I’ve spoken with (including myself) generally get employment visas as employees of their own companies, rather than anything resembling an “investor visa”.  Applying for these generally includes submitting a business plan and financials for your business, and Hong Kong immigration wants to see a legitimate plan to run a real business that will benefit the Hong Kong economy and labor market.

Now that we’ve said something about setting up businesses and getting visas in Hong Kong, we will take a break in our next and final post on your financial life in Hong Kong and discuss exploring the rest of the Asia-pacific region, though more from a travel/lifestyle perspective than from an immigration/investment perspective.

Until next time,

Tariq

+852 9476 2868

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