Hong Kong is a metropolitan area and special administrative region of the People's Republic of China. It maintains separate governing and economic systems from that of mainland China. It is one of the world's most significant financial centers and commercial ports. Hong Kong has a highly developed economy, and, mainly thanks to its geographical position, it is a strategic gateway to growing Mainland China markets. It is an attractive place for investors to start their businesses.
The official languages in Hong Kong are Chinese and English, and the currency used is the Hong Kong dollar (HK$).
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
What is a Sole Proprietorship in Hong Kong
A business formed, owned, and run by one person is considered a sole proprietorship. It is sometimes referred to as a sole trader. The owner is a self-employed individual, and the two are not legally separated. The owner's liability is unlimited as they are responsible for all assets and debts of the business. A sole proprietorship is a small business, more flexible to its changing environment than big companies. This form is often chosen by persons who wish to engage in business alone.
Registration process in Hong Kong
Any form of trade, commerce, and craftsmanship must be registered with the authorities. Sole proprietor's registration in Hong Kong is done with the Inland Revenue Department's Business Registration Office. A business should be registered within one month from its date of commencement. IRD will not accept any applications for registration of businesses that have never existed or have yet to commence operation.
Before registration, first, you need to name your business. There are three choices:
- to register a Chinese name only;
- to register an English name only;
- To register a name in both Chinese and English.
To register your business, you should prepare the following documents:
Fee and Levy
After you have filled the application form, you should pay the business registration fee and levy. The fee for one year is HK$ 2000, and the levy costs HK$ 250. Here you can find the complete pricing. You may choose between one and three years of registration validity. Check this link for information on payment methods.
If you are a resident, you should prepare a copy of your Hong Kong identity card. If you aren't a Hong Kong resident, you will need a copy of your passport or identity card issued by the relevant government authority.
Non-residents of Hong Kong have to appoint a resident individual as their agent for the purposes of business registration. In this case, you should fill out and submit the form IRBR177. You will need the resident's Hong Kong identity card number and residential address. A copy of their Hong Kong identity card must also be attached to the application.
You can submit in person to the Business Registration Office at 4/F Revenue Tower, 5 Gloucester Road, Wan Chai, Hong Kong. The registration should take up to 30 minutes. You can also register a sole proprietorship online. There is a complete guide on how to do it here. In this case, your application will be processed in around two days. Either way, you will receive your Business Registration Certificate.
You can choose the certificate validity duration. The certificate can be valid for one or three years, after which it should be renewed.