Hong Kong has long attracted entrepreneurs from around the world for company registration and incorporation. This is because the country is renowned for being one of the freest economies in the world. The process of registering a sole proprietorship in Hong Kong is quick and reliable. Here is a list of some of the steps you need to follow while registering your sole proprietorship.
Related Read: What are the types of business entities in Hong Kong? »
Registering a sole proprietorship in Hong Kong
IIn Hong Kong, the process of registering a sole proprietorship is relatively straightforward and reliable. All sole proprietors are required by law to register their company at the Business registration office at the Inland Revenue Department to receive a certificate for the business registration. If at some point, you change some of the particulars of your sole proprietorship, you will also need to notify the Inland Revenue Department of these changes within one month from the time the changes were made.
If you choose to operate more than one sole proprietorship in Hong Kong, each business will be required to have its unique business name and its own Business Registration Certificate. Depending on the validity of the business license you will have taken out for your sole proprietorship, you will be required to renew your Business Registration Certificate one month before the date of expiry.
Once you have registered your sole proprietorship, your Business registration certificate will contain a registration number you will use to file your taxes.
You will also need to select and identify an appropriate business name for your sole proprietorship. After you have selected your business name, you will then be able to apply for registration. Once you have submitted the appropriate documentation, it should generally take one day to be issued with your business registration certificate.
Required documents for registration of your sole proprietorship
To register your sole proprietorship, here is a list of the documents that will be required in Hong Kong:
- An approved company name
- A finished and duly signed incorporation structure
- For residents of Hong Kong, a certified copy of the original identity card
- For foreign investors, a certified copy of the original passport and proof of your latest overseas residential address
- If the owner/all partners/the principal officer is/are not residing in Hong Kong, he/she has/they have to appoint a resident individual as his/her/their agent for the purposes of business registration. In that case, please complete and submit the form IRBR177 or submit an appointment letter stating the full particulars of the agent including his/her name, Hong Kong identity card number and residential address. A copy of his/her Hong Kong identity card must also be attached to the application.
Registering A Sole Proprietorship for Foreigners
If you are a foreigner to move into Hong Kong and start up a sole proprietorship, one of the first things you will need to do will be to apply for an investment visa. However, before applying for an Investment Visa, you will be required to have registered your business. At this juncture, it would be advisable to enlist the services of a professional firm to assist with the process of registering your sole proprietorship within Hong Kong.
To be considered positively for receiving an Investment Visa, you will need to demonstrate that your business will significantly contribute to Hong Kong’s economy during your application. For instance, you may need to provide ample proof that your proposed business will create jobs for Hong Kong citizens. You will also be required to show that your proposed business will utilize local manufacturers and suppliers and employ the services of local service providers.
After Registering A Sole Proprietorship
After successfully registering your sole proprietorship in Hong Kong, the next step will be to apply for a business license. However, the kind of license you will apply for will vary depending on your operating business. For instance, some business activities that need a license could include restaurants, educational institutions, import and export, travel agencies, etc.
After securing a business license for your sole proprietorship, the next step will be to open a business bank account. This step will also be fairly easy, as there is a wide array of banking institutions within Hong Kong that you can choose from. Some of these banking institutions may be virtual bank accounts where all banking processes will be carried out online, or they may be brick and mortar banks that will require your physical presence before opening an account for you.
It would also be advisable to seek out the services of a professional services firm to help you determine the kind of bank that would be appropriate for your business.
Ongoing Compliance After Registering Your Sole Proprietorship
It is a requirement by law in Hong Kong that all sole proprietorships file their profits tax returns annually. However, the law stipulates that their first tax return should be filed within 18 months from the date of incorporation for newly registered sole proprietorships.
- What is a sole proprietorship?
- A sole proprietorship is a business structure that is owned by an individual. There is no legal separation between the company and the owner. The owner is fully responsible for all components of the business entity and all the company finances.
- What are the requirements for selecting a business name for your sole proprietorship?
- As you are selecting a name for your business, here are some of the facts that you will need to take into consideration:
- The name you select for your sole proprietorship could either be English, a Chinese name or a combination
- The name that you select should not be offensive or contain any wording that may imply a link with the government of Hong Kong.
- If the name that you select for your business is Chinese, you will be permitted to use English lettering for it, but not English words
- You will not be permitted to use abbreviations of limited liability partnership (LLP) or limited (Ltd) in your business name
- Why register a sole proprietorship in Hong Kong?
- Compared to other business structures, registration of sole proprietorships in Hong Kong is very straightforward and considerably more manageable. As discussed above, registration involves only one single step of registering the business at the Inland Revenue Department.
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