Doing business in Hong Kong

Hong Kong keeps the common law under the Basic Law, with key business statutes including the Companies Ordinance (Cap. 622), the Inland Revenue Ordinance, the Employment Ordinance (Cap. 57) and the Arbitration Ordinance (Cap. 609). The Companies Registry handles incorporation and registration of non-Hong Kong companies, the Inland Revenue Department runs business registration and profits tax, the Hong Kong Monetary Authority supervises banks and the currency link, and the Labour Department and the Mandatory Provident Fund Schemes Authority oversee employment and retirement contributions.

Key facts

Profits tax (corporations)

8.25% on first HK$2m, 16.5% above

VAT / GST

None

Main entity form

Private company limited by shares (at least one natural person director)

Foreign ownership and directors

Non-residents may be directors; no minimum paid-up capital

Currency

Hong Kong dollar linked to US dollar (7.75 to 7.85); no exchange controls

Global minimum tax

15% for groups with EUR 750m+ revenue, from 2025

New York Convention

Hong Kong awards enforceable in all Convention states

Statutory minimum wage

HK$43.1 per hour from 1 May 2026

Non-residents can incorporate and direct a local company, and no minimum paid-up capital applies. The usual choices are a private limited company, a registered branch of the foreign company, or a representative office for non-trading market exploration. Every Hong Kong company must keep a register of its significant controllers.

Key facts

• A private company needs at least one director who is a natural person and a company secretary; directors can be non-residents, but an individual company secretary must ordinarily live in Hong Kong.

• There is no statutory minimum paid-up capital, although licensed sectors may set their own capital rules.

• A foreign company that sets up a place of business in Hong Kong must register as a non-Hong Kong company within one month and appoint an authorised representative.

• The Significant Controllers Register (25% test) is not public but must be produced to law enforcement on demand, and a designated representative must be appointed.

Who handles this in Hong KongSetting up and running a companyContracts and commercial law

Hong Kong taxes business profits on a territorial basis at two-tiered rates and has no VAT, sales tax or withholding tax on dividends and interest. Royalties paid to non-residents are a key exception, as the payer must deduct tax. Large groups face the 15% global minimum tax, and transfer pricing documentation applies above size thresholds.

Key facts

• Corporations pay 8.25% on the first HK$2 million of assessable profits and 16.5% above that.

• Only Hong Kong-sourced profits are taxed, so where profits arise is a central question for any structure.

• There is no VAT and no withholding on dividends or interest, but tax must be deducted from royalties paid to non-residents for the use of IP in Hong Kong.

• The income inclusion rule and Hong Kong minimum top-up tax apply from fiscal years starting 1 January 2025 for groups with EUR 750 million or more of revenue; the undertaxed profits rule is not yet in effect.

• Master and local files are needed unless an entity meets two of three size tests, and are due within 9 months of the year end.

Who handles this in Hong KongTax and structuring · Yvonne ChowAccounting and annual filings

The Employment Ordinance sets baseline entitlements, most of which depend on a continuous contract, a test that changed in January 2026. Employers must enrol staff in the Mandatory Provident Fund and pay the statutory minimum wage. Foreign professionals usually enter under the General Employment Policy.

Key facts

• The statutory minimum wage is HK$43.1 per hour from 1 May 2026.

• MPF contributions are 5% each from employer and employee, with income capped at HK$30,000 a month.

• A continuous contract now needs four weeks' service and 17 hours a week or 68 hours over four weeks.

• Severance needs 24 months' service and long service payment 5 years; since 1 May 2025 these can no longer be offset against employer MPF contributions.

• Work visas for professionals require a genuine post that cannot readily be filled locally and market-level pay.

Who handles this in Hong KongEmployment, payroll and immigration

Most trading and services businesses need only business registration, but specific activities are licensed by sector regulators. The Companies Registry licenses trust or company service providers and money lenders. Government schemes target investors and talent rather than offering broad tax holidays.

Key facts

• Company service providers must hold a licence from the Registrar of Companies.

• Money lenders are licensed and supervised by the Companies Registry.

• A representative office cannot trade and must convert once it creates legal obligations.

• The New Capital Investment Entrant Scheme requires at least HK$30 million in permissible investments.

Who handles this in Hong KongLicences, permits and regulators

The Hong Kong dollar is linked to the US dollar within a narrow band, and there are no foreign exchange controls on moving money in or out. In practice the main hurdle is bank onboarding, as banks apply statutory customer due diligence and often their own group requirements.

Key facts

• The Hong Kong dollar trades within HK$7.75 to 7.85 per US dollar under the Linked Exchange Rate System.

• There are no foreign exchange controls, so dividends and capital can generally be repatriated freely.

• Banks must carry out customer due diligence under Cap. 615, and requirements vary between banks.

Who handles this in Hong KongBanking and capitalPayments and currency

Hong Kong levies duty on four categories of dutiable commodities, which also need licences. Every import and export shipment still needs a trade statement. CEPA gives qualifying Hong Kong-origin goods zero-tariff access to the Mainland.

Key facts

• Duty applies to liquors, tobacco, certain hydrocarbon oil and methyl alcohol, which also need import, export or manufacturing licences.

• An import or export statement is required for every shipment.

• Hong Kong-origin goods qualify for zero Mainland tariffs under CEPA if each consignment carries a Certificate of Hong Kong Origin.

Who handles this in Hong KongCustoms, trade and export controls

This topic was written by AI from general knowledge and is being checked against official sources. Confirm anything you plan to rely on with a qualified local professional.

6 statements on rates, thresholds or deadlines are held back until they are checked against an official source.

Who handles this in Hong KongData protection and cyber

Hong Kong runs its own IP registries, separate from the Mainland, through the Intellectual Property Department. Trade marks, patents and designs need local registration, while copyright arises automatically. Protection obtained in the Mainland does not cover Hong Kong.

Key facts

• Trade marks, patents and designs must be registered locally for statutory protection; copyright and trade secrets need no registration.

• A trade mark application costs HK$2,000 for one class and can be filed online.

• Hong Kong has three types of patent: the standard patent (O), the standard patent (R) and the short-term patent.

Who handles this in Hong KongTrade marks, patents and brands

Hong Kong's Competition Ordinance is enforced by the Competition Commission through the Competition Tribunal, with the Communications Authority sharing jurisdiction in telecoms and broadcasting. Takeovers of public companies follow the SFC's Takeovers Code. There is no general foreign investment screening regime confirmed.

Key facts

• The Competition Commission enforces the Competition Ordinance by bringing cases before the Competition Tribunal.

• Telecoms and broadcasting conduct is overseen jointly with the Communications Authority.

• Public company takeovers are governed by the SFC Codes on Takeovers and Mergers and Share Buy-backs, last updated 29 September 2023.

Who handles this in Hong KongBuying, selling and investing · Yvonne ChowContracts and commercial law

Hong Kong's anti-corruption law reaches private sector bribery as well as public officials and is enforced by the ICAC. AML/CFT obligations under Cap. 615 apply to banks and designated businesses, with the Companies Registry supervising company service providers and money lenders.

Key facts

• Employees and other agents commit an offence by accepting an advantage without their principal's permission.

• Company service providers are supervised for customer due diligence and record-keeping compliance under Cap. 615.

• AML/CFT policy is coordinated by a committee chaired by the Financial Secretary.

Who handles this in Hong KongAnti-bribery, sanctions and compliance

Hong Kong is a common law jurisdiction with a Model Law arbitration statute and close arbitration links to the Mainland. Hong Kong awards are enforceable across New York Convention states and, under separate arrangements, in the Mainland and Macao. Parties in Hong Kong-seated arbitrations can seek interim measures from Mainland courts.

Key facts

• The Arbitration Ordinance (Cap. 609) follows the UNCITRAL Model Law and limits court intervention.

• Hong Kong awards are enforceable in all New York Convention states and in the Mainland under a 1999 arrangement updated in 2021.

• Parties to Hong Kong-seated institutional arbitrations can apply to Mainland courts for preservation measures.

• Third party funding and outcome-related fee structures are permitted for arbitration.

Who handles this in Hong KongDisputes and arbitrationContracts and commercial law