Overview

Hong Kong is a Special Administrative Region of the People's Republic of China, and is a business-friendly, accessible and low-tax jurisdiction with links to Asia and the West, and to mainland China. A Hong Kong Limited Company is a popular business structure due to its flexibility and tax advantages.

Use Cases

International Trade and Commerce

Hong Kong is a global financial hub, so it is suited to businesses in import/export or cross-border trade. Companies utilise its proximity to mainland China and other Asian markets, along with its well-established logistics and shipping infrastructure.

Tax Optimization

In Hong Kong only profits sourced from Hong Kong are taxable according to a 2-stage tax rate, so it may be used to minimize tax liabilities for offshore income.

Holding Company or Investment Vehicle

It is suited to hold assets, intellectual property, or shares in other businesses. This is often part of wealth management or structuring international investments.

Gateway to China

Hong Kong remains a strategic entry point for foreign businesses looking to access the Chinese market, thanks to its legal system (based on British common law) and bilingual environment.

E-commerce and Tech Startups

With its business-friendly environment, many e-commerce sellers and tech startups establish a Hong Kong limited company to manage operations, process payments, and benefit from low operational costs.

Fundraising and Capital Access

Hong Kong’s robust financial ecosystem, including its stock exchange (HKEX), attracts companies aiming to raise capital or list publicly, though this applies more to larger entities.

Tax status

Only profits sourced from Hong Kong are taxable, typically at a low corporate tax rate (8.25% on the first HKD 2 million of assessable profits and 16.5% thereafter). Many use it as a base to minimize tax liabilities for offshore income. It will be necessary to prove that revenue is from offshore transactions and the company needs to apply to the Inland Revenue department for ‘offshore status’

Privacy

In Hong Kong the list of directors is publicly visible through the Hong Kong Companies Registry using their Integrated Companies Registry Information System, ICRIS. Only the directors’ names are shown, and no other details. The list of shareholders must also be submitted to the registry, but it is not publicly visible and access to this information is controlled. Hong Kong allows nominee directors and shareholders, offering a degree of privacy, but it is not the obvious jurisdiction where privacy is key .
Onboarding

KYC Verification Process

The Know Your Customer (KYC) process is required in Hong Kong to ensure compliance with anti-money laundering and counter-terrorism financing regulations. Otonomos can take you through all your KYC requirements as your service provider. The KYC process focuses on verifying the identities of individuals or entities involved in your company including:
the directors, at least one natural person must be appointed as a director. There are no residency requirements; The shareholders: A minimum of one shareholder is required, who can be an individual or a corporate entity. The Ultimate Beneficial Owners (UBOs): Individuals who own or control 25% or more of the company’s shares or voting rights. The Company Secretary: Must be a Hong Kong resident (individual or corporate entity). The Designated Representative: A local individual or entity responsible for maintaining the Significant Controllers Register (SCR)

The following documents are typically requested for each individual involved: identification documents such as a passport or Hong Kong ID card. Proof of Address: such as a recent utility bill, bank statement, or driver’s license (dated within the last 3 months) showing the individual’s full name and residential address in English. P.O. Box addresses are not accepted. Further, a resume, CV, or LinkedIn profile may be requested to establish the individual’s background.

For corporate shareholders or UBOs, company documents such as the Certificate of Incorporation, register of directors/shareholders, and proof of ownership structure may be required. For a corporate entity acting as a shareholder or company secretary, additional documents include: the certificate of incorporation, business registration certificate, an organizational chart showing ownership and control structure, and the KYC documents for the entity’s directors and UBOs.

Hong Kong requires that every limited company must maintain a Significant Controllers Register to identify and record individuals or entities with significant control (e.g., those holding more than 25% of shares or voting rights).
The Designated Representative (a local resident or licensed professional) oversees this register and may require KYC documents to verify significant controllers during incorporation or shortly after. The KYC process may be completed in as little as 1–3 days online if all required documents are prepared. Otonomos streamlines KYC by offering digital platforms for document submission and verification, reducing paperwork and time. Non-residents can complete the entire process remotely, provided they appoint a local company secretary and registered office address, which Otonomos can supply.

Entity Maintenance

Renewal Periods

Renewals are annual.

Reporting

The Annual Return (Form NAR1) must be filed annually with the Companies Registry within 42 days of the anniversary of incorporation. There is a fee, with penalties for late renewals. It confirms the corporate particulars already registered, including the address, any changes to the directors’ details since the last filing, share capital, but not a financial statement. It is signed by a director but not notarized. There is a filing fee.

Business Registration Certificate.

This renews annually, or there is an option to have a 3-year renewal period for a higher fee.

Profits Tax Return

this first falls due 18 months after incorporation for the first filing, then annually. Costs for its preparation including accounting and audit costs will vary based on the company's complexity.

Employer’s return form

This reports remuneration details. A company with no employees must return a nil value on the form.

Annual General Meeting (AGM)

There is a requirement for an Annual General Meeting which must be held within 9 months of the end of the accounting period.

Shutting down your Hong Kong Limited Company

There are two common methods: de-registration, the simpler and more commonly used method for private companies that have ceased operations and winding up (liquidation)

The De-registration Process

To qualify for this process, the company must satisfy the following conditions:
It must be solvent, have ceased business operations, have no outstanding liabilities, must not have been involved in any legal proceedings, must have obtained approval from all members, not own any property in Hong Kong, and have settled all tax obligations with the Inland Revenue Department (IRD). If all these are the case then the company should have a board resolution to proceed, have obtained a ‘Notice of No Objection (NNO)’ from the IRD, submitted form NDR1 ("Application for Deregistration of a Private Company or Company Limited by Guarantee") to the Companies Registry, including the NNO, paid the fee of HKD 270. The Registry will advertise the proposed deregistration and wait for three months. If there are no objections a final notice is published and the company is dissolved. This process is typically 5 months.

Winding Up (Liquidation)

If the company has outstanding debts or is insolvent it must go through a process of:
Voluntary Winding Up: Initiated by shareholders or creditors. Requires appointing a liquidator to settle debts and distribute assets. Compulsory Winding Up as ordered by a court, due to insolvency or legal disputes. This is more complex, costly, and time-consuming than deregistration, requiring a lawyer or accountant. In both cases above an insolvency professional is required to manage the process.