General
information
Hong Kong is one of the few jurisdictions where a foreign founder can hold 100% of a company, pay 8.25% profits tax on the first HK$2 million of assessable profits, and complete incorporation in one to two working days without ever setting foot in the territory.
It is also — and this matters more in 2026 than it did ten years ago — a fully transparent, common-law jurisdiction that sits on the EU’s white list and is a member of the OECD/G20 Inclusive Framework. Hong Kong is not an offshore zone, and structures built on the assumption that it still behaves like one tend to fail at the bank.
The positive investment environment, the substantial legislative base and a well-developed financial sector make the jurisdiction attractive for holding structures, regional trading operations and family offices. Private Financial Services has been registering and supporting companies since 1997. Below is what setting up a Hong Kong company actually involves today.
Benefits of company formation in Hong Kong
Why entrepreneurs choose Hong Kong
Territorial taxation. Only profits arising in or derived from Hong Kong are chargeable to profits tax. Genuinely foreign-sourced trading profits can fall outside the charge entirely — but the exemption is claimed and proven, never assumed.
Two-tiered profits tax. 8.25% on the first HK$2,000,000 of assessable profits, 16.5% on the balance. Within a group of connected entities, only one company may elect the reduced rate.
No VAT, no GST, no capital gains tax, no withholding tax on dividends. A dividend paid to a non-resident shareholder leaves Hong Kong with nothing deducted. The one outbound payment that is taxed is royalties to non-residents.
No residency requirements for owners or directors. Shareholders and directors may be of any nationality and reside anywhere. A company secretary and a registered office in Hong Kong are, however, mandatory.
A gateway to mainland China and the Greater Bay Area, with an extensive network of comprehensive double taxation agreements covering the Mainland, most of ASEAN and much of Europe.
Currency and capital freedom. The Hong Kong dollar is pegged to the US dollar and there are no exchange controls.
A new route in for existing offshore entities. Since 23 May 2025 an inward re-domiciliation regime allows an eligible foreign-incorporated company to become a Hong Kong company while keeping its legal identity, contracts and corporate history intact.
What Hong Kong Is Not
Hong Kong was removed from the EU’s watchlist of non-cooperative tax jurisdictions on 20 February 2024, after refining its foreign-sourced income exemption regime. That is good news for banking and counterparty diligence — and it is the direct result of Hong Kong tightening the rules that once made it attractive as a quiet jurisdiction. Three points worth stating plainly before you plan a structure:
Beneficial ownership is recorded. Since 1 March 2018 every non-listed Hong Kong company must maintain a Significant Controllers Register identifying anyone holding more than 25% of shares or voting rights, or otherwise exercising control. It is not public, but it is inspectable on demand by the Companies Registry, the Police, the Inland Revenue Department, Customs, the ICAC and the SFC.
Nominee arrangements do not create anonymity. Nominee directors and shareholders serve legitimate commercial and administrative purposes, but they do not remove a beneficial owner from the SCR, from bank KYC files, or from CRS reporting. Any provider promising otherwise is describing a service that does not exist.
Audit is not optional. Every Hong Kong company must have its accounts audited annually by a Hong Kong CPA, regardless of turnover or whether it traded at all.
Specificity
of setting up a company in Hong Kong
The standard vehicle is the private company limited by shares, which is the usual choice for foreign founders:
Share capital. No statutory minimum. HK$1 is legally sufficient; HK$10,000 divided into 10,000 shares is the common working default and presents better to banks.
Shareholders. From 1 to 50. Individuals or corporate bodies, any nationality, any residence.
Directors. At least one natural-person director, any nationality or residence. Corporate directors are permitted provided at least one director is a natural person.
Company secretary. Mandatory — an individual ordinarily resident in Hong Kong, or a body corporate with a registered office or place of business in Hong Kong holding a TCSP licence. A sole director cannot also be the company secretary.
Registered office. A physical Hong Kong address. P.O. boxes are not accepted.
Designated representative. Mandatory. A Hong Kong resident director, member or employee, or a licensed accountant, lawyer or TCSP.
Company name. English name, Chinese name, or both. The two scripts may not be mixed within one name.
Physical presence. Not required at any stage.
Timeline. Certificate of Incorporation and Business Registration Certificate are typically issued within 1–2 working days of electronic filing; allow 3–10 working days end to end including due diligence.
The Registration Process, Step by Step
Structure and name check. We confirm the shareholding and directorship structure, check name availability against the Companies Registry index, and flag any name that requires prior approval — words such as bank, trust or exchange, or anything implying a regulated activity.
Client due diligence. As a matter of law, any licensed provider must complete CDD before filing. Expect to supply certified passport copies and proof of residential address for every director, shareholder and beneficial owner, plus corporate documents and the ownership chain for any corporate shareholder.
Incorporation documents. Incorporation Form (NNC1), Articles of Association, and the simultaneous Business Registration application. Signatures can be handled remotely.
Filing via e-Registry. Electronic filing is cheaper and faster than paper. For straightforward applications the Certificate of Incorporation and the Business Registration Certificate are issued together, usually within one working day.
Post-incorporation setup. First board resolutions, issue of share certificates, company chop and common seal, and the opening of the statutory registers — register of members, register of directors, register of significant controllers.
Bank or payment account. Handled in parallel with the incorporation, not after it.
Handover. The complete corporate pack is couriered to any address worldwide, with certified and, where required, apostilled copies.
Documents
you will need
Certified passport copy for each individual director, shareholder and beneficial owner;
Proof of residential address issued within the last three months;
For corporate shareholders — certificate of incorporation, constitutional documents, register of directors and members, and a certificate of incumbency where the entity is more than a year old;
Proposed company name in English and/or Chinese;
Description of intended activities, target markets and expected counterparties;
Shareholding split and proposed share capital.
What It Actually Costs
Government fees are fixed and identical for everyone. They are also only part of the picture — a company secretary, a registered office and an annual audit are statutory, not optional extras. The figures below apply for 2026/27:
Companies Registry incorporation, electronic filing — HK$1,545. Hard copy filing costs HK$1,720.
Business Registration Certificate, one year — HK$2,350 from 1 April 2026 (HK$2,200 fee plus HK$150 levy). A three-year certificate costs HK$6,170.
Minimum total to incorporate — HK$3,895, being electronic filing plus a one-year Business Registration Certificate.
Annual Return (NAR1) — HK$105 when filed on time. Late filing escalates sharply, from HK$870 to HK$3,480.
Unsuccessful applications. Part of the Companies Registry fee is refundable, but a non-refundable processing charge of HK$470 is retained.
Recurring annual costs. Beyond government fees, budget for the company secretary and registered office, bookkeeping, and the statutory audit. Audit fees depend on transaction volume and complexity and are quoted separately by the CPA firm. A dormant or low-activity company still incurs the certificate renewal, the Annual Return, the secretary and the audit.
We quote a fixed first-year package and a fixed annual maintenance fee, with the audit priced transparently once we have seen the transaction volume. Ask for a written breakdown before you commit — to us or to anyone else.
Company Registration in Hong Kong and Taxation
Profits Tax — Corporations
8.25% on the first HK$2,000,000 of assessable profits.
16.5% on the balance. Only one entity in a group of connected entities may elect the two-tiered rates.
Profits Tax — Unincorporated Businesses
7.5% on the first HK$2,000,000 of assessable profits.
15% on the balance, under the same one-entity-per-group restriction.
The territorial source principle and offshore claims. Profits are taxable where the profit-generating activity takes place, not where the company is registered or where the invoice is paid. The Inland Revenue Department applies the guidance in DIPN No. 21, weighing where contracts are negotiated and concluded, where services are performed or goods handled, where the income-producing assets sit, and where strategic decisions are made.
An offshore claim is filed with the first profits tax return — which typically arrives around 18 months after incorporation — and must be supported by evidence: contracts, correspondence, travel records, and proof of where personnel actually sit. Approval, when granted, generally holds for several years but is reconfirmed annually and can be revisited if the facts change.
This has become materially harder. The Inland Revenue Department is scrutinising offshore claims more closely than it did even a few years ago, and rejects more of them. A Hong Kong company is not automatically a zero-tax company, and any adviser who presents it as one is setting you up for an assessment you did not budget for.
The FSIE regime. Since 1 January 2023, expanded from 1 January 2024, four categories of foreign-sourced income — dividends, interest, intellectual property income and disposal gains — are deemed Hong Kong-sourced and chargeable to profits tax when received in Hong Kong by a member of a multinational enterprise group, unless the entity meets an economic substance requirement, a participation requirement or a nexus requirement.
In practice this affects holding companies, treasury vehicles and intellectual property structures far more than ordinary trading companies. If your Hong Kong entity receives passive income from offshore subsidiaries, the substance question needs answering before incorporation, not after the first dividend.
There are several other types of tax specified by law:
Salaries tax. Progressive rates of 2%, 6%, 10%, 14% and 17% across bands of HK$50,000, or a two-tiered standard rate of 15% on the first HK$5,000,000 of net income and 16% above — whichever produces the lower liability. The basic allowance for 2026/27 is HK$145,000.
Property tax on rental income from Hong Kong immovable property. There is no general tax on all property of the company.
Withholding tax on royalties paid to non-residents — an effective rate of roughly 4.95%, or 16.5% between associated parties in certain cases. Dividends and interest paid to non-residents carry no withholding tax.
Stamp duty on transfers of Hong Kong shares and on immovable property. Confirm the current rate at the time of transfer.
MPF — mandatory retirement contributions for qualifying employees.
No VAT or GST, no capital gains tax, no estate duty. There are also various excise duties, vehicle registration fees and airport departure charges, but none of them is a general turnover tax.
One caveat that costs founders more than any of the above: low Hong Kong tax is not the same as low tax for you. Your country of residence may tax the company’s profits through controlled foreign company rules, or treat the company as tax-resident where it is actually managed. We assess both sides before recommending a structure.
Annual Compliance Calendar
Annual Return (NAR1) to the Companies Registry, within 42 days of the incorporation anniversary;
Business Registration Certificate renewal, annually or every three years;
Audited financial statements, prepared by a Hong Kong CPA for each financial year;
Profits Tax Return, as issued by the Inland Revenue Department. The first typically arrives around 18 months after incorporation;
Significant Controllers Register, kept current, with entries updated promptly after any change in control;
Annual General Meeting, per the Companies Ordinance, unless dispensed with by written resolution;
Employer’s Return and MPF, where the company has employees.
Failure to keep a Significant Controllers Register exposes the company and every responsible officer to a fine of up to HK$25,000 plus a daily default fine. Late Annual Returns escalate sharply in cost. None of this is onerous — but it is not self-executing, which is why a competent company secretary is a statutory requirement rather than a convenience.
Moving an existing
company to Hong Kong
Since 23 May 2025, under the Companies (Amendment) (No. 2) Ordinance 2025, a company incorporated elsewhere can transfer its domicile to Hong Kong without winding up, without a court-sanctioned scheme, and without novating its contracts. The company keeps its legal identity, its assets, its liabilities and its trading history. Key features:
Inward only. A company can re-domicile into Hong Kong, but a Hong Kong company cannot re-domicile out.
Four eligible types, or their close foreign equivalents: private and public companies limited by shares, and private and public unlimited companies with a share capital.
No economic substance test is imposed for eligibility, regardless of company size.
The original jurisdiction must permit outward re-domiciliation. The BVI and Cayman Islands, among others, do.
Members’ consent by at least 75% where the original law or constitution is silent.
De-registration in the original domicile within 120 days of the certificate of re-domiciliation, and a statement of capital (Form NSC21) filed within 15 days.
Tax residence. A re-domiciled company is treated as incorporated in Hong Kong, opening access to the treaty network, with transitional relief and unilateral tax credits to prevent double taxation.
For groups sitting on a BVI or Cayman holding company that no longer serves a clear commercial purpose — particularly where substance requirements have eroded the original rationale — this is usually cheaper and cleaner than incorporating fresh and transferring assets. Restructuring and redomiciliation is one of our core practice areas, and we handle the analysis on both sides of the move.
Banking and
payment accounts
We will not promise you a guaranteed bank account, and you should treat any provider that does with suspicion. Hong Kong banks apply full risk-based due diligence to every applicant, and the decision is the bank’s alone.
What we can do is materially improve the odds and shorten the process: preparing a coherent business rationale and document pack, matching your profile to institutions that actually serve it, arranging introductions, and — where a traditional bank is a poor fit — setting up accounts with licensed virtual banks or regulated payment institutions that suit an early-stage or fully remote business. Where the company sells online, a merchant account is usually needed alongside.
What helps: a clear and verifiable business model, named counterparties, contracts or invoices, a genuine connection to Asia, and a founder willing to attend a call or a meeting. What hurts: a vague description of activities, no evidence of trade, and a structure that appears designed to obscure ownership. More on bank account opening.
Hong Kong, Cyprus or Estonia?
The right answer depends on where your customers are:
Hong Kong suits businesses whose commercial centre of gravity is mainland China, the Greater Bay Area or wider Asia, family offices, and holding structures needing treaty access to the Mainland. There is no resident-director requirement and the ongoing filing burden is light;
Cyprus suits EU-facing holding and intellectual property structures, regulated finance and shipping, and owners who intend to relocate personally under the non-domicile regime;
Estonia suits EU-facing digital businesses that need an EU VAT number, EU market access and remote administration through e-Residency.
If your operations are in mainland China itself rather than trading with it, a locally incorporated vehicle may be the right structure instead of a Hong Kong company — or alongside one, with Hong Kong as the holding layer. See the full list of jurisdictions in Asia.
For fintech, virtual asset and gaming projects, the choice of company is inseparable from the choice of licence — see our licensing services and the overview of crypto licensing jurisdictions.
Working with Private
Financial Services
We have been forming and supporting companies since 1997, from headquarters in Estonia with representative offices in five countries, serving entrepreneurs from more than 130 countries. Our team works in English, Chinese, Russian, Spanish, German, Estonian, Latvian and Finnish. For Hong Kong we handle:
Structure and tax analysis before incorporation, including the position in your own country of residence;
Name clearance, incorporation filing and issue of the full corporate pack;
Company secretary, registered office and designated representative through licensed Hong Kong partners;
Significant Controllers Register setup and maintenance;
Bookkeeping, annual audit coordination and profits tax filing;
Offshore profits claims and FSIE substance assessments;
Bank and payment account introductions;
Nominee director and shareholder services where there is a legitimate commercial reason for them, with the beneficial ownership position explained honestly in advance;
Purchase of existing Hong Kong companies, and inward re-domiciliation of BVI, Cayman and other foreign entities;
Licensing support for fintech, virtual asset, gaming and other regulated activities;
Yacht and vessel registration, where the group’s activity requires it.
The experts of Private Financial Services are engaged in company registration under this prestigious jurisdiction of great potential. Before starting a business in Hong Kong, our specialists consider the specificity and area of concentration of the client — we register new companies, arrange the purchase of existing ones, and re-domicile foreign entities into Hong Kong.
Tell us what the company will do, where your counterparties are and where you are tax resident, and we will tell you whether Hong Kong is the right vehicle before you spend anything. If it is not, you can consider company formation in Estonia or company formation in Cyprus instead.