Country Trading Profiles Hong Kong

Setting up a company | FDI in figures | Why you should choose to invest | Procedures relative to foreign investment | Finding assistance for further information

Setting up a company

Types of companies and capital (max/min)	Number of partners/shareholders and liability
Sole Proprietorship is an individual company. No minimum capital.	1 person Individual entrepreneur is liable for debts of the enterprise on personal goods.
Company Limited by Guarantee No minumum capital.	minimum 2 partners. Their liabilities are limited to the amount of contributions made to the shares of the company;.
Unlimited Company No minimum capital.	minimum 2 partners. Their liabilities are unlimited and joint.
Private Limited Company In practice 1,000 HKD minimum.	minimum 2 partners. maximum 50 partners. Their liabilities are limited to the amount of contributions.
Public Limited Company No minimum capital.	At least 1 partner Their liabilities are limited to the amount of contributions.
General Partnership No minimum capital.	Minimum 2 partners. Minimum 20 partners. Their liabilities are unlimited for the debts and obligations of the association.
Limited Partnership No minimum capital.	Minimum 2 partners. Minimum 20 partners. At least one partner should have unlimited liability. Liability of other partners is limited to the amount of contributions.

Business setup procedures

Setting up a company	Hong Kong	East Asia & Pacific
Procedures (number)	3.0	7.8
Time (days)	6.0	39.0

Source: Doing Business.

For further information: Consult Doing Business Website, to know about procedures to start a Business in Hong Kong.
Trade Register
The competent organization: Company register

FDI in figures

Foreign Direct Investment	2008	2009	2010
FDI inward flow (millions USD)	59,621	52,394	68,904
FDI stock (millions USD)	816,184.4	936,374.6	1,097,619.7
Performance Index*, ranking on 141 economies	2	4	-
Potential Index**, ranking on 141 economies	5	-	-
Number of Greenfield investments***	216	253	-
FDI inwards (in % of GFCF****)	138.9	3.0	-
FDI stock (in % of GDP)	379.4	433.2	-

Source:

Note: * The UNCTAD Inward FDI Performance index is based on a ratio of the country's share in global FDI inflows and its share in global GDP. ** The UNCTAD Inward FDI Potential index is based on 12 economic and structural variables such as GDP, foreign trade, FDI, infrastructures, energy use, R&D, education, country risk. *** Green field investments are a form of foreign direct investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up. **** Gross fixed capital formation (GFCF) measures the value of additions to fixed assets purchased by business, government and households less disposals of fixed assets sold off or scrapped.

Why you should choose to invest Hong Kong

Strong points: Hong Kong is an international leader in terms of export and as a services center. The country is also the bridgehead to one of the largest production bases in the world, China. Hong Kong has a sound economy and an efficient financial and banking system.
Favorable tax measures, the transparency of local institutions, political stability, freedom of information, availability of qualified human resources as well as its advantageous geographical location in Asia, all constitute to make Hong-Kong a preferred place for company establishment, as witnessed by the millions of companies registered on the territory. In 2003, the Capital Investment Entrant Scheme (CIES) was launched by the Hong Kong Special Administrative Region (SAR) Government. This scheme aims to facilitate the entry for residence for Foreign investors through capital investment into permissible assets without the need to establish or join in a business.
Weak points: Hong Kong has few, yet consequential, negative points against setting up:
- High cost of real estate and work space (offices, shops,etc.);
- High cost of salaries, compared to other Asian countries such as Mainland China and India;
- The question of Hong Kong's future, especially when the town will be completely integrated with the People's Republic of China;
- The excessive importance of the financial sector.
Furthermore, on the whole of the 2008-2009 year, the Hong Kong stock market was highly disturbed. The stock market's main indicator fell by 45%, the lowest in 34 years.
Government measures to motivate or restrict FDI: Hong Kong is a free territory for investments, which are in fact encouraged by the government with a favorable taxation policy and light legislation. Foreign companies can be set up freely, register their brands and the Director of the company doesn't have to be a citizen nor resident of Hong Kong.
Bilateral investment conventions signed by Hong Kong: Hong Kong has signed bilateral agreements for investments with 15 countries.
To see the list of countries, click here.
To see the agreements, click here.

Procedures relative to foreign investment

Freedom of establishment: Yes. Visit http://www.investhk.gov.hk/
Acquisition of holdings: Acquisition is authorised, except in certain sectors of activity.
Obligation to declare: A registration certificate should be requested from Inland Revenue Department (IRD). Foreign Investment Agency in the country keeps you informed about the authorisations necessary for the establishment.
Competent organization for the declaration: Companies Registry
Tax authority of Hong Kong (IRD)
Requests for specific authorizations: Only some sectors are closed for foreign investors, like communications or other areas of activity considered for public utility.

Finding assistance for further information

Investment aid agency: Invest in HK
Other useful resources