For business owners and families considering a Hong Kong company for trading, services or regional holdings. It covers, in order: when it fits, set-up and governance, documents, key tax points, opening a bank account, and annual upkeep and filings.
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01 When it fits, and when it may not
Hong Kong companies are commonly used in the situations below. What they share is business tied to Asian markets and cross-border payments, and owners who are prepared to have the accounts audited and file tax returns every year.
Trading and sourcing
One company handles orders, purchasing, payments and receipts, dealing with customers and suppliers in several currencies.
Cross-border services
The company contracts with and serves clients across the region. Whether the profits are taxed in Hong Kong depends on where the services are actually performed (see section 04).
Regional holding company
The company holds shares in subsidiaries in Mainland China or elsewhere in Asia and manages investments and dividends in one place.
Family holdings
Family members act as shareholders or directors and hold investments and shares together, so that succession can later be arranged through wills or trusts.
When another place may fit better
If you need to hire a team or run operations in Southeast Asia, compare a Singapore company. If you only need to hold shares and have no local operations, a BVI company needs no audit and is lighter to maintain. The choice still depends on where your business, clients and shareholders are.
02 Set-up and governance
The most common form is a private company limited by shares, incorporated and run under Hong Kong’s Companies Ordinance. The main roles and registers are:
Directors
At least one, and at least one must be a natural person. Directors can be of any nationality and need not live in Hong Kong. A company can also be a director, but not instead of the natural-person director.
Shareholders
Between 1 and 50, individuals or companies, of any nationality. The same person can be both a shareholder and a director.
Company secretary
Required. An individual secretary must ordinarily reside in Hong Kong; a corporate secretary must have its registered office or a place of business in Hong Kong. If the company has only one director, that director cannot also be the secretary. Most companies appoint a licensed company service provider.
Registered office
The company needs an address in Hong Kong for official and legal documents. Many companies use an address provided by their company secretary.
Statutory registers
The registers of members, directors and company secretaries are kept at the registered office or another specified place. Changes of directors or secretary must be reported to the Companies Registry.
Significant controllers register
Records the people who control the company, such as anyone holding more than 25% of the shares or voting rights, or with the right to appoint or remove most of the directors. It is kept in Hong Kong, with a designated representative to help law enforcement officers inspect it. It is not filed with the Companies Registry and is not open to the public.
03 Documents for incorporation
You will usually need the items below. Under anti-money-laundering rules, the service provider will also verify the identity and source of funds of the shareholders, directors and beneficial owners.
Company name
An English name, a Chinese name or both. Check before filing that it is not the same as, or too like, an existing company’s name.
Identity documents
Hong Kong identity cards or passports and proof of address for the directors, shareholders and secretary. A corporate shareholder also provides its registration documents and ownership chart, traced up to the beneficial owners.
Shares and capital
The number of shares to be issued, the capital and each shareholder’s percentage. Hong Kong has no minimum capital, and shares have no par value.
Articles of association
The company’s internal rules. You can use a standard model or adapt it to what the shareholders agree, for example limits on transferring shares.
Business and funding
The planned business, where the main clients or suppliers are and where the money comes from. This also lays the groundwork for opening a bank account.
What you receive
A certificate of incorporation and a business registration certificate. You can then prepare the bank account application (see section 05).
04 Key tax points
Profits tax is charged only when a company carries on business in Hong Kong and its profits arise in Hong Kong. As of 2026, the first HK$2 million of a company’s assessable profits is taxed at 8.25% and the rest at 16.5%. Among connected entities, only one can choose these two-tier rates.
Hong Kong taxes on a territorial basis: what counts is where the business that produces the profits is actually carried out, not where the clients or the receiving bank are.
Foreign passive income (FSIE)
Since 2023, a Hong Kong company that belongs to a multinational group, whatever its size, may be taxed on foreign dividends, interest, intellectual property income and disposal gains received in Hong Kong (gains on all types of assets since 2024), unless it meets an exception such as economic substance.
What is not taxed
Hong Kong has no VAT and no withholding tax on dividends. Gains of a capital nature are generally not taxed, but whether a gain is capital depends on the facts.
Rules where the shareholders live
Even if profits are not paid out, controlled foreign company (CFC) rules where the shareholders live may require them to report the company’s income. See Tax Basics for Offshore Companies.
05 Opening a bank account
Once the company is registered, the bank account is a separate application. The bank reviews the company’s actual business, its counterparties and the places it deals with, where the money comes from and who the beneficial owners are, and decides under its own risk policy whether to accept it. For the main Hong Kong banks and what they review, see Hong Kong Business Bank Accounts.
Requirements differ between banks and account tiers, and the application channels and whether you need to attend in person depend on each bank’s current policy and your case. Before applying, it helps to prepare the following:
Company documents
Certificate of incorporation, business registration certificate, articles of association and up-to-date details of shareholders, directors and significant controllers.
Business description
Your business model, main clients and suppliers, and the countries and currencies you expect to deal in.
Evidence of trading
Contracts, orders, invoices or a website: anything that shows the business is real.
Source of funds
Where the share capital and working capital come from, and the background of the beneficial owners.
06 Annual upkeep and filings
After incorporation, a Hong Kong company usually has the tasks below each year. They do not stop just because the company is not trading.
Annual return
Filed with the Companies Registry within 42 days after each anniversary of incorporation.
Business registration
The business registration certificate must be renewed before it expires, for one or three years.
Audit
The financial statements must be audited every year by a Hong Kong practising accountant. Qualifying small private companies may use simplified reporting but still need an audit. Companies registered as dormant are exempt.
Profits tax return
When the Inland Revenue Department issues a profits tax return, file it with the audited financial statements by the deadline. A new company usually receives its first return about 18 months after incorporation.
Annual general meeting
A private company generally holds its AGM within 9 months after the end of its accounting reference period. If all members agree, a written resolution can take its place.
Records and updates
Keep accounting records for at least 7 years. Record or report changes of directors, secretary, registered office or significant controllers as required.
Key planning points at a glance
| Item | Key points | Watch out for |
|---|---|---|
| Common uses | Trading, cross-border services, regional and family holdings | For operations in Southeast Asia, compare Singapore |
| Directors and company secretary | At least one natural-person director; a company secretary who, if an individual, ordinarily resides in Hong Kong | A sole director cannot also be the secretary |
| Beneficial ownership register | Significant controllers register, kept by the company in Hong Kong | Not filed with the Registry; law enforcement officers can ask to inspect it |
| Tax | Two-tier profits tax of 8.25% / 16.5% (as of 2026), on a territorial basis | Foreign passive income received in Hong Kong: check the FSIE rules |
| Annual obligations | Annual return, business registration renewal, audit, profits tax return | Still due when not trading, unless the company is made dormant |
| Bank account | A separate application, reviewed independently by the bank | Prepare a business description, evidence of trading and the source of funds |
Frequently asked questions
Does a Hong Kong company still have to file if it is not trading for now?
It cannot simply stop. A private company can pass a special resolution and register it with the Companies Registry to become a dormant company. While dormant, it need not file annual returns or have an audit, but changes of directors, secretary or registered office must still be reported. If you are sure you no longer need the company, you can apply for deregistration once the conditions are met: for example, all members agree, it has not traded in the 3 months before applying, it has no outstanding liabilities and the Inland Revenue Department has issued a notice of no objection.
Can a company set up elsewhere, such as in the BVI, move to Hong Kong?
Yes, since 23 May 2025. A company incorporated outside Hong Kong can apply to the Companies Registry to re-domicile, if the law where it was formed allows it to leave. It becomes a Hong Kong company and keeps its legal identity, assets and contracts. It must then deregister in its original jurisdiction within the set time and take on Hong Kong duties such as audit, annual returns and the significant controllers register. Check the tax and banking effects beforehand.
Can every company in a group use the two-tier tax rates?
No. Among connected entities, such as companies controlled by the same person, only one can elect the two-tier rates in each year of assessment; the others pay 16.5% on all their profits (as of 2026). Splitting a business into several companies just to use the lower rate more than once does not work, so check the business purpose of each company before setting up more than one.
What do I need to show that profits arise outside Hong Kong?
The Inland Revenue Department looks at where the business that produced the profits was actually done: where contracts were negotiated and signed, where goods were bought and delivered, and who performed the services and where. Keeping contracts, emails, travel records and invoices helps show where the profits come from. The department may send enquiries asking for more information, and it decides on the facts whether to accept the claim.
How can a professional adviser help?
Nextrate starts from the needs of each case: we help clarify your goals, list the documents required, set out feasible options and the main risks, and work with qualified legal, tax and other professionals where needed. Any bank application, tax outcome or legal effect is determined independently by the relevant institution, case by case.