Hong Kong is a strategic junction in the heart of the Far East, offering companies the perfect springboard to grow into the multinationals of their dreams. As an island with little land for agriculture or mineral resources, the jurisdiction’s administration has focused on making it a business paradise. According to the World Bank, Hong Kong comes at the top of the list of the freest economies on the globe.
To take advantage of this jurisdiction, you need to start by registering it in Hong Kong. There are many business structures you can settle for, such as partnerships, but you might want to consider sole proprietorship to have absolute control. This post digs deeper into sole proprietorship to demonstrate the process of incorporation and why you should use company formation services in Hong Kong.
A Brief Look at Sole Proprietorship
Before we can tell you about the process of registering a sole proprietorship in Hong Kong, let’s start by understanding it. This is a business structure where you are the sole owner. This means that you take all the liabilities of the business. Simply put, there is no boundary between the owner and the business. In the event of challenging situations, such as bankruptcy or debts, your assets can be sold to meet the enterprise’s financial obligations. Raising capital might also be a challenge. You might want to compare the sole proprietorship with a limited liability business structure.
Registering a Sole Proprietorship in Hong Kong as a Foreigner
Although it comes with a host of challenges, you might want to consider it for a unique attachment. If you want to run a small business, a sole proprietorship will also be a good idea. As said by GuideMeHongKong experts : The best way to register a sole proprietorship is using company formation services in Hong Kong. The good thing about a sole proprietorship is that you only need to work with the Inland Revenue Department. So, here is the procedure:
● Get the Preferred Business Name
The name is paramount for your business because it helps to ensure your brand is unique and does not conflict with others. Here are some of the considerations when selecting a good business name.
(a) The name can be in English, Chinese, or a combination of both
(b) If you opt to combine an English and Chinese name, each name should be complete without a combination of characters
(c) The selected name should not give a suggestion that it is a limited liability enterprise
(d) The name should not be or appear in conflict with others already established on the island
● Register the Business with Inland Revenue Department
Once you have the right business name reserved for your business, go to the next step of registering it with the Inland Revenue Department (IRD). The process culminates with the issuance of a Business Registration Certificate (BRC). You are required to always display this certificate in your business address all the time for easy inspection.
● Open a Bank Account for the Business
To make it possible to start running your business, you will also need to have a bank account. The good thing about Hong Kong is that it is a financial hub and there are so many banks you can work with. The bank account will also be paramount to help with other processes, such as filing tax returns and business performance reviews.
Use Company Formation Services in Hong Kong
Although a lot simpler compared to registering a limited liability company, the process of starting a sole proprietorship is still a major challenge. The best route to use is through company formation services in Hong Kong. The experts will help you with the name search, application with IRD and further hold your hand during entry into the Hong Kong market. As a new business, the experts will also come in handy to help with filing tax returns, bookkeeping, and payroll management.When it comes to registering a sole proprietorship in Hong Kong, a professional is very important to help you appreciate the associated risks and hold your hand all the way. The company formation services in Hong Kong will also come in handy when you finally decide to scale up and register a limited liability company in Hong Kong.
