Hong Kong is a popular jurisdiction for businesses due to its strategic location, simple tax system, and robust legal framework. When starting a business in Hong Kong, one of the first decisions you’ll need to make is choosing the right company structure. This post will guide you through the main types of companies available, their key features, and typical use cases.
Choosing the right structure is crucial as it impacts your liability, taxation, and compliance requirements. Let’s explore the options:
A private limited company (Ltd.) is the most common type of company structure in Hong Kong. It’s a separate legal entity from its shareholders, meaning the company’s liabilities are separate from the personal assets of its owners.
Shareholders’ liability is limited to the amount of their investment.
The company can own property, enter into contracts, and sue or be sued in its name.
The company continues to exist even if the shareholders or directors change.
The incorporation process is straightforward and can be completed relatively quickly.
A public company is a company whose shares can be offered to the general public. Public companies are subject to stricter regulations and compliance requirements than private limited companies.
Can issue shares to the public to raise capital.
Must comply with the Hong Kong Companies Ordinance and the Listing Rules of the Stock Exchange of Hong Kong (SEHK).
Required to disclose more information to the public.
A sole proprietorship is a business owned and run by one person. There is no legal distinction between the owner and the business.
Easy and inexpensive to establish.
The owner has complete control over the business.
The owner is personally liable for all business debts and obligations.
Business profits are taxed as the owner's income.
A partnership is a business owned and run by two or more people who agree to share in the profits or losses of the company.
Easier to establish than a limited company.
Partners can pool resources and expertise.
Partners are jointly and severally liable for the debts and obligations of the partnership. Limited partnerships offer some partners limited liability.
Each partner's share of the profits is taxed as personal income.
Let our experts manage your filings and deadlines while you stay focused on growing your business.
