How to set up a company in Hong Kong (2026): steps, tax & cost
A non-resident can own and run a Hong Kong private limited company from abroad, but the low tax rate and the corporate bank account each come with real conditions.
Yes. A foreigner can be the sole director and sole shareholder of a Hong Kong private limited company, with no minimum capital in practice. Profits tax runs 8.25% on the first HK$2M of assessable profits and 16.5% above that; Hong Kong-sourced profits only, since the system is territorial. Budget roughly HK$8,000-20,000 (about US$1,000-2,600) all-in for year one and one to two weeks to incorporate. The hard part is the bank account, not the company.
Overview
Hong Kong is one of the cleanest low-tax jurisdictions on paper: a flat two-tier profits tax, no VAT or sales tax, no capital gains tax, no withholding tax on dividends, and a territorial system that only taxes profits sourced in Hong Kong. Incorporation is fast, fully electronic, and open to non-residents who never set foot in the territory.
The catch is that Hong Kong is a serious financial centre, not a rubber-stamp offshore haven. The offshore profits exemption is real but must be claimed and defended, the Inland Revenue Department is rejecting more offshore claims than it used to, and opening a corporate bank account as a non-resident is genuinely difficult. Treat the company as the easy 20% and banking plus substance as the other 80%.
Who it's for
Hong Kong suits people who need a credible, well-regarded holding or trading vehicle with access to Asian markets and a stable common-law legal system, and who can either show genuine local substance or run clean offshore-sourced operations. It fits less well for someone who just wants a cheap, hands-off shell with a bank account thrown in.
- Cross-border traders and e-commerce sellers dealing with mainland China and Asia
- Holding companies for regional investments, IP or subsidiaries
- Consultants and service businesses with international, non-Hong Kong clients
- Founders who value reputation and banking access over pure secrecy
- Not ideal if you need guaranteed easy banking, want a zero-substance shell, or live in a high-tax country that will tax the company as its own resident
Types of company
The overwhelming default for foreigners is the private company limited by shares. Other forms exist but are rarely what an inbound founder wants.
| Entity | Who uses it |
|---|---|
| Private company limited by shares | The standard choice. Separate legal person, limited liability, one director and one shareholder minimum (can be the same non-resident person), shares privately held. |
| Public company limited by shares | For raising capital from the public or listing. Heavier disclosure and audit; not for typical small businesses. |
| Sole proprietorship / partnership | Unincorporated, taxed at lower personal rates (7.5% / 15%) but with unlimited personal liability. Realistic only for local residents. |
| Branch / representative office of a foreign company | Registered non-Hong Kong company. Useful for an existing overseas group, but not a separate liability shield. |
Corporate tax & key taxes
Hong Kong taxes profits under a two-tier regime and applies it territorially. Only profits arising in or derived from Hong Kong are chargeable; genuinely foreign-sourced profits can be exempt if you file an offshore claim and it holds up. Verify current rates against the Inland Revenue Department before relying on them.
| Tax | 2026 treatment |
|---|---|
| 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 connected group may elect the lower first-tier rate each year. |
| Territorial / offshore profits | Non-Hong Kong-sourced profits can be tax-exempt via an offshore claim, but exemption is not automatic and the IRD is scrutinising claims harder. |
| VAT / GST / sales tax | None. Hong Kong imposes no value-added, goods-and-services or general sales tax. |
| Capital gains tax | None on genuine capital gains. But gains the IRD views as trading profits (via the 'badges of trade') can be taxed as profits. |
| Withholding tax | No withholding on dividends or interest. Royalties to non-residents carry withholding (commonly around 4.95%, higher in some cases). |
| Dividends received / paid | Dividends are generally not taxable in the recipient's hands, and there is no tax on distributing profit to shareholders. |
How to set it up, step by step
- Choose and check a company name (English, Chinese, or both) for availability against the Companies Registry index.
- Appoint at least one natural-person director (can be a non-resident) and at least one shareholder; a single overseas individual may hold both roles.
- Appoint a company secretary who ordinarily resides in Hong Kong, or a licensed corporate secretary (TCSP-licensed). The sole director cannot also be the secretary.
- Secure a local registered office address in Hong Kong (a physical address, not a P.O. box) - usually provided by your service agent.
- Prepare the articles of association and incorporation form (NNC1) with director, shareholder and share-capital details.
- File electronically with the Companies Registry and pay the incorporation fee; the Business Registration Certificate is issued in the same one-stop process.
- Receive the Certificate of Incorporation and Business Registration Certificate (typically within about one working day electronically, longer if using an agent's onboarding checks).
- Set up statutory records, then tackle banking - open a corporate account with a traditional bank or a fintech/virtual banking provider (see the banking reality below).
Costs & timeline
Government fees are modest and fixed; the variable cost is the service agent who supplies the secretary, registered address and compliance support. Figures below are indicative for 2026 - confirm current government fees with the Companies Registry and IRD.
| Item | Typical 2026 figure |
|---|---|
| Companies Registry incorporation fee | HK$1,545 (electronic) / HK$1,720 (hard copy) |
| Business Registration Certificate (from 1 Apr 2026) | HK$2,350 for one year (HK$6,170 for three years), payable to the IRD |
| Service package (secretary + registered address + filing) | Roughly HK$4,000-12,000 (about US$500-1,500) in year one; varies by provider |
| Annual renewal (secretary, address, annual return, BR renewal) | Roughly HK$5,000-12,000+ per year, plus an annual audit |
| Minimum share capital | No statutory minimum; commonly issued at HK$1 or HK$10,000 nominal |
| Local director requirement | None - a non-resident can be sole director |
| Local secretary / registered office | Required - secretary must ordinarily reside in HK (or be TCSP-licensed); registered office must be a HK address |
| Typical timeline | About 1 working day for incorporation electronically; 1-2 weeks including agent onboarding; banking can take weeks to months |
Substance, banking & the reality
Two things trip up most foreign founders. First, a Hong Kong company that is actually managed and controlled from where you live can be treated as tax-resident there under place-of-effective-management or CFC rules - so the low Hong Kong rate does not automatically make your worldwide tax bill low. Second, the offshore claim and any FSIE passive income increasingly require demonstrable Hong Kong substance, and the corporate bank account is the real bottleneck. Traditional banks often want an in-person interview, a clear business narrative, proof of ownership and money flow, and sometimes a local nexus; virtual banks usually need a Hong Kong ID, putting them out of reach for many non-residents.
Common mistakes
- Assuming incorporation equals tax-free - offshore status must be claimed and substantiated, not presumed
- Ignoring your home-country CFC and management-and-control rules, which can pull the company into a higher-tax net
- Underestimating banking - opening the account late, without documents, or expecting a same-week approval as a non-resident
- Treating FSIE passive income (dividends, interest, royalties, disposal gains) as automatically exempt without meeting the substance test
- Letting the sole director try to also serve as company secretary (not allowed) or using a non-resident secretary
- Missing the annual audit, annual return and Business Registration renewal, which trigger penalties and can lead to strike-off
Frequently asked questions
Can a non-resident set up a company in Hong Kong?
Yes. A single overseas individual can be both the sole director and sole shareholder of a Hong Kong private company limited by shares, with no requirement to be a resident or to visit. You do need a company secretary who ordinarily resides in Hong Kong (or a licensed corporate secretary) and a local registered office address, both normally supplied by a service agent.
How much does it cost to open a company in Hong Kong?
Government fees are about HK$1,545 for incorporation plus HK$2,350 for the one-year Business Registration Certificate (from April 2026). Add a service package for the secretary, registered address and filing, usually HK$4,000-12,000 in year one. All-in, expect roughly US$1,000-2,600 for year one, with similar annual renewal plus audit costs. Verify current figures before you file.
How long does it take to incorporate?
The incorporation itself is fast - electronic filing with the Companies Registry can be approved in about one working day, and the Certificate of Incorporation and Business Registration Certificate issue together. Allowing for agent onboarding and due-diligence checks, one to two weeks is realistic. Opening the corporate bank account is separate and typically takes far longer, from weeks to months.
What is the corporate tax rate in Hong Kong?
Corporations pay profits tax at 8.25% on the first HK$2 million of assessable profits and 16.5% on profits above that. Because the system is territorial, only Hong Kong-sourced profits are chargeable; genuinely foreign-sourced profits may be exempt if you file and successfully defend an offshore claim. There is no VAT, no capital gains tax, and no withholding on dividends.
Is it hard to open a Hong Kong corporate bank account as a non-resident?
Yes - this is usually the hardest part. Traditional banks often require an in-person interview, extensive due diligence, proof of ownership and money flow, and sometimes a local nexus, and they reject non-resident applicants who look high-risk or unclear. Virtual banks generally require a Hong Kong ID, ruling out most non-residents. Prepare a clean business case and keep a fintech or EMI fallback in mind.
Official & government sources
Rules change — always confirm the current position with the primary authority:
- Companies Registry - Major Fees under the Companies Ordinance
- Companies Registry - Incorporation of a Local Limited Company (FAQ)
- Inland Revenue Department - FAQ on Two-tiered Profits Tax Rates Regime
- Inland Revenue Department - FAQ on the Foreign-Sourced Income Exemption (FSIE) Regime
- Financial Services and the Treasury Bureau - Prevailing Tax Policy
- InvestHK - Setting up your business in Hong Kong
Work with Expectat
Ready to build your borderless plan?
Book a private strategy session — we'll map your residency, capital and Bitcoin setup, and the fastest legal path to it.
More Hong Kong guides
Hong Kong passport: visa-free countries & ranking (2026)
How many countries can Hong Kong passport holders visit visa-free in 2026? Around ~170+… more
Hong Kong residency & tax 2026: how to apply, cost & timeline
How to get residency in Hong Kong in 2026 — routes, step-by-step application, documents… more