Being one of the freest economies in the world, Hong Kong has been the hotspot of business for many. So, it is no wonder that business enthusiasts are moving to Hong Kong and looking for a sole proprietorship.
But what is the whole process of registering your business for a sole proprietorship? What exactly is a sole proprietorship, and should you be getting it?
In this excerpt below, we will be answering all the questions you should have as a foreigner or local thinking of starting a business with a sole proprietorship in Hong Kong.
What Is A Sole Proprietorship?
A sole proprietorship is when there is no law between the owner of the business and the business. They are the sole owner of the business and all the assets within.
– As a business owner, your business is legally not a separate entity.
– This also means that you are the sole person responsible for anything. Starting from any damage the business causes, any loss and liability are in your name.
– Your company name is equivalent to your name in the eyes of the law.
– Any asset or profit you earn is your sole property (other than the tax), and you decide what to do with it.
This business structure is very popular for small businesses with a simple business plan.
Registering As A Sole Proprietorship In Hong Kong
Now, here is a guide and the need to open a sole proprietorship in Hong Kong.
1. The Documents You Would Require
First and foremost, you have to collect these documents necessary for the matter of sole proprietorship. So, keep them ready before you collect the registration form.
– A company name that has been approved by the Hong Kong government.
– Incorporation structure completed, signed. Try to get information about the incorporation structures of that country.
– If you are a local resident, you will need a valid ID provided by the government of Hong Kong.
– If you are a foreign businessman, then your passport and ID which has a valid address for your current residential place.
Now, if you are not residing in Hong Kong, it can be difficult for you to understand everything. Therefore, it is better to have a local agent for step-by-step guidance. If you have an agent, you also have to give their credentials and all the particularities while registering.
2. Before Registering
Now, starting with the step-by-step guide to registering for a sole proprietorship in Hong Kong.
– Start with registering your business with the Inland Revenue Department. Without this, you wouldn’t have the validity to register your company for further proprietary. If you make any changes to your business structure, you have to inform the Inland Revenue Department a month prior.
– If you plan to set up more than one company or business in Hong Kong under sole proprietorship, all of them must be registered.
A sole proprietorship is not that complex a process. Once you have registered with the proper company name and every information required by the registration office, it will generally take one day for you to get sole proprietorship.
3. Proprietorship As A Foreigner
When you are getting a proprietorship as a foreigner, the steps are almost the same other than a few changes here and there.
– You will need an Investment Visa in order to reside in Hong Kong and have a sole proprietorship. Meanwhile, you can submit it for company approval.
– However, it is not easy to get an Investment Visa. To begin with:
- You have to give significant proof that the business will help with the total profit of the country
- Therefore, you have to submit a lucrative business idea that can draw money from the residents of Hong Kong.
- You also have to ensure that your business is yielding job opportunities for the locals of Hong Kong.
4. After Registering
Once you are done with the registration process, you are all set to set up a business with a sole proprietorship.
– Once you get your Business Registration Certificate post registering, it will contain a business ID number. Keep it safe, as you will need it during the tax file.
– Your business registration for a sole proprietorship in Hong Kong will have a limited time period. After which, your business will be removed, so ensure to register a month again before the expiration.
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