Doing Business

(English Version Only)

Hong Kong is always considered as the gateway to the emerging China Market which GDP has ranked the second in the world and estimated to pass United States in the coming future. With its strong financial and banking infrastructure, Most China affiliated companies have chosen Hong Kong to IPO on the one hand, and thousands of international companies involved in China trade have chosen to establish their operation in Hong Kong on the other hand.

Apart from its world class infrastructure, Hong Kong is famous by its low taxes, excellent rule of law, clean government, free information flow, freedom of speech, skilled workforce and international lifestyle. All these are the important criteria for multinational companies to examine before deciding to start their operation and sending their expatriates to station in Hong Kong.

This guide presents some useful tips on the etiquette, protocol and cross cultural communication for doing business in Hong Kong.

Meeting and Greeting

Hong Kong is an international city and so do the greeting style. Gentle handshake and sometimes hug are expected. Strong handshakes and European style cheek kissing are not really the norm in Hong Kong.

When meeting a group, greeting should start with the most senior member and addressed with their title and surname as a gesture of respect.

Cultural Notes

Most Chinese are still conservative in physical contact so be avoid to pat people on the back or hold someone's shoulder for either the same or different sex.

Gift Giving

Inherited from the clean government, gift giving is not really a must to do business in Hong Kong. Gift giving to any staff in Government department may even be a criminal offense.

However, small gift or souvenirs may help establish and maintain relationships especially during Christmas and Lunar New Year.

Business Lunch/Dinner/Entertainment

Business lunch and dinner are usually the means to open the door for business in Hong Kong. There are too many quality restaurants serving different cuisine in Hong Kong. www.openrice.com is the most visited restaurant booking website which has the most comprehensive listing of restaurants in Hong Kong.

Spirit of Contract

The legal system in Hong Kong is similar to the common law systems used in England and Wales and other Commonwealth countries. Its judiciary has had a very good reputation for its fairness and was recently rated as the best judicial system in Asia by a North Carolina think tank.

Under this efficient jurisdiction system, most companies operating in Hong Kong have good spirit of contract.

Business Registration in Hong Kong

Start doing business in Hong Kong requires a registration in The Companies Registry. There are hundreds of accounting firms and solicitor firms in Hong Kong which help their clients to do the business registration at an all inclusive cost ranging from HK$6,500 to HK$15,000. If you choose do it yourselve, the following are the registration procedures:

Step 1. Select a unique company name and apply for a certificate of incorporation in the Companies Registry
Time to complete: 7 days
Cost to complete: HKD 1,720 application fee + 0.1% of authorized share capital, capped at 30,000
Remarks: A company name can be searched online free of charge at the Companies Registry. Applying for a certificate of incorporation requires that the memorandum and articles of association (unnotarized is acceptable) and a statement of compliance be filed with the Companies Registry. Companies are refunded HKD 1,425 for unsuccessful applications. According to the Companies (Amendment) Ordinance 2003, Hong Kong companies are no longer required to have at least two subscribers, directors, and shareholders. They can now have one each. Moreover, companies are no longer required to file a statutory declaration of compliance with the Companies Registry. Instead, a standard government form (a statement of compliance) must be completed and filed with the Companies Registry.

Step 2. Obtain a business registration certificate (Inland Revenue Department)
Time to complete: 1 day
Cost to complete: HKD 450
Remarks: A business registration certificate must be obtained within a month of starting operations, by filing an application form (Form 1[b]) and a copy of the certificate of incorporation.

Step 3. File notifications regarding company details with the Companies Registry
Time to complete: 1 day
Cost to complete: no charge
Remarks: Within 14 days of the effective date of incorporation, the company is required to file with the Companies Registry notifications on the secretary and director(s), the location of the registered office, and the consent(s) to act as a director. Standard notification forms are available.

Step 4. Sign up Employee Compensation Insurance and Mandatory Provident Fund (MPF) Schemes with a private company or a bank
Time to complete: 1 day
Cost to complete: no charge
Remarks: Under the Employees’ Compensation Ordinance, an employer must possess a valid insurance policy to cover its employees (both full- and part-time) who are fatally injured or disabled due to accidents arising out of and during employment. In addition, all employees ages 18–65 and employed for 60 days or more under an employment contract (regardless of the number of work hours) must be covered by the Mandatory Provident Fund (MPF) Schemes Ordinance (except for persons exempted from the scheme) and be enrolled in an MPF scheme. The employer is also required to display the participation certificate issued by the Mandatory Provident Fund Authority at the work premises. The employer can arrange this insurance and the MPF scheme with any insurance company or bank in Hong Kong.

Step 5. Make a corporate seal and company rubber stamp
Time to complete: 1 day
Cost to complete: HKD 215