Hong Kong SAR, China Country profile

Opening Hours and Days

Banks and government offices close on Saturdays and Sundays.

Stores close at 10:00 pm. They remain open sometimes even on Saturday and Sunday. Companies close at 06:00 p.m.

Public Holidays

Holiday Compensation

When a public holiday falls on a Sunday or on the same day as another holiday, the next day is a day off. Sometimes the government will select the day before as an off-day.

Periods When Companies Usually Close

Hotel reservation websites

Office Holidays

Tax Rate For Foreign Companies

Hong Kong SAR operates under a territorial tax system where profits tax is imposed on any entity, including corporations, partnerships, and sole proprietorships, engaged in trade, profession, or business within Hong Kong SAR, based on profits generated within or derived from the region. Generally, tax residency holds little significance, and there's no differentiation between residents and non-residents regarding profits tax liability, except within the context of tax treaties. Non-residents conducting trade, profession, or business within Hong Kong SAR are subject to tax on profits generated within or derived from the region, unless they originate from jurisdictions covered by tax treaties with Hong Kong SAR, where they enjoy treaty protection.
Foreign-source dividends and disposal gains on equity interests also may be exempt from profits tax if the participation exemption applies. 

Capital Gains Taxation

Long-term capital gains are not taxed in Hong Kong. Nevertheless, capital gains deriving from the disposal of assets may be subject to profits tax if the disposal constitutes a transaction in the nature of trade (especially in the real estate industry).
Starting from 1 January 2024, Hong Kong SAR-source disposal gains on equity interests held for at least 24 months by an investor entity, where these interests constitute at least 15% of the investee entity’s total equity, will be regarded as capital in nature and non-taxable. However, certain foreign-source disposal gains are subject to profits tax unless specific conditions are met: the economic substance requirement (for property other than intellectual property), the nexus requirement (for intellectual property), or the participation exemption (for equity interests).

Main Allowable Deductions and Tax Credits

Deductible expenses must be wholly, exclusively and necessarily included in the production of taxable income, including depreciation, debts, repairs to plants, trademark rights registration costs, etc. Other deductions that are allowed include mandatory pension contributions (up to 15% of the employee's total emoluments) and donations of more than HKD 100 (capped at 35% of the assessable profits).
The tax deduction for voluntary contributions made by employers to the Mandatory Provident Fund for employees aged 65 or above has been increased from 100% to 200% with the 2023-24 budget.
Special deductions are provided for R&D expenditure (100%; or 300% deduction on the first HKD 2 million and 200% on the excess, according to the type of investment), purchases of patent rights, rights to know-how, copyrights, registered designs and trademarks, capital expenditure on the provision of prescribed fixed assets including manufacturing machinery and computer software, etc. Capital expenditure, start-up expenses, internal expenditure and any other spending that is not incurred to earn income are not tax-deductible.
Net operating losses can be carried forward indefinitely, whereas loss carryback is not allowed. Capital losses are not tax-deductible.
For further information, consult the dedicated page on the website of the Inland Revenue Department.

Other Corporate Taxes

Stamp duty in Hong Kong SAR is charged on documents related to the lease, sale, or transfer of immovable property and shares. If property or shares are transferred below market value, stamp duty is based on the market value at the transfer date. For Hong Kong SAR shares, stamp duty is 0.2% of the transfer value (0.1% for each of the bought and sold notes), reduced from 0.26% and 0.13% as of 17 November 2023, with exemptions for certain intragroup transactions. Lease stamp duty rates are 0.25% for leases up to one year, 0.5% for leases between one and three years, and 1% for leases over three years. Ad valorem stamp duty (AVD) on non-residential property sales is capped at 4.25%, while for residential properties, AVD is a flat 7.5% with some exceptions. A special stamp duty (SSD) of 10% to 20% applies if residential property is sold within 24 months, and a 7.5% buyer's stamp duty applies to residential property purchases by non-Hong Kong SAR permanent residents, including limited companies. Effective from 28 February 2024, the rate of the Buyer’s Stamp Duty and of the Special stamp duty are reduced to 0%.

Property tax in Hong Kong SAR is levied annually on the owner of any land or buildings (excluding government and consular properties) at a standard rate of 15% on the net assessable value of the property. The net assessable value is calculated as the consideration payable to the owner for the right to use the property, minus any rates paid by the owner and a 20% notional allowance. Corporate rental income from Hong Kong properties is subject to profits tax. A corporation subject to profits tax can request an exemption from property tax for the property. If no exemption is sought, the property tax paid can be offset against the profits tax payable by the corporation.
The government also levies indirect taxes as privately owned land in Hong Kong is normally held by way of a government lease: the rate is generally 3% of the rateable value of the property.

Under the Mandatory Provident Fund scheme, employers are required to make a mandatory contribution for their employees that is equal to 5% of their monthly income (the relevant minimum and maximum income levels are HKD 7,100 and HKD 30,000, respectively).

The Plastic Shopping Bag (PSB) charging scheme mandates that all plastic bags (excluding those used for food hygiene purposes) provided for retail sales, including flat-top bags, incur charges, with retailers required to levy at least HKD 1 per bag, retaining the proceeds. Additionally, effective from 1 August 2024, the Hong Kong SAR government will enforce Municipal Solid Waste (MSW) charging, aligning with the 'polluter-pays' principle, wherein waste disposal across all sectors will be subject to charges based on quantity.

Other Domestic Resources

Inland Revenue Department of Hong Kong

Country Comparison For Corporate Taxation

Source: The World Bank - Doing Business, Latest data available.

Accounting System

Accounting Standards

The Hong Kong Institute of Certified Public Accountants (HKICPA) is empowered by the PAO to develop and issue Financial Reporting Standards (HKFRS) and Hong Kong Standards on Quality Control, Auditing, Assurance and Related Services (HKSA). These standards of accounting and auditing practices must be observed and applied by members of the HKICPA.

The Small and Medium-Sized Entities (SMEs) Financial Reporting Framework and Financial Reporting Standard issued by the HKICPA better meets the needs of users of SME financial statements. The HKFRS and HKSA have been developed to achieve convergence with IFRS.

Accounting Law

Accounting in Hong Kong is regulated by the HKICPA under the control of "Professional Accountants Ordinance" (Chapter 50, Laws of Hong Kong). Company Audit is regulated by Company Ordinance (Chapter 32, Laws of Hong Kong) and Securities and Futures Ordinance.

Difference Between National and International Standards (IAS/IFRS)

Domestic public companies whose securities are traded in a public market are required to use HKFRS, which are virtually identical to IFRS Standards. Companies incorporated outside of Hong Kong may choose to use either HKFRS or IFRS. IFRS for SMEs Standard is also adopted as HKFRS for Private Entities.

Accounting Practices

Tax Year

The financial year starts on 1st April and ends on 31st March of the following year.

Accounting Reports

BALANCE SHEET: on December 31 n, to be compared December 31 n-1.
FIXED ASSETS / CURRENT ASSETS: stocks, marketable securities, debtors' cash .
CURRENT LIABILITIES: finance lease obligations, proposed dividends, taxation, creditors' loans, bank overdrafts.
NET CURRENT ASSETS / LONG TERM LIABILITIES: deferred taxation obligations due to finance leases, bank loans.
SHAREHOLDERS EQUITY: capital reserves, retained profits.
PROFIT AND LOSS ACCOUNT: 1) Turnover; 2) Profit before tax; 3) Tax; 4) Retained profits at the beginning of the fiscal year; 5) Dividends; 6) Retained profits at the end of the fiscal year.

Publication Requirements

The law requires Hong Kong-incorporated companies to prepare audited financial statements. Although there is no requirement that private companies file annual financial statements with the Companies Registry, proper books of account must be kept and maintained at the company’s registered office. Companies must file annual returns specifying directors, members and the location of a registered office. Public companies must file annual accounts with the Companies Registry.

Accountancy Profession

Accountants

The Hong Kong Institute of Certified Public Accountants is the sole organization authorized to grant licenses to auditors and regulate the accounting profession in Hong Kong. This association governed by the Public Accountants Law (Professional Accountants Ordinance) maintains the register of its members and organises the exams for admission.

Professional Accountancy Bodies

The Society of Chinese Accountants and Auditors

Member of the International Federation of Accountants (IFAC)

Hong Kong is a member of the International Federation of Accountants (IFAC).

Member of Other Federation of Accountants

Bilateral agreements with the Institute of Chartered Accountants in England and Wales, the Institute of Chartered Accountants of Scotland, the Institute of Chartered Accountants in Ireland, the Institute of Chartered Accountants of Australia, the Canadian Institute of Chartered Accountants, the New Zealand Institute of Chartered Accountants, the South African Institute of Chartered Accountants and the Institute of Chartered Accountants of Zimbabwe.

Audit Bodies

Companies have to seek a statutory auditor to conduct an annual audit of the financial health of their organization. You can contact , or .

Allowable Deductions and Tax Credits

Business expenses, self-education expenses, home loan interest, mandatory provident fund (MPF) contributions and elderly residential care expenses are some examples of deductible items. Most of the deductions are capped at a specified limit. Separate personal allowances are provided depending on the individual's social situation. Elderly residential care expenses paid to a residential care home in respect of a parent or grandparent of a taxpayer or spouse are deductible up to a maximum of HKD 100,000. A deduction is allowed for self-education expenses paid for employment-related courses (capped at HKD 100,000/year). For the same year, contributions to a recognised occupational retirement scheme or an MPF scheme are deductible up to a maximum of HKD 18,000. Home loan interest paid can be deducted by a person if the property is owned by that person and is occupied by that person as their place of residence during the year of assessment, capped at HKD 100,000 per year for 20 years of assessment. Charitable donations made in cash to approved charitable institutions are allowable if the aggregated amount for a year of assessment is at least HKD 100, limited to 35% of the assessable income after allowable deductions of the year of assessment.

Several personal allowances are also available, including a basic allowance of HKD 132,000, an allowance of HKD 264,000 for married couples, HKD 260,000 for the first year of each child, plus HKD 130,000 for every following year, etc. For further information, consult the dedicated page on the website of the Hong Kong government, as well as the IRD website.

Special Expatriate Tax Regime

There is no special expatriate tax regime in Hong Kong. The source of income from an office is determined by the location at which the company paying the fees is centrally managed and controlled.
An individual who visits Hong Kong for no more than 60 days in a tax year (from 1 April to 31 March of the following year) is not liable to taxation on employment income.

Capital Tax Rate

There is no wealth or inheritance tax in Hong Kong. Capital gains are generally not subject to taxation. Hong Kong-sourced royalties received by resident individuals are taxable as business profits under profits tax.
Employees must contribute 5% of their monthly salary to the Mandatory provident fund (MPF), with a maximum contribution of HKD 1,500 per month. Employees whose monthly income is less than HKD 7,100 are not required to make mandatory contributions (the employers still have to contribute 5%).
Property tax is levied on the owner of land or buildings (excluding government and consular properties) in Hong Kong SAR at a fixed rate of 15% on the net assessable value of the property. The net assessable value is determined by subtracting rates paid by the owner and a 20% notional allowance from the consideration payable for the right to use the property. Properties used by the owner for personal occupancy are exempt from property tax since no rent is earned for such usage.
Stamp duty in Hong Kong SAR is charged on documents related to the lease, sale, or transfer of immovable property and shares. If property or shares are transferred below market value, stamp duty is based on the market value at the transfer date. For Hong Kong SAR shares, stamp duty is 0.2% of the transfer value (0.1% for each of the bought and sold notes), reduced from 0.26% and 0.13% as of 17 November 2023, with exemptions for certain intragroup transactions. Lease stamp duty rates are 0.25% for leases up to one year, 0.5% for leases between one and three years, and 1% for leases over three years. Ad valorem stamp duty (AVD) on non-residential property sales is capped at 4.25%, while for residential properties, AVD is a flat 7.5% with some exceptions. A special stamp duty (SSD) of 10% to 20% applies if residential property is sold within 24 months, and a 7.5% buyer's stamp duty applies to residential property purchases by non-Hong Kong SAR permanent residents, including limited companies. Effective from 28 February 2024, the rate of the Buyer’s Stamp Duty and of the Special stamp duty are reduced to 0%.
A duty on gambling (25%-75%) and air passenger departure tax (HKD 120 per person above 12 years of age) apply.

National Regulation and International Agreements

Equity of Judgments

Equal Treatment of Nationals and Foreigners

Yes

The Language of Justice

English, Cantonese, or both the languages at the same time.

Recourse to an Interpreter

Possible.

Legal Similarities

Hong Kong's judicial system continues to be based on the English Common Law and the Rules of Natural Justice of Great Britain. In order to maintain autonomy in its judicial system, HK-SAR shows its attachment to the primacy of the "rule of law" as the fundamental law. The judicial system works independently of the system of mainland China.

The Different Legal Codes

Checking National Laws Online

Basic Law full text

Other Useful Resources

Legislative Council

The Jurisdictions

Court Officials

Lawyers

Hong Kong lawyers can be barristers or attorneys but cannot combine both the functions. The term Barrister (practicing barrister) designates a lawyer whose main function is to represents parties in a Court. Attorneys (legal advisor) represent and advise their clients.

Customs Procedures

Import Procedures

When a cargo arrives at the port, even before the importer has taken possession, the products are inspected and occasionally sampled by the customs authorities. Once approved, the importer collects a “release” letter.
It is to be noted that the importer should file an "import declaration" with the "Customs and Excise Department", within 14 days from the import.
Documents required to facilitate Customs clearance are:

• manifests
• import / export licence or removal permit (if required)
• copy of detention notice (if applicable)
• other supporting documents such as bill of lading, airway bill, invoice, packing list etc.

For more information, please visit the website of Hong Kong Customs and Excise Department.

Specific Import Procedures

Local importers should purchase a licence in case they import products that are subject to import duties. A licence should be purchased for each import.
Click here to consult the database of articles subject to import or export control in Hong Kong.

Importing Samples

An inscription on the product should specify if it is a free sample and that it cannot be sold. The samples can be distributed freely.
Hong Kong is a signatory of the ATA Carnet convention. For further info, consult the Customs website.

Customs Duties and Taxes on Imports

Customs threshold (from which tariffs are required)

Hong Kong is a duty free destination. No duties or taxes are collected.

Average Customs Duty (Excluding Agricultural Products)

In line with the status of a Free Port, Hong-Kong does not impose customs duty on entry of general goods in its territory. Only some goods (such as tobacco, alcohol, hydrocarbon oil) are subject to excise duties.
For further information visit the Customs website.

Products Having a Higher Customs Tariff

Hong-Kong does not impose customs duties.

Preferential Rates

The Transshipment Facilitation Scheme between Hong Kong and mainland China enables mainland-bound consignments passing through Hong Kong to enjoy tariff reductions in China. Such arrangement covers goods traded between mainland China and certain trading partners (including ASEAN members, Australia, Bangladesh, Chile, Costa Rica, Iceland, India, New Zealand, Pakistan, Peru, South Korea, Sri Lanka, Switzerland and Taiwan).

Customs Classification

Hong-Kong applies the Harmonised Customs System.

Method of Calculation of Duties

Hong-Kong applies the Harmonised Custom Systems. The imports are managed by Customs and Excise Department. Due to its status of free port, Hong Kong does not impose customs duties on the entry of the general goods on its territory.

Method of Payment of Customs Duties

Duty has to be paid upon delivery of the dutiable goods from the importing carrier or bonded warehouse to local market. The Office of Dutiable Commodities Administration of the Department performs duty assessment on the dutiable goods.
For further details visit the Customs website.

Import Taxes (Excluding Consumer Taxes)

Honk Kong levies excise duties on items such as alcohol, tobacco products, hydrocarbon oil and methyl alcohol.
The import and export declaration fee is capped at HKD 200.
Consult the Hong Kong Customs and Excise Department portal for more information.

Labeling and Packaging Rules

Languages Permitted on Packaging and Labeling

English and Chinese

Unit of Measurement

Metric System.

Mark of Origin "Made In"

Obligatory.

Labeling Requirements

Labelling should be uniform and clear.

The product name (English + Chinese), ingredients or composition also in both the languages, should be mentioned.
Obligatory information for drinks, for example : name of the product, name and address of manufacturer, list of ingredients (in decreasing order of weight and volume), added products, indication if alcohol is there, its weight and volume in metric units, shelf life of the product (for more than 1.2% alcohol).

GMO (Genetically Modified Organic) labelling: till date, no legal obligation to indicate anything on biological order and GMO products.

Specific Regulations

Hong Kong’s nutritional labeling regulation took effect July 1, 2010. The regulation requires all prepackaged food sold in Hong Kong to label the product’s energy content plus seven nutrients: protein, carbohydrates, fat, saturated fat, trans fat, sodium and sugars. Packaged products which make claims such as “low fat” or “high in Vitamin A” must meet additional labeling and definitional requirements as uniquely spelled out in the legislation.

In May 2008 the Energy Efficiency Labeling Ordinance has been enacted for electrical appliances. It is intended to assist consumers in choosing energy efficient products. Click here for more details.

Distribution Network

E-commerce

Internet access

With almost 5.5 million internet users, Hong Kong has internet penetration rate of 74%.Hong Kong consistently ranks as one of the countries with the fastest online connections worldwide. Hong Kong is one of the most smartphone-friendly markets in the world. In 2017: 5.08 million people accessed the internet through their mobile phones. In 2022, the number of mobile phone internet users is projected to reach 5.71 million (Statista). The search engines market in Hong Kong is dominated by Google with a market share of 83.8%, followed by Yahoo with 13.6%. Bing has only a limited share of the market (1.4%).

E-commerce market

E-commerce is developing rapidly in Hong Kong as more retailers set up their online presence and shoppers change their consumption patterns and lifestyles. With more than 4.5 million e-shoppers, the e-commerce penetration rate in Hong Kong is at 59.8% in 2018 and is expected to hit 72.6% in 2022. E-commerce sales in Hong Kong have been steadily increasing, passing from US$ 2.9 billion in 2015 to an estimated US$ 3.7 billion in 2017 (+27%). E-commerce sales are forecast to continue rising with an annual growth rate of 10.2% to reach US$ 5.4 billion by 2021 (Statista). In 2017 there was a significant drop in the number of Hong Kong-based companies that do not have an omnichannel business strategy, with the rate passing from 21% in 2016 to 9%. Many traditional stores have established online purchasing platforms, such as Watsons, Wing On Department Stores and Chow Sang Sang. On the other hand, e-commerce platform HKTVmall has opened some concept stores in an experiment to find out the most applicable online-to-offline retail model in Hong Kong. These shops mainly serve as interactive billboards aimed at showcasing products available on HKTVmall’s website. Among the most popular online stores/marketplaces in Hong Kong are Alibaba’s Tmall, WeChat, Taobao, Amazon, JD, Alibaba and eBay. The boom in cross-border e-commerce with mainland China also offers huge growth opportunities for Hong Kong’s e-commerce sector.

Social media

As of third quarter 2017, 78% of the population were active social media users. The most popular social platform was Facebook with 3.5 million active users, followed by Youtube and Instagram (2.3 million). Whatsapp is the main messaging app (74% penetration rate) ahead of Facebook Messenger (45%) and WeChat (44%). Twitter and LinkedIn are not very popular among Hong Kong’s internet users, with a penetration rate of 19% and 16% respectively. According to a report by KPMG and GS1, Facebook is the most popular social media platform for Hong Kong’s companies, with 76% it for customer engagement, and 53% using it for sales. Second on the list in both categories is WeChat, with 48% for engagement and 35% for sales. YouTube and Instagram are used much more for customer engagement than sales activities: 47% of companies use YouTube to engage their customers, while only 15% use it for sales, while Instagram is used by 43% for engagement and 18% for sales.

Direct Selling

Evolution of the Sector

The World Federation of Direct Selling Associations (WFDSA) registered a 5.2% loss in 2017 Hong Kong retail sales closing the year at USD 342 million, although 203,344 independent representatives remain involved in the industry.

According to Euromonitor International, Hong Kong buyers consider direct selling to be time-consuming and energy-draining compared to digital options. Competitive pricing further stresses direct selling companies and an online presence will increasingly be needed to survive in the industry. Main players include Nu Skin Enterprise as the market leader and Mary Kay as the largest-growing company in 2017. In particular, Mary Kay's strategy involves social media use and celebrity endorsements. 2017 retail sales by product category were divided as follows: wellness (64%); cosmetics and personal care (28%); and household goods and durables (7%), according to the World Federation of Direct Selling Associations. Other direct selling companies in Hong Kong include Amway Hong Kong Limited; Best World Lifestyle (HK) Company Limited; Herbalife International of Hong Kong Ltd, Infinitus (Hong Kong) Company Limited; Mary Kay (Hong Kong) Limited; Nu Life International (Asia) Ltd; Nu Skin Enterprises Hong Kong, LLC; Unicity Marketing (HK) Co. Ltd; and USANA Hong Kong Lt.

The Direct Selling Association of Hong Kong has promoted best practices in the industry since 1979.

Commercial Intermediaries

Trading Companies

 

• Type of Organization

To penetrate the retail market, the best means is to go through a distributor who will buy your products for resale. You can also go through a trading company.

• Main Actors

Li&Fung Group, Hin Sang Hong Company Limited.

Wholesalers

 

• Type of Organization

Wholesalers are generally specialized in a certain type of large consumption goods (foodstuffs or others) or in industrial equipment and handicrafts.

• Main Actors

Hong Kong Wholesalers

Using a Commercial Agent

The Advantages

This is one of the best forms of Hong Kong market penetration. They are much less specialized than in Europe or United States, but they concentrate on one line of business.

Where to Be Vigilant

In Hong Kong, there is no legislation on agency contracts. Therefore care must be taken while signing the agency contract.

Elements of Motivation

The remuneration amount for an agent is an important motivating element.

The Average Amount of Commission

5 to 18%, based on the sectors.

Breach of Contract

Generally in the agency contracts, the industrial and commercial activities are restricted after cancellation of the contract.

It is advised to consult a local legal counsel when drafting contract terms.

Finding a Commercial Agent

Midland Estate, Find a sales agent
Alibaba

Setting Up a Commercial Unit

The Advantages

Although this establishment is expensive, setting it up in Hong Kong means opening a door to Asia, particularly for China with the signature of CEPA (Closer Economic Partnership Arrangement, free trade agreement between HK and China).

There is no restriction about foreign ownership in Hong Kong.

Where to Be Vigilant

Planned especially with a long term logic.

Different Possible Forms of Settlement

 

• A Representative Office

Like the branch, this is a means for a company to establish itself. However, a representative office can only exercise limited functions. This is a form of establishment which enables you to analyze the Hong Kong market before investing more.

For further information visit the Invest in HK website.

• A Branch Office

A branch can enhance its reputation of creditworthiness. Different from a representative office, a branch has greater liberty to operate and a more favorable tax treatment.

• A Company

A subsidiary can be freely established in Hong Kong. It offers a better guarantee for trademark protection, obtaining credit and penetrating markets.

For further information, visit the Hong Kong economic and commercial office site in Brussels.

Franchising

Evolution of the Sector

There is no specific franchising legislation that governs the offer and sale of franchises in Hong Kong. Neither are there exchange controls, foreign equity participation or local management participation regulations in place at the moment. Franchises in Hong Kong are not required to be registered with the Government of the Hong Kong Special Administrative Region or any trade associations. As a result, the offer and sale of franchises is subject to common law (with special regard to contract law principles), where the principle of caveat emptor (buyer beware) applies.
There are nearly 90 franchise brands present in Hong Kong. Of these franchise operators, 56% are local franchises. 42.7% of the franchises in Hong Kong are in catering business, 37.3% in services and 20% in retailing (Hong Kong Franchise Association, latest data available). Most franchise growth in recent years has been in real estate brokerage, quick service food and beverage operations, and learning centres. Quick service food and beverage concepts and concepts related to children, education and fitness are especially promising. However, the F&B sector reached a high degree of saturation; causing an early closure of several franchise concepts.
Hong Kong, with its open import market, excellent transportation and business infrastructure, serves as a regional distribution, logistics and marketing hub for many franchisors to service existing Asia Pacific franchisees.
Successful franchisors are those who understand the need to tailor products and services to local consumer tastes and the need to have a regional presence in Hong Kong to develop local business relationships, be in regular touch with the local franchisee to build the business, and fine tune the product offerings and services.

Some Big Franchises

Circle K, Neighbourhood store
Ikea, furniture
KFC, fast food
Pizza Hut, catering

Finding Assistance

Export Trading Companies

Pan Asian Trading Company

Recommended Resource

New Step International Limited - International Business Consulting

Asia Trade Hub

The industry contributes around 6.5% of the GDP (World Bank, 2019). Textiles and electronic components industries are the most important.

Due to a pattern of government disinterest in the electronics industry, Hong Kong has not been able to compete with other tech markets like Taiwan, Singapore and South Korea. However, a renewed interest in high-tech electronics by the current Government suggests potential for improvement. The present administration aims to make Hong Kong a center for software and information technology industries.

Type of Manufacturers

Original Equipment Manufacturers

These last years, Hong Kong companies have succeeded in the OEM segment. They shall face more and more competition from other Asian countries. This is why to remain ahead of competition, they have been directed towards the ODM segment. Some companies are seen developing in fabrication of branded products. According to a study of the Hong Kong Trade Development Council, 82% of the industrial companies questioned are involved in the OEM manufacturing.

Hong Kong OEMs are present in the watches, clock making and toys sectors.

Original Design Manufacturers

According to a study of the Hong Kong Trade Development Council, 62% of the industrial companies questioned were involved in ODM fabrication. The lack of intellectual property protection partly prevents ODM development. ODMs in Hong Kong are present in the electronic parts industry.

Subcontractors

Sub-contracting in Hong Kong is especially present in construction, production of electronic components and clothing.

Hong Kong multisector Business directories

Expat.com - Hong Kong business directory

HKG Business - Hong Kong business directory

HKTDC Sourcing - Database of Hong Kong services providers.

HKTDC Sourcing - Database of wholesale suppliers.

Hong Kong Exporter Directory - Hong Kong's suppliers directory

Hong Kong General Chamber of Commerce - Hong Kong business directory

Search engine of Hong Kong General Chamber of Commerce - Hong Kong business directory.

Zipleaf - Business directory for several countries in the world

Hong Kong Marketplaces

Sample of marketplaces incorporated in Hong Kong SAR, China (A to Z)

Upcoming Trade shows in Hong Kong SAR, China

Other Useful Resources

Trade Agencies and Their Representations Abroad

Chamber of Commerce of Hong Kong
Contacts abroad for Invest In HK

 

 

Finding Assistance

Recommended Resource

New Step International Limited- International Business Consulting

Main Useful Means of Transport

Hong Kong is one of the most important centres for logistics in Asia. Its airport is ranked globally as the best for freight and has the seventh largest container port in the world. Hong Kong International Airport has been the world’s busiest airport for 10 consecutive year since 2010. In 2019, it handled 4.8 million tonnes of total cargo throughput, which accounted for 42% of the total value of Hong Kong's external trade.
However, rapid growth has placed severe demands on this infrastructure. Thus, there is a need for major new investments over the next few years, particularly in transportation and shipping facilities. Significant developments include a planned expansion of container terminal facilities, additional roadway and railway networks.

Hong Kong's port is the seventh most significant container port in the world, and it handled 19,600 TEU (twenty feet equivalent unit) in 2018 (data World Shipping, latest data available). Its strategic position makes it the port of access to the Chinese market as well as an unavoidable transit point for international trade. Ship owners from Hong Kong control around 6% of the world's fleet. Details on Hong Kong's shipping data can be consulted on the portal of the Census and Statistics Department.

By Sea

Ports

Hong Kong Port

Government Transport Organisations

Marine Department

By Air

Airports

Hong Kong Airport

Transport Professionals

Cathay Pacific Cargo
Hong Kong Airlines

Government Transport Organisations

Hong Kong Airport Authority

By Road

Transport Professionals

Schenker

Government Transport Organisations

Transport Department

By Rail

Transport Professionals

MTR Freight
Kowloon-Canton Railway (KCRC)

Government Transport Organisations

Transport Department

Sole Proprietorship

Number of partners: 1 person
Capital (max/min): No minimum capital.
Shareholders and liability: Individual entrepreneur is liable for debts of the enterprise on personal goods.

Company Limited by Guarantee

Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are limited to the amount of contributions made to the shares of the company.

Unlimited Company

Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are unlimited and joint.

Private Limited Company

Number of partners: At least 1 partner or shareholder with a maximum of 50.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are limited to the amount of contributions.

Public Limited Company

Number of partners: At least 1 partner without maximum.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are limited to the amount of contributions.

General Partnership

Number of partners: Minimum 2 partners.
Maximum 20 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are unlimited for the debts and obligations of the association.

Limited Partnership

Number of partners: Minimum 2 partners.
Maximum 20 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: General partners are liable for all debts and obligations (unlimited liability). Liability of other partners is limited to the amount of contributions.

Business Setup Procedures

The Competent Organisation

Company register

For Further Information

Consult Doing Business Website, to know about procedures to start a Business in Hong Kong.
Trade Register

Financial Information Directories

Companies Registry - Information of companies and body corporates registered in Hong Kong

Dun & Bradstreet - Worldwide directory with financial information on businesses

Recovery Procedures

Principle

Only a business corporation can be liquidated. A request for reimbursement of debt against the company should be submitted. The Court can decide to order the liquidation of the company. The distribution of assets to the creditors is carried out and the company is dissolved.

Bankruptcy Laws

Company Ordinance,
Bankruptcy Ordinance

Reorganization and Rehabilitation Laws

Further info here.

For Further Information About the Labour Market

Statistics, regarding the education level of households and residents

Opening Hours

 

• Legal Weekly Duration

Between 40 and 48 hours

• Maximum Duration

Working hours a day: 8 hours (between 7 a.m. and 7 p.m. only).

Working hours: a week: 48 hours.

• Night Hours

After 1900 hrs.

Working Rest Day

One rest day per week.

Paid Annual Vacation

As per the work contract. 12 days of holiday are compulsory.

Retirement Age

There is no legal age for retirement, but the average age is around 62 years.

Child Labour and Minimum Age For Employment

16 years

 

Informal Labour Market

Weak.

Pay

Minimum Wage

According to the Hong Kong Labour Department, the minimum wage for non-domestic workers is HKD 37.5 per hour. This rate will be reviewed by the end of 2022. 

Average Wage

According to the Census and Statistics Department, the gross median monthly employment wage is HKD 18,700 in 2021.

Other Forms of Pay

• Pay For Rest Days Worked

Prohibited.

• Pay For Overtime at Night

Prohibited.

Social Security Costs

The Areas Covered

Employees subscribe to mandatory provident funds that are run privately. These generally cover universal allowances, mandatory occupational benefit and social assistance (including medical benefits). A government social security scheme is administered through the SWD for the financially vulnerable only.

Contributions

Contributions Paid By the Employer: Employers are required to deduct 5% and contribute a further 5% to the Mandatory Provident Fund (MPF), calculated on a maximum income of HKD 30,000.
Contributions Paid By the Employee: For employees with monthly income above HKD 7,100, a 5% withholding tax (capped at HKD 1,500) is levied as contribution to the Mandatory Provident Fund (MPF).

Competent Organization

Mandatory Provident Fund Schemes Authority
Social Welfare Department

Recruitment

Method of Recruitment

Depends on the sectors. Face to face remains the standard.

Recruitment Agencies

Recruitment agencies in Hong Kong.

Recruitment Websites

Hong Kong Jobs
Monster HK

The Contract

Dispute Settlement

Social Partners

Employer Associations

EFHK - Employers Federation of Hong Kong

Social Dialogue and Involvement of Social Partners

Hong Kong Confederation of Trade Unions - (HKCTU) gathers several trade unions. Their power remains very weak.

Unionisation Rate

The unionization rate was about 23.6% in 2011.

Labour Unions

Hong Kong Federation of Trade Unions (HKFTU)

Regulation Bodies

Labour Department

FDI STOCKS BY COUNTRY AND SECTOR

Source: Hong Kong Statistics Office, Latest data available.

Strong Points

Hong Kong is an international leader in terms of international trade, a services centre with high added value and the bridgehead to one of the largest production bases in the world, China. Hong Kong has a sound economy and a stable and efficient financial and banking system. Key strong points for FDI in Hong Kong include:

• Favourable tax measures
• The transparency of local institutions 
• Freedom of information 
• Availability of qualified human resources  
• Its advantageous geographical location in Asia

Weak Points

Disadvantages for FDI in Hong-Kong include:

• High cost of property and work space (offices, shops, etc.)
• High cost of salaries, compared to other Asian countries such as Mainland China and India
• The excessive importance of the financial sector in national economy

Government Measures to Motivate or Restrict FDI

Hong Kong is a free territory for investments, which are in fact encouraged by the government with a favourable taxation policy and light legislation. Foreign companies can be set up freely, register their brands and the director of the company doesn't have to be a citizen nor a resident of Hong Kong. The government has also put in place numerous initiatives to support business innovation.

Bilateral Investment Conventions Signed By Hong Kong SAR, China

To see the list of investment treaties signed by Hong Kong, consult UNCTAD's International Investment Agreements Navigator.

International Controversies Registered By UNCTAD

Refer to UNCTAD's Investment Dispute Settlement Navigator.

Organizations Offering Their Assistance in Case of Disagreement

ICCWBO, International court of arbitration, International chamber of commerce
ICSID, International Center for Settlement of Investment Disputes

Member of the Multilateral Investment Guarantee Agency

China is signatory of the MIGA convention .

Food Specialties

Hong Kong's cuisine is mainly based on Cantonese culture, with some Western influences from its British colonial past.

Dim Sum is popular style of food. It is a variety of dumpling dishes and entrees that are traditionally served in steamed bamboo baskets. Some examples include:

Har Gow: steamed dumplings filled with chopped shrimp
The hundred year eggs: a popular dish found in Hong Kong's cuisine. The eggs age for two or more months, in a mixture of lime-rich mud, tea, ash and sodium bicarbonate. Their meat becomes translucent, bluish-green in colour.
Spring rolls: Deep fried rolls that are eaten during Yum Cha. The stuffing can depend on the availability of ingredients, preferences of the cook, the time of year and any other variations. They range from simple to complex.
Char Siu Spareribs: very tasty pork dish.
Congee: savoury sticky rice porridge.

Drinks

A wide choice of drinks are available. This almost always include yuanyang, a popular mixture of tea and coffee, or a cocoa drink with lemon-coated ginger. The orders are usually given on a notepad at your table and you pay in cash at the time of leaving.

Dietary Restrictions

There are no food restrictions in the country.

Table Manners

Be rather relaxed in Hong Kong, although there are some etiquette rules. If in doubt, observe what others do. For sitting at the table, wait till you are offered a seat, and preferably wait till your host has started to eat or invites you to start the meal.

As in China, the dishes are most often laid at the center of the table on a turntable. It is acceptable to taste everything. It is common to use chopsticks, but as a foreigner it is valid to ask for a fork and knife. In South China as in Hong Kong, it may be common to wash the chopsticks and bowl (serving dish) with tea offered on the table. Wait and observe before drinking this tea because it is for cleaning and not to be served as a drink.

Means of Transport Recommended in Town

Urban transport services

KMB
Hong Kong Tramway Limited
MTR
The Hong Kong and Kowloon Ferry Ltd

Find an Itinerary

Hong Kong MTR Maps

Taxi services

Forum of taxi associations on the website of the Transport Department

Transportation From Airport to City Centre:

Means of Transport Recommended in the Rest of the Country

Train reservation services

MTR Light Rail

Major airlines

You Can Consult The EU Air Safety List. Look Also at the rating of the United States Federal Aviation Administration (FAA).

Travelling By Yourself

Car rental agencies

Hertz

Rules of the Road

National Roads Organizations

The Hong Kong Road Safety Association (HKRSA)
Road Safety Council

Telephone Codes

To Make a Call From Hong Kong SAR, China, Dial 001
To Make a Call to in Hong Kong SAR, China, Dial +852

Mobile Telephone Standards

GSM; UMTS; CDMA; PCS

National Mobile Phone Operators

CSL; New World; Smartone-Vodafone; Sunday People; CITIC Telecom 1616; Hutchison Telecom/3 (3G); CSL 3GSmarTone Mobile Comms/Smartone-Vodafone; China Unicom (MVNO); China Motion Telecom; New World PCS; China Mobile Peoples Telephone Company; SMT (UMTS); PCCW Mobile (PCCW Ltd)

Availability of Internet

Internet Suffix

.hk

Different Forms of Tourism

Historical

Hong Kong has a mixture of both Chinese and colonial history. If you are interested in sites that are centuries old, you should visit Lai Chi Wo, a 400 year old village. You may also visit the Tai Fu Tai mansion to see how the Chinese elite lived during the 19th century. If you are interested in Hong Kong's colonial past, there are many sites around the city. For example, he Foreign Correspondents Club is a historic building that is still used today by journalists and diplomats. For more sites, click here.

Cultural

The Cantonese Opera is an important style of Chinese performance art, and it originates from the Cantonese culture of Southern China. The Opera symbolises a national identity that arrived with the first wave of immigrants from Shanghai in the 1950s. The Sunbeam theatre is one of the most traditional places to see it.

Many festivals and exhibitions take place during the year. There is a very large variety of museums which explore different themes. The most popular is the Hong Kong History Museum which provides an excellent glimpse of the fascinating history of Hong Kong. For more information, click here.

Nature

Hong Kong is not just made up of ‘skyscrapers’. In fact, more than 70% of Hong Kong is undeveloped land, including marine parks. There are many outdoor activities available throughout the country. Try visiting Victoria Peak, the highest point in Hong Kong. You may also go to Po Lin Monastery on Lantau Island to see a 34 metre tall statue of the bronze Tian Tan Buddha.

Religious

Buddhism and Taoism have a very high number of followers and there are more than 600 temples in Hong Kong.

Beach

Hong Kong has a long coastline abundant with beaches. A good number of among them are covered by mountains, since Hong Kong is a mountainous place. As a result, waves are quite small. Consult the list of beaches on Leisure and Culture Service Department.

Outdoor Activities

Rambling, diving, hiking, mountain bike, bowling greens, golf. Website of the Leisure and Culture Service Department presents different outdoor activities.

Shopping

Hong Kong is famous for its fantastic shopping opprtunities. Shopping places vary from low range products to more luxurious stores. For example, Mongkok, Tsim Sha Tsui, and Causeway Bay are three well-known and popular shopping districts.

Tourism Organisations

Hong Kong Tourism Board

Cultural Organizations

Leisure and Cultural Services Department