Essentially, all businesses in Hong Kong must obtain a business registration certificate from the Inland Revenue Department (the “IRD”) and display a valid certificate at the place of business. Businesses in the form of sole proprietorship and partnership have to be registered with the IRD. Registration must be done within a month of commencement of business. Note that you can only register your business after commencement, any application to register a business yet to commence operation would not be accepted by the IRD. If you failed to register your business, you will be liable to a fine of $5,000 and to imprisonment for 1 year. Registration Procedure Choose an appropriate business name You can register a Chinese name, an English name, or both. You can register a Chinese name with English alphabets but not English words. There are certain symbols you can include the name(s). There are also limitations, for example: The name must not suggest that business is incorporated with limited liability when it is in fact not;The name must not suggest a connection with the Government or any public body when no such connection exists or has existed; andFor an incorporated business with limited liability, its business name must not give the impression that the incorporation is done under a different name. E.g., an incorporation named “John Doe Ltd” cannot be registered under the business name “ABC Ltd”. How to Register? Below are the general steps to register your business–you have to: complete the prescribed application form pay the business registration fee & levy; andproduce your proof of identity https://www.ird.gov.hk/eng/tax/bre_abr.htm#a3ty. Registration of a limited partnership with Company Registry On top of business registration with the IRD, limited partnership must be registered with the Companies Registry using the prescribed form. Otherwise, it would be considered a general partnership. Registration of a limited

When starting a business, one of the most important steps is to select the right legal structure for your business. In Hong Kong, the most commonly-used business vehicles are sole proprietorships, partnerships and limited companies. Sole proprietorship A sole proprietor is also known as a sole trader. It is an unincorporated business where the business is owned and operated by a single individual. Its key features are: there is no concept of a separate legal entity i.e. there is no legal distinction between the business and its owner; the liability of the owner is not limited i.e. the owner can be held personally responsible for all the liabilities; and the sole proprietor can keep all profits but also be completely responsible for all the liabilities incurred by the entity. A sole proprietorship is ideal if you are looking for: Low-cost and quick set up;Operating a small business; and Running a business with low or no risk. Pros of sole proprietorship Cons of sole proprietorship It is the most flexible and simplest business structure with low administrative costIf the business fails, the sole proprietor will have no protection of personal assetsThe registration procedure is simple. See further in the FAQ on companies - business registrationIf the sole proprietor dies or becomes seriously ill, the business will automatically come to an endThe business owner has full control over policies, capital investments, business operations and profitsIt is hard to raise additional capital from investors as they are generally wary of unincorporated entitiesIt is simple to close down the businessMinimum tax reporting (File annual tax return with the Inland Revenue Department); and the profits are taxed at sole proprietor’s marginal tax rate, which may be lower than tax rate for a limited company.To understand more about tax rates, you can read ‘How does the profits tax regime work in Hong Kong?’ Since sole proprietorship is easy to set up, small