What Are the Types of Businesses That Can Be Set Up in Hong Kong?
- Kristina Coluccia
- Apr 11
- 3 min read
Hong Kong is one of the most dynamic and open economies in the world, making it an ideal location for entrepreneurs, SMEs, and multinational corporations alike. But before starting operations, it’s important to choose the right business structure based on your goals, risk profile, and tax planning.
In this guide, we explore the main types of businesses that can be set up in Hong Kong, along with their advantages and key characteristics.
1. Private Limited Company
The private limited company is the most popular business structure in Hong Kong, especially for foreign investors and startups. It’s a separate legal entity from its owners and offers limited liability, tax advantages, and scalability.
Key features:
Limited liability protection for shareholders
Eligible for corporate bank accounts and tax benefits
Can be 100% foreign-owned
Requires at least one director and one shareholder
Subject to annual filing, audit, and tax requirements
Best for: Entrepreneurs, SMEs, and international companies seeking credibility, protection, and growth potential.
2. Sole Proprietorship
A sole proprietorship is the simplest and least expensive business structure to establish. However, it does not provide a separate legal identity, and the owner assumes full liability for debts and losses.
Key features:
Easy and low-cost registration
Profits taxed as personal income
No separation between personal and business assets
Best for: Freelancers, consultants, or small businesses with minimal risk and capital needs.
3. Partnership
A partnership involves two or more people jointly operating a business. It can be set up as a general partnership or a limited partnership, where the latter offers partial liability protection to certain partners.
Key features:
Shared ownership and responsibilities
Profits taxed at personal income levels
Less regulation than limited companies
Best for: Small businesses with multiple owners who want to share responsibility and profits.
4. Branch Office
A branch office is an extension of a foreign parent company. It is not a separate legal entity and the parent company is fully liable for its activities.
Key features:
Can conduct profit-generating activities
Must register with the Companies Registry
Must file annual returns and audited accounts
Best for: Established overseas companies seeking to expand directly into Hong Kong while maintaining control.
5. Representative Office
A representative office is suitable for non-commercial activities such as market research, sourcing, or liaison work. It cannot engage in profit-making operations.
Key features:
No separate legal status
Cannot sign contracts or trade
Easy to set up, but limited in function
Best for: Foreign companies testing the market or coordinating regional activities without full operations.
Choosing the Right Structure for Your Business
Each structure has its pros and cons depending on your business goals, size, risk tolerance, and regulatory requirements. Most entrepreneurs opt for a private limited company due to its flexibility, limited liability, and tax efficiency.
If you're unsure which structure best fits your business model, a professional advisor can help assess your needs and guide your decision.
How Woodburn Can Help You Set Up the Right Business in Hong Kong
Woodburn Accountants & Advisors offers expert guidance on choosing and registering the most suitable business structure in Hong Kong. Whether you're launching a startup, establishing a branch, or testing the market, our services include:
Business structure consultation
Company incorporation and registration
Compliance with local laws and tax requirements
Ongoing accounting, secretarial, and advisory support
We make it easy to enter and grow in the Hong Kong market with complete peace of mind.
Contact Woodburn today to explore your business setup options and get expert support from day one.
Woodburn Accountants & Advisors is one of China Hong Kong’s most trusted business setup advisory firms.
Woodburn Accountants & Advisors is specialized in inbound investment to China and Hong Kong. We focus on eliminating the complexities of corporate services and compliance administration. We help clients with services ranging from trademark registration and company incorporation to the full outsourcing solution for accounting, tax, and human resource services. Our advisory services can be tailor-made based on the companies’ objectives, goals and needs which vary depending on the stage they are at on their journey.
