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1.1.1. Main Forms of Doing Business

Hong Kong law provides for a range of business forms based on the needs of the investor. These include:

Limited Company

A Limited Company is the most commonly-used company type, and may be private or public. As a Hong Kong incorporated company, a limited company is a separate legal entity, which provides the typical protection of personal assets from business risks and liabilities. In addition, they provide access to the benefits of the Closer Economic Partnership Arrangement (CEPA), a free trade agreement between Hong Kong and Mainland China.

Limited companies can be established as limited by share or limited by guarantee.

Partnership

Partnerships in Hong Kong can be either general or limited and are simply defined under law as persons carrying on a business in common with a view of profit. They are unincorporated.

Sole Proprietorship

Sole proprietorships in Hong Kong are unincorporated businesses of a single individual conducting business with unlimited liability.

Foreign Company Offices

The following introduces the options exclusive to foreign companies.

Subsidiary

A subsidiary is basically a private limited company incorporated in Hong Kong with 100% ownership by its foreign parent company. It is the most common option employed by foreign companies looking to establish in Hong Kong. Subsidiaries are independent entities and may conduct full business operations in HK, including gaining benefits of CEPA.

Branch Office

A branch office of a foreign company is a legally incorporated entity. Branch offices may conduct full business operations, but unlike a subsidiary, a branch office is not a separate legal entity from its parent company.

Representative Office (Rep. Office)

A Rep. Office represents the interests of the foreign investor by acting as a liaison office for the parent company.

Joint Ventures

Joint ventures are not a defined entity type per se, and Hong Kong places no restrictions on foreign and local parties jointly conducting business. Such ventures can be in the form of jointly held incorporated companies or partnerships.