*What Are The Business Structures In Hong Kong?
This is the best time for you to join the growing women entrepreneurs in Hong Kong. According to Anna Wong, the co-founder of Female Entrepreneurs Worldwide, having women join the world of entrepreneurs in Hong Kong creates employment and opportunities in the region. Based on the interview published on TheLoopHK.com, you can contribute to the general economy of Hong Kong by simply following your dreams of starting your own company.
Although some people think that women are too emotional, that does not mean they cannot hold their own when starting a company. Women are more than able to make logical decisions that can affect the prospects of their business. One should not belittle them just because of gender.
In fact, an article published in the South China Morning Post revealed that around half of the entrepreneurs in this city are women. Not only that, a lot of them are wealthier than their male counterparts. In case this is not enough to encourage you to pursue your dreams of entrepreneurship, then we don’t really know what will.
If you want to become one of the female entrepreneurs in Hong Kong, you need to start by figuring out which among the business structures you will use for your company. This should be an easy decision because there are only three business structures in Hong Kong.
Different business entities in Hong Kong
There are the three entities that you can choose from when setting up your business in Hong Kong. It is usually characterized by the ownership in the company:
This business structure will only have you as its operator and shareholder. Nobody gets to call the shots – it’s all on you. Of course, that also means you will bear the weight of the responsibility and accountability. In terms of registration and setting up, this is the easiest of the business structures in Hong Kong. You simply have to go to the Inland Revenue Department and Business Registration Office. The certificate will cost you around HK$450 for a year or HK$4550 for three years. You also have to meet compliance requirements regularly.
This is the next business structure that you can choose. This means you have someone with you – to share the load of financing, setting up, and growing the business. You need to be aware of the Partnership Ordinance to understand how you and your partners are liable and responsible for the company. In this structure, you get two further options.
- Limited Liability. This means the authority of the partners is proportionate to their capital investment.
- Unlimited Liability. This means one or two partners can be vested with unlimited authority – regardless of their capital contribution.
When it comes to processes, this will be a bit more complicated than a sole proprietorship. You need to get the consensus of everyone before you can act on anything. However, you get to benefit from the shared capital, talents, skills, and wisdom – despite the differences. In terms of registration, you also need to go to the Business Registration Office and the Inland Revenue Department to secure your permits and license to operate as a business. The fees are the same as a sole proprietorship. In terms of compliance, this business structure will require you to go to the Companies Registry for any registration amendments.
This is the last of the business structures that you can choose from. It is a type of ownership that gives two individuals or two entities joint ownership of the company. This uses business models to organize and create a working structure for the company. That makes it more complex that the first two. Sometimes, joint ventures start out as projects. When the individuals or entities involved see a potential, they can decide to turn the project into something permanent.
How to choose the type of structure for your Hong Kong business
In case you are unsure which of the business structures in Hong Kong you will choose, here are some helpful tips:
- Do you have enough capital to fund your business? Of course, you can try to get enough funding from investors or you can borrow a loan to finance your business. But if these fail to give you enough, then you might have to search for partners who are willing to stake their money for your business. A partnership or joint venture would make more sense than a sole proprietorship.
- Can you handle all the business decisions? Expertise and skill play an important role in any business. You have to know the industry that you want to play in. If you know that you are not really an expert, then a sole proprietorship might endanger the potential of the business. Get someone who can add to your expertise for a better chance at surviving entrepreneurship.
- Are you aiming for a big-scale or small-scale company? For the latter, a sole proprietorship would do. But if you intend to play with the big companies in Hong Kong, you might need to go for a partnership or a joint venture. Unless you can come up with enough capital funding and possess the experience to run a big-time business alone, it is best to have a partner to help you out in all aspects of company building.
- Do you work well with others? If you want to call the shots and you dislike having someone meddle in your affairs, then a sole proprietorship is the best option for you. But if you think that you can be a team player, it is all right to consider the other business structures.
Answer these questions truthfully and you should be able to identify which of the business structures in Hong Kong suit your business goals best.