Hong Kong remains one of the world's most business-friendly jurisdictions. A low and simple tax system, a common law legal framework, no restrictions on foreign ownership, and a physical and financial proximity to mainland China make it a persistent first choice for international companies entering Asia.
This 2026 guide covers everything a foreign company or individual needs to know about setting up in Hong Kong: the most common structure (private company limited by shares), step-by-step incorporation, key requirements, the tax position including the offshore profits exemption, and ongoing compliance obligations.
Why Set Up a Company in Hong Kong in 2026?
Step-by-Step: How to Incorporate a Company in Hong Kong
The standard vehicle is a private company limited by shares, incorporated under the Companies Ordinance (Cap. 622). The process is:
Key Requirements: Setting Up a Private Limited Company in Hong Kong (2026)
Hong Kong Corporate Taxation 2026 — What You Need to Know
The Offshore Profits Tax Exemption: What It Is and How It Works
Hong Kong operates a territorial tax system. Only profits that arise in or are derived from Hong Kong are subject to profits tax. This is not an automatic exemption — a company must formally apply to the Inland Revenue Department (IRD) with its tax return, demonstrating that:
If the claim is accepted, the relevant profits are exempt from Hong Kong profits tax. This makes a Hong Kong company a genuinely tax-efficient vehicle for certain international trading and holding structures — particularly when combined with Hong Kong's double taxation agreements with mainland China and other jurisdictions.
Important caveat: the IRD scrutinises offshore claims carefully, and the basis for granting or rejecting them has evolved. Structures relying on offshore exemptions should be reviewed against current IRD practice and documented properly. This is not an area to approach without professional guidance.
Corporate Bank Account Opening in Hong Kong: Tighter Than It Used to Be
Incorporation is fast. Banking is not. Hong Kong banks have significantly tightened KYC and AML requirements since 2016, and the process for a newly incorporated foreign-owned company can take four to eight weeks — longer for complex structures or businesses in higher-risk sectors.
Banks typically require:
Experienced local support makes a material difference. Established relationships with banks, familiarity with what documentation is required upfront, and understanding of which institutions are more receptive to specific business types all reduce the risk of delays.
Ongoing Compliance: What a Hong Kong Company Must Do Each Year
How Alpadis Hong Kong Helps Foreign Companies and Private Clients
Karen Leung, Managing Director of Alpadis Hong Kong, who established the office in 2013, notes: "Hong Kong's fundamentals — the tax position, the legal system, the China connection — remain compelling. What has changed is the compliance burden. The companies that run into problems are those that incorporate without setting up the administrative and compliance infrastructure properly from day one."
Alpadis Hong Kong (a Registered Trust Company and Licensed TCSP) provides:
The office also provides serviced offices and meeting rooms in Wanchai, which is relevant for companies that need a physical presence for client meetings or banking without the cost of a dedicated lease.
Ready to incorporate in Hong Kong? Please contact Alpadis Hong Kong for a no-obligation consultation.
Frequently Asked Questions
Can a foreigner own 100% of a Hong Kong company?
Yes. There is no requirement for a local shareholder. 100% foreign ownership is permitted, and the shareholder can be the director of the company.
Do I need a local director in Hong Kong?
No — unlike Singapore, Hong Kong does not require a locally resident director. This is a practical advantage for foreign businesses without local staff, allowing overseas directors to manage the company efficiently.
How long does it take to incorporate a company in Hong Kong?
The Companies Registry typically takes 5 working days to grant the application and issue the certificate of incorporation, with the Business Registration Certificate issued on the following day. Same-day incorporation is available through Alpadis’ express service; contact the team for details.
What is the corporate tax rate in Hong Kong in 2026?
8.25% on the first HK$2 million of assessable profits, and 16.5% on profits above that threshold. The two-tier rate applies to qualifying corporations; only one entity per group may use the reduced rate. There is no capital gains tax, no dividend withholding tax, and no GST or VAT.
What is the offshore profits exemption and how do I qualify?
Hong Kong taxes only profits arising in or derived from Hong Kong. If a company’s business activities — decision-making, contract negotiation and execution — take place entirely outside Hong Kong, those profits may qualify for exemption from profits tax. A formal claim must be lodged with the Inland Revenue Department alongside the tax return. The claim is reviewed by the IRD; it is not automatic, and the burden of proof lies with the taxpayer.
Is Hong Kong still a viable option for doing business in 2026?
Yes. The tax system, legal framework, regulatory standards, and geographic position remain strong structural advantages. For most international businesses, Hong Kong continues to function effectively as an operating base and regional holding location, particularly for China-related activity.
Is a company secretary mandatory in Hong Kong?
Yes. Unlike Japan and some other jurisdictions, Hong Kong requires all companies to appoint a company secretary who is resident in Hong Kong (or a Hong Kong-incorporated corporate secretary). This role handles statutory filings, maintains company records, and ensures ongoing compliance. It is typically outsourced to a licensed TCSP.
Hong Kong or Singapore — which is better for my company?
The right choice depends on your business nature and geographic focus. For family office establishment, Hong Kong has become the dominant hub in Asia - no minimum AUM requirement, no SFO licence or registration required, no GST or VAT, a two-tier profits tax system with offshore profits exemption, and no requirement for a locally resident director. The overall regulatory and filing burden is also lower than Singapore's, making it more cost-efficient and flexible in practice. Many larger international groups maintain entities in both jurisdictions. The key differentiator is usually the primary business or wealth connection - mainland China favours Hong Kong; Southeast Asia generally favours Singapore.
