In the recent years I’ve spent a great deal of my time travelling and living outside of Germany. After officially giving up my registered address in Germany when it was clear I wouldn’t return permanently very soon I however had a problem - you cannot have a freelancing business in Germany without actually living there.
It was about time to decouple my business from my personal physical location.
After some research I chose Hong Kong as the place where my new business should be registered, for these reasons:
- A Hong Kong Limited is independent of my personal place of living. From now on I can move houses and change countries without having to worry about moving my business.
- Hong Kong has a reliable legal system with european roots and ranks high on every list measuring the ease of doing business.
- It’s just a two hours flight from Manila, and ideally located for a quick stopover on flights from there to Europe.
- The whole process of setting up the company is simple, fast, and not overly expensive.
- The Hong Kong Dollar is a stable currency that’s not tied to the Euro. I’m a fan of the Euro but look at the EUR/PHP exchange rate chart over the last year or so and you will understand why I don’t want to put all my eggs into that basket anymore.
- Low corporate taxes and territoral taxation. Only profits sourced in Hong Kong are taxed, whatever a Hong Kong business earns elsewhere in the world is tax free. So as long as I don’t serve clients in Hong Kong, my company won’t have to pay any taxes at all.
- Last but not least, Hong Kong doesn’t have that shady image of some other common ‘offshore’ locations like the Seychelles, the Channel Islands or Belize.
Add in the fact that Hong Kong is an amazing city well worth a visit or two, and you can see that a Hong Kong Limited is an ideal fit for the so-called digital nomads.
How to Set Up a Hong Kong Limited
Unless you are planning to stay in Hong Kong for a few weeks or longer and are willing to learn a lot about how the local administration works, I’d strongly suggest you go with an agency to handle the company setup for you. This comes at a price for sure, but in most cases you will be better off working on your core business instead of saving a few bucks by doing the registration on your own.
Whichever way you go, you will definitely need a Hong Kong office address and appoint a local company secretary, both of which are conveniently provided by the same agencies that also handle the company setup.
After some research I went with Bridges. With around HKD 10.000 for initial company setup and HKD 4.500 per year for the virtual office / company secretary bundle they are definitely not the cheapest option around, but from the very first email until now they made a totally professional and trustworthy impression. The Bridges main office is located at the heart of Hong Kongs central business district, which is also where the virtual office of your company will reside.
All in all the process of setting up my Hong Kong Limited with Bridges was a totally painless experience. My contact at Bridges, Alex Lo, patiently answered all my questions in a very timely fashion.
Here’s how it went, step by step:
- I got in touch with Bridges via their website, indicating I want an ‘all new hk limited’. Next I received an email from them explaining options and how to proceed.
- After some back and forth and lots of questions I chose the ‘silver plus’ virtual office plan, which includes storage/forwarding of physical mail and the company secretary for a year, leading to a total price of HKD 16.250 for formation of the company and first year’s running costs, which I paid through the provided payment link (Wire transfer would also have been also possible, but naturally takes a few days longer).
- With the payment completed I sent a photo of my passport, proof of residency1 and their filled out contract form via email to Bridges.
- After receiving the payment and my documents, Bridges prepared all the paperwork for the company formation and sent it to me via email the next day for proof reading and signing. To avoid any mistakes Alex had me email him snapshots of the signed pages to check if I did it correctly.
- I sent the properly signed documents by courier to Bridges in Hong Kong, where they arrived two days later. Two weeks later the company was set up and I could pick up my company kit2 at the Bridges office.
Of course a proper company should have a bank account, and this is the second step after the formal registration is completed. Here’s how opening a bank account in Hong Kong went for me.
Oh, and if after reading this you decide to go with Bridges to open your own Hong Kong Limited - mention that I (Jens Kraemer / Electric Things Limited) sent you and you will get a discount of HKD 500! Full disclosure: I’ll get the same amount.