Companies that decide to open a representative office in Hong Kong will do so before incorporating any other type of company, as a preliminary step and an opportunity to test the Hong Kong market.
This establishment, also known as a liaison office, cannot perform business or produce income for the mother company but important research activities can be performed from here.
The registration procedure for a representative office in Hong Kong is much simpler compared to that required for all other types of companies. The representatives at our Hong Kong law firm can help you register and start your activities within a liaison office.
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The use of a representative office in Hong Kong
The representative office does not have legal status and cannot perform any activities that would generate profit for the company abroad. However, it is useful for companies that are unsure of how their services would be perceived in the Asia-Pacific region and need to conduct a research before making any important investments in the area.
The representative office can perform the following activities:
– promotion for the foreign company,
– marketing research and connected activities,
– establishing a relationship with possible Hong Kong customers and business partners.
The branch is another option for foreign companies that want to enter the market. Unlike the representative office, these are able to perform business activities, however, the scope of their commercial activities is limited to the ones performed by the company abroad.
Incorporating a representative office in Hong Kong
The representative office does not need to be registered with the Companies Registry in Hong Kong, however, it will need to have a valid Business Registration Certificate from the Inland Revenue Department.
The office can hire employees and may enter certain types of agreements, although their scope is limited. Examples include those with various utility providers or rent agreements.
Because the activities of the representative office are very limited, this type of establishment does not need to observe the unusual taxation requirements. Also, no annual tax returns are required.
If your company could benefit from setting up a liaison office, contact our law firm in Hong Kong for detailed information and legal assistance for the incorporation procedure.