Overview of company structures

Generally, the most common types of business entities used by most of the foreigners who do so in Hong Kong are business entities such as sole proprietorships and partnerships. However, some also choose to set up limited liability companies and foreign service offices.

Limited Liability Company
In Hong Kong, one of the most prominent business entities is the limited liability company.

The advantage of owning such a company is that it keeps the owner’s personal assets protected from any kind of business risks and liabilities. A limited liability company is regarded as a separate legal entity.

Sole Proprietorship
This type of business entity is usually suitable for small and medium enterprises (SMEs) and is best suited to those who cannot afford too much loss, as well as those who want a low-risk business with a sole owner. However, for entrepreneurs, this business structure is not recommended due to the fact that it does not protect the owner’s personal assets from business liabilities.

Partnership
Two or more people can be the owners of a single business in this type of business structure. In partnerships, the responsibility is shared between the owners. The ability to raise funds is also increased. However, the partners are jointly and individually liable for the actions of the other partners. In general, the most common form of partnership found in Hong Kong is a limited partnership because such a partnership offers limited liability to the limited partners.

Foreign Company Office
Most of the foreign companies which show interest in setting up an office in Hong Kong can register a branch office, subsidiary, or representative office.