Operating a Business

Hong Kong SAR, China: Operating a Business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

Legal Forms of Companies

Sole Proprietorship: Number of partners: 1 person
Capital (max/min): No minimum capital.
Shareholders and liability: Individual entrepreneur is liable for debts of the enterprise on personal goods.
Company Limited by Guarantee: Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are limited to the amount of contributions made to the shares of the company.
Unlimited Company: Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are unlimited and joint.
Private Limited Company: Number of partners: At least 1 partner or shareholder with a maximum of 50.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are limited to the amount of contributions.
Public Limited Company: Number of partners: At least 1 partner without maximum.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are limited to the amount of contributions.
General Partnership: Number of partners: Minimum 2 partners.
Maximum 20 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Their liabilities are unlimited for the debts and obligations of the association.
Limited Partnership: Number of partners: Minimum 2 partners.
Maximum 20 partners.
Capital (max/min): No minimum capital.
Shareholders and liability: General partners are liable for all debts and obligations (unlimited liability). Liability of other partners is limited to the amount of contributions.

Business Setup Procedures

Setting Up a Company	Hong Kong SAR, China	East Asia & Pacific
Procedures (number)	2.00	7.25
Time (days)	1.50	29.73

Source: Doing Business - Latest available data.

The Competent Organisation: Company register
For Further Information: Consult Doing Business Website, to know about procedures to start a Business in Hong Kong.
Trade Register

Financial Information Directories

Companies Registry - Information of companies and body corporates registered in Hong Kong

Dun & Bradstreet - Worldwide directory with financial information on businesses

Recovery Procedures

Principle: Only a business corporation can be liquidated. A request for reimbursement of debt against the company should be submitted. The Court can decide to order the liquidation of the company. The distribution of assets to the creditors is carried out and the company is dissolved.
Bankruptcy Laws: Company Ordinance,
Bankruptcy Ordinance
Reorganization and Rehabilitation Laws: Further info here.

The Active Population in Figures

	2018	2019	2020
Labour Force	3,961,533	3,940,634	3,807,825

Source: International Labour Organization, ILOSTAT database

	2017	2018	2019
Total activity rate	71.96%	72.26%	72.27%
Men activity rate	80.31%	80.62%	80.86%
Women activity rate	65.13%	65.47%	65.34%

Source: International Labour Organization, ILOSTAT database

Employed Persons, by Occupation (% of Total Labour Force)	2014
Wholesale and retail trade; repair of motor vehicles and motorcycles	22.6%
Professional, scientific and technical activities	9.1%
Transportation and storage	8.6%
Construction	8.2%
Accommodation and food service activities	7.7%
Financial and insurance activities	6.3%
Education	5.5%
Human health and social work activities	4.8%
Real estate activities	4.1%
Manufacturing	3.5%
Information and communication	3.3%
Public administration and defence; compulsory social security	2.9%
Arts, entertainment and recreation	1.5%

For Further Information About the Labour Market: Statistics, regarding the education level of households and residents

Working Conditions

Opening Hours
Legal Weekly Duration: Between 40 and 48 hours
Maximum Duration: Working hours a day: 8 hours (between 7 a.m. and 7 p.m. only).

Working hours: a week: 48 hours.
Night Hours: After 1900 hrs.

Working Rest Day: One rest day per week.
Paid Annual Vacation: As per the work contract. 12 days of holiday are compulsory.
Retirement Age: There is no legal age for retirement, but the average age is around 62 years.
Child Labour and Minimum Age For Employment: 16 years
Informal Labour Market: Weak.

The Cost of Labour

Pay

Minimum Wage: According to the Hong Kong Labour Department, the minimum wage for non-domestic workers is HKD 37.5 per hour. This rate will be reviewed by the end of 2022.
Average Wage: According to the Census and Statistics Department, the gross median monthly employment wage is HKD 18,700 in 2021.
Other Forms of Pay
Pay For Rest Days Worked: Prohibited.
Pay For Overtime at Night: Prohibited.

Social Security Costs

The Areas Covered: Employees subscribe to mandatory provident funds that are run privately. These generally cover universal allowances, mandatory occupational benefit and social assistance (including medical benefits). A government social security scheme is administered through the SWD for the financially vulnerable only.
Contributions: Contributions Paid By the Employer: Employers are required to deduct 5% and contribute a further 5% to the Mandatory Provident Fund (MPF), calculated on a maximum income of HKD 30,000.
Contributions Paid By the Employee: For employees with monthly income above HKD 7,100, a 5% withholding tax (capped at HKD 1,500) is levied as contribution to the Mandatory Provident Fund (MPF).
Competent Organization: Mandatory Provident Fund Schemes Authority
Social Welfare Department

Management of Human Resources

Recruitment

Method of Recruitment: Depends on the sectors. Face to face remains the standard.
Recruitment Agencies: Recruitment agencies in Hong Kong.
Recruitment Websites: Hong Kong Jobs
Monster HK

The Contract

Type of Contract: The labor contract is mainly drawn-up by the law. It is completed by collective negotiations and agreements.
The formalism of the labour contract, hiring conditions and lay-off constraints are relatively flexible. CDI and the CDD are the two existing types of contracts.

Breach of Contracts

Retirement

Visit Labour.

Dismissals

Visit Labour.

Other Possible Methods

Resignation.

Labour Laws

The essential features of the labor laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

Dispute Settlement

Conciliation Process

Legal Framework: A request for conciliation will be submitted at the Labor Relations Division of the Labour Department. If conciliation is not reached, a Labour commissioner will be appointed to undertake the conciliation. Mediation will then be undertaken. Arbitration or an enquiry committee will be set-up if the conciliation and mediation has not been successful in judging the case.
Procedure: Labour Relations Ordinance

Judicial Structures

Legal Framework

Labour Relations Ordinance

Competent Legal Body

Labour Relations Division.

Chief Executive of the Government of Hong Kong.

Social Partners

Social Dialogue and Involvement of Social Partners: Hong Kong Confederation of Trade Unions - (HKCTU) gathers several trade unions. Their power remains very weak.
Unionisation Rate: The unionization rate was about 23.6% in 2011.
Labour Unions: Hong Kong Federation of Trade Unions (HKFTU)
Regulation Bodies: Labour Department

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