Operating a Business

flag Hong Kong SAR, China 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.
General Professional Associations
Employers Federation of Hong Kong (EFHK)
Company Directories
Companies Registry
 

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.

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

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.

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The Active Population in Figures

201820192020
Labour Force 3,961,5333,940,6343,807,825

Source: International Labour Organization, ILOSTAT database

 
201720182019
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

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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.

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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

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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
Best Jobs Hong Kong
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
 

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.
Unions
Hong Kong Federation of Trade Unions (HKFTU)
Regulation Bodies
Labour Department
 
 

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Latest Update: June 2022