How to Establish an Ecommerce Business in Hong Kong?

How to Start an Ecommerce Business in Hong Kong is one of Asia’s financial centres that has emerged as one of the greatest locations for e-commerce enterprises. The nation is noted for having a number of beneficial circumstances that provide opportunities for internet enterprises. Thus, the Hong Kong e-commerce industry has consistently increased and expanded in both the B2C and B2B sectors, achieving a penetration rate of about 60% by 2018.

The stages to effectively establishing an ecommerce company in Hong Kong are outlined below.

1. Formalise the business

One of the most important measures to take when entering the Hong Kong e-commerce business is to register the firm. However, creating an e-commerce firm in Hong Kong is quite similar to incorporating a traditional Hong Kong corporation. In reality, thanks to the existence of a broad range of professional service providers in the area that provide focused help, the process of creating and registering a company may be completed in less than 24 hours.

However, in order to register an ecommerce firm, you must first complete the four major stages listed below:

1. Choose the sort of company with which you will be interacting.
2. Choose a name for your firm.
3. Determine the kind of business structure you will use.
4. Then, submit the application and all relevant papers to the Hong Kong Companies Registry.

In comparison to partnerships or sole proprietorships, a private limited company is one of the most frequent business organisations that are thought to be excellent for internet enterprises. This is because it provides independent responsibility among shareholders, allowing you to safeguard your assets. Furthermore, the tax rates imposed on private limited enterprises are extremely modest. This form also provides for ownership flexibility.

2. Open a Bank Account

Assume that the kind of e-commerce firm you want to launch will need business-related transactions that will take place on digital platforms. In such situation, you’ll need to create a bank-like or virtual account.

Typically, creating a business bank account is a time-consuming procedure that requires minimum balances and hefty deposits. However, there are alternatives to typical bank accounts that are better suited to the majority of e-commerce enterprises. These money service providers provide consumers with speedy registration, multi-currency accounts, and entirely online operations that are tailored to e-commerce firms.

3. Apply for a License

Not all enterprises in Hong Kong are needed to get a business license. As a result, you must determine if the kind of company you are launching will need a license. If the company you’re beginning needs a license, you must get one in order for your internet venture to be legally recognised.

For example, if your e-commerce firm will be selling alcoholic drinks online, you will be required to get a liquor license. If, on the other hand, your company sells Chinese herbs, you must get a business license from the Hong Kong Department of Health.

4. Determine your market

Depending on the kind of business you want to establish, you will need to carefully research each online marketplace to see whether it will provide you with the suitable platform for your firm.

For example, you may want to enter the Chinese market. If so, you may look at Taobao, Tmall, or HKTV mall. Alternatively, you may aim to sell your things on Amazon or eBay.

Once you’ve settled on the kind of marketplace that’s best for your ecommerce company, you’ll need to email them your business registration number.

5. Manage your company’s compliance

As with most other businesses, you must guarantee that your e-commerce firm conforms with the standards of the relevant authorities.

For example, one and a half years following your company’s registration, you must audit your financial records and submit your Profits Tax Returns with the Inland Revenue Department. As a result, keeping and tracking records of your business-related transactions is strongly recommended.

Disclaimer: The material in this article was compiled using the most recent Acts, Rules, Circulars, Notifications, Provisions, Press Releases, and material that were applicable at the time. The completeness and correctness of the material has been ensured with due diligence. It is required of users of this material to consult the relevant, applicable legislation. The data given may change without prior notice and does not constitute professional advice. As a result, Estabizz Fintech disclaims all liability for the results of using such material.