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Do I need Travel Agent License?

  1. #1

    Join Date
    Oct 2018
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    Do I need Travel Agent License?

    Hi there,

    Does a Ltd company registered in Hong Kong that is organizing and selling tours to customers not in HK and that don't take place in Hong Kong need Travel Agent License? The company also has no operations in HK, no employees other than outsourced accounting and registered office address. Basically offshore.

    The definition of outbound and inbound travel agent in Travel Agents Ordinance (TAO) (Cap. 218) contains the condition

    ...if, in Hong Kong, he carries on the business of...
    Does it mean that if a company doesn't have any operation in HK and is not selling tours to HK or to HK customers, license is not necessary?

    Thanks

  2. #2

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    You can ask Travel Industry Council HK if you need their membership:

    Contact Us

    Aqui likes this.

  3. #3

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    More importantly, what are the expectations of your service providers, do they want you to have a license?

    HK doesn't really regulate much.


  4. #4

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    Dec 2009
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    And does your insurance policy require you to have a license?


  5. #5

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    Oct 2018
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    Quote Originally Posted by Drunken Master
    You can ask Travel Industry Council HK if you need their membership:

    Contact Us
    Thanks, going to give it a try.

    Quote Originally Posted by MandM!
    More importantly, what are the expectations of your service providers, do they want you to have a license?

    HK doesn't really regulate much.
    Don't think there will be much expectations. Well be dealing mostly with mainland providers.

    Quote Originally Posted by emx
    And does your insurance policy require you to have a license?
    That's a good point I haven't even thought of yet.

  6. #6

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    Quote Originally Posted by Aqui
    Does it mean that if a company doesn't have any operation in HK and is not selling tours to HK or to HK customers, license is not necessary?
    - I presume this also means you're not selling flights from Hong Kong, nor receiving money for accommodation?

    The agency I worked for had a holding company in Hong Kong and ran tours in Mainland China. However, at each city / province you need to either be properly licensed, or work with local 'partners' (suppliers). That's fine, assuming they are properly licensed to arrange guides, vehicles etc.

    This was very much legal as it was outside of Hong Kong's jurisdiction but at the time we never received tour payments into Hong Kong either. Once you do this, it becomes a slight grey area.

    EMX raised an issue of insurance and liability. The question ultimately: if something happens, what then? There are policies underwriting travel companies, but you need to be legitimate for that. (Good luck getting this in the Mainland - it's not easy). HK is cheap for tax, and easier if you have a WOFE in China, but from experience I can say that the insurance here would cost you more than for a US-based travel company doing the same business. You would also need to be licensed locally.

    You should also make sure your supply chain are fully licensed, right down to the vehicle providers.
    chuckster007, Aqui and shri like this.

  7. #7

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    Quote Originally Posted by MandM!
    More importantly, what are the expectations of your service providers, do they want you to have a license?

    HK doesn't really regulate much.
    WTF?

    Try getting EDB registration or opening a restaurant...

    Travel agencies have become on of the more regulated industries after some fairly high profile cases involving both licenced and unlicenced operators.

    Don't get confused... sure, a lot of people flout the regs. but they are there and I would, broadly speaking, draw parallels with the U.K. system...

    https://www.gov.hk/en/business/regis...ense/index.htm
    Aqui likes this.

  8. #8

    Join Date
    Oct 2018
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    Quote Originally Posted by tparker
    - I presume this also means you're not selling flights from Hong Kong, nor receiving money for accommodation?

    The agency I worked for had a holding company in Hong Kong and ran tours in Mainland China. However, at each city / province you need to either be properly licensed, or work with local 'partners' (suppliers). That's fine, assuming they are properly licensed to arrange guides, vehicles etc.

    This was very much legal as it was outside of Hong Kong's jurisdiction but at the time we never received tour payments into Hong Kong either. Once you do this, it becomes a slight grey area.

    EMX raised an issue of insurance and liability. The question ultimately: if something happens, what then? There are policies underwriting travel companies, but you need to be legitimate for that. (Good luck getting this in the Mainland - it's not easy). HK is cheap for tax, and easier if you have a WOFE in China, but from experience I can say that the insurance here would cost you more than for a US-based travel company doing the same business. You would also need to be licensed locally.

    You should also make sure your supply chain are fully licensed, right down to the vehicle providers.
    Thanks for the insights. Arrangements within Mainland should not be a big issue and receiving payments to an account outside Hong Kong should also be manageable. But from what I've been hearing so far it seems that the insurance part would be the biggest challenge.

  9. #9

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    Oct 2018
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    Quote Originally Posted by SpeakCantonese
    Don't get confused... sure, a lot of people flout the regs. but they are there and I would, broadly speaking, draw parallels with the U.K. system...
    Funny that you mentioned UK. Looking at the issues I'd be facing in Hong Kong it just might be more viable to incorporate in the UK. Yes it's more regulated but at least very transparent and quite straightforward.

  10. #10

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    Quote Originally Posted by Aqui
    Thanks for the insights. Arrangements within Mainland should not be a big issue and receiving payments to an account outside Hong Kong should also be manageable. But from what I've been hearing so far it seems that the insurance part would be the biggest challenge.
    ... you could also just forget the insurance; you wouldn't be the only one. If you're merely a "broker" for combining suppliers and re-selling a package to clients, and we've already established you're beyond jurisdiction, then insurance is not a legal requirement. (Your suppliers should be insured anyway). Quite a few are doing this. But of course, if something happens and a claim is made against you, you'll have a headache on your hands.

    I'd say this is less the issue. You'll get some clients booking tours through a random agency, but at some point you'll need to legitimise your operations to build confidence. Too many dodgy travel companies at the moment.

    Speaking of enforcement, it's known within government that the TIC lacks enforcement powers and plans for a replacement agency have been gaining traction. I'd say we're probably one or two years away, but a new authority is in the works and will have much stricter powers backed by legislation. Stay tuned for those developments.
    shri and Drunken Master like this.