Expired GEP Visa - Create company in HK?

[TheRoadAhead]

I lived in HK from 2019 to early 2023, and my GEP visa tied to my previous employer expired last month.

I am planning to start a company (service based, fully remote, with clients in Europe, some in HK and US) and I am weighing the pros and cons of opening it in HK vs my home country in the European Union.

Opening a HK company would mean I am going back to being a HK resident (and spend couple months per year there) and pay HK tax, so cutting all ties with my home country (which I started to build back in the past couple of months).

Getting a visa would be hard you think (without a high investment)? Can it help that I already had a GEP visa and a relationship with immigration and tax offices?

If it does not work or does not make sense for me, where else would it make sense for me to open the company?

[Anahan]

I think the appropriate visa in your case would be the Business Investment Visa. One of the main criteria for this visa is showing that your company will make a substantial contribution to the economy of HK. In practice, I believe this means hiring employees locally in HK. Stephen Barnes, an immigration lawyer, has published a ton of information about this visa on his site: https://hongkongvisageeza.com/

You mentioned that you plan to spend just a few months per year in HK. A word of caution: depending on where else you spend your time, you might be considered a tax resident there, too. Like if you set up your company in HK but then spent much of the year back in your EU home country, your home country would probably consider you a tax resident.

[TheRoadAhead]

I think the appropriate visa in your case would be the Business Investment Visa. One of the main criteria for this visa is showing that your company will make a substantial contribution to the economy of HK. In practice, I believe this means hiring employees locally in HK. Stephen Barnes, an immigration lawyer, has published a ton of information about this visa on his site: https://hongkongvisageeza.com/

You mentioned that you plan to spend just a few months per year in HK. A word of caution: depending on where else you spend your time, you might be considered a tax resident there, too. Like if you set up your company in HK but then spent much of the year back in your EU home country, your home country would probably consider you a tax resident.

Thank you, looking on the website you mentioned. Can I still come to HK as a visitor while the business investment visa is being processed (it takes around 3 months I believe)?

[Anahan]

Yes - in your research, look into what Stephen Barnes calls the 'catch-22' of the business investment visa. The conundrum is that technically, you're not supposed to work while on a tourist visa, yet you're also expected to have set up your business to some degree in order to get the business investment visa approved. In practice, according to Stephen Barnes, this means that as long as you have a business investment visa application in process, the immigration department will be ok with you creating certain facts on the ground for your business in HK.

Here are a few other quick tips:
- Anyone (resident or non-resident) can register a company in HK. HK companies are not required to have local directors. So, you could theoretically start registering your HK company today. Do note that while you're not required to have any local directors (all the company directors could be foreigners who have never even been to HK), you are required to have a HK-resident company secretary, and you're also required to prepare annual audited financial statements. Companies like sleek.com can help you with all of this.
- A big challenge for HK companies has traditionally been getting a bank account. About a decade ago, HK banks started to de-risk a lot in the wake of huge money laundering scandals, and they became less comfortable with business with a weak connection to the region and/or new businesses without much of a presence in HK yet. This made life really difficult for startups and new businesses. My impression is that the situation is improving, but I'd still expect it to take quite some time to open a bank account, especially if you're a non-resident. In the early days of your company, I'd begin with using an EMI like Currenxie, Airwallex, etc., and then consider applying for a traditional company bank account and MPF scheme once you're in HK and more set up.

[TheRoadAhead]

Yes - in your research, look into what Stephen Barnes calls the 'catch-22' of the business investment visa. The conundrum is that technically, you're not supposed to work while on a tourist visa, yet you're also expected to have set up your business to some degree in order to get the business investment visa approved. In practice, according to Stephen Barnes, this means that as long as you have a business investment visa application in process, the immigration department will be ok with you creating certain facts on the ground for your business in HK.

Here are a few other quick tips:
- Anyone (resident or non-resident) can register a company in HK. HK companies are not required to have local directors. So, you could theoretically start registering your HK company today. Do note that while you're not required to have any local directors (all the company directors could be foreigners who have never even been to HK), you are required to have a HK-resident company secretary, and you're also required to prepare annual audited financial statements. Companies like sleek.com can help you with all of this.
- A big challenge for HK companies has traditionally been getting a bank account. About a decade ago, HK banks started to de-risk a lot in the wake of huge money laundering scandals, and they became less comfortable with business with a weak connection to the region and/or new businesses without much of a presence in HK yet. This made life really difficult for startups and new businesses. My impression is that the situation is improving, but I'd still expect it to take quite some time to open a bank account, especially if you're a non-resident. In the early days of your company, I'd begin with using an EMI like Currenxie, Airwallex, etc., and then consider applying for a traditional company bank account and MPF scheme once you're in HK and more set up.

Sounds good.

How much do you think the company creation would cost, and recurring accounting/auditing costs per year?

Do you think that my retail relationship with HSBC for 3+ years in HK would help me getting the business bank account?

[Anahan]

I think Sleek's prices are pretty reasonable and representative:

https://sleek.com/hk/incorporation/
https://sleek.com/hk/accounting-serv...ng-kong/audit/

You could also check out Osome. I've used both Sleek and Osome in the past, and both are fine, though I felt that Sleek was more efficient and organised.

The biggest expense here is the cost of the annual audit. Costs for an audit can vary a lot and depend on the complexity of your business, number of transactions, etc. The cost also depends on whether you need bookkeeping services. There are quite a few threads here about auditor recommendations, etc., if you're interested in looking for less expensive options.

Other expenses to consider would be the cost of office space / co-working space for staff, and staff salaries.

Regarding HSBC, I have to imagine your existing personal banking relationship with HSBC would help a little bit (no idea how much, though).

[Anahan]

I should mention that another good visa option would be the Top Talent Pass. It's worth checking whether you meet the criteria. This looks like a way easier route if you qualify, because you can apparently start a business on this visa.

https://www.immd.gov.hk/eng/services/visas/TTPS.html

https://hongkongvisageeza.com/hong-k...ails-released/

https://www.scmp.com/news/hong-kong/...-secured-under

[shree711]

Sounds good.

How much do you think the company creation would cost, and recurring accounting/auditing costs per year?

Do you think that my retail relationship with HSBC for 3+ years in HK would help me getting the business bank account?

Sometimes HSBC can be difficult for first time accounts. I would suggest talking to a good company secretary who can guide you on these things. If you want to contact one, PM me. I'll give you details of one.

[hk.main]

I had a very good experience with Hang Seng when opening a business account. HSBC on the other hand... they seemed to have lost my application. Though that was during Covid, and everything was a mess, but still.