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Hong Kong Fact-File Part 1: Hong Kong Business Formation for Individuals

1.4 Hong Kong Individual Business Licensing

Licensing of individual business activity

Many types of business require licenses to operate in Hong Kong, including operations providing food, beverages or tobacco, retailers, telecommunications, providers, and many types of service providers. Further information, including guidance on how to complete license application forms can be found at: www.success.tid.gov.hk; by submitting information on the planned size, type and location of the business, targeted information on the license type, and how to obtain it, can be found.

Below are just a few examples:

A general restaurant license from the Hong Kong Food and Environmental Hygiene Department is required when the establishment intends to sell food and non-alcoholic beverages. If alcohol is to be sold, then a liquor license is needed from the Liquor Licensing Board in addition to the general license. If alcohol is also to be stored on the premises but is not necessarily for immediate consumption, then a License for Storage and Manufacture of Dangerous Goods must be applied for from the Fire Service Department.

A Bakery License is required if baked goods are produced in the restaurant’s kitchen and sold over the counter for customers to take away. If the baked goods are solely for consumption on the premises, then no such license is needed.

Sushi, raw meat, sashimi and oysters are classed as restricted foods and a Restricted Food Permit is required before an establishment can sell such products.

Should the restaurant owner wish to provide entertainment in the form of Karaoke for their patrons, a Karaoke Establishment Permit is required. Please note that such a permit is usually only issued if a General Restaurant License applies to the same restaurant.

All of the restaurant/food related licenses must be applied for from the Hong Kong Food and Environmental Hygiene Department and their cost depends on all of the above factors.

Employment agencies must apply for a license from the Hong Kong Labour Department; travel agents must register with the Hong Kong Travel Agent’s registry.


Educational institutes must be in possession of a ‘Certificate of Registration of a School’ from the Hong Kong Education Department. The certificate is necessary for all educational establishments from Kindergarten upwards.

Event management is a very complex area and a number of different licenses may have to be obtained prior to staging an event such as concerts, ballets, circuses, exhibitions, bazaars, fun fairs and dance parties. The ‘Place of Public Entertainment License’ is the primary license and is issued by the Hong Kong Food and Environmental Hygiene Department. The department can advise the applicant on any other potential licenses required and how to obtain them.

The Hong Kong Securities and Futures Ordinance (SFO) outlines the activities regulated by the Securities and Futures Commission (SFC). Advising on and dealing in financial securities, futures and corporate finance and asset management services are among the categories that require an intermediary to hold a valid ‘Financial Services License’. The SFC deals with applications.

Businesses engaging in import/export activities are covered by different licenses relevant to the goods to be imported/exported. For instance, a license for dutiable goods is required for alcohol, tobacco, hydrocarbon oils and methyl alcohol. Chemicals, birds and animals, pharmaceuticals, pesticides, plants, rough diamonds and textiles are among those items that require a relevant license. The Customs and Excise Department of Hong Kong issues most of these licenses and can provide further information.

Retail shop licenses vary depending on the goods sold, for example: boarding kennels need a license for a pet shop, to sell Chinese herbs, a license has to be issued by the Department of Health, as does a license for running a cosmetics, pharmaceutical and/or drugs store.

The cost of business licensing, initially and ongoing

Costs of business licenses vary widely and depend on the industry. For instance, once an educational establishment has been properly licensed, this license does not expire and no renewal fees are payable.

A general import/export license is HKD950 , a bonded warehouse license is HKD19,250. The license must be renewed annually with any license amendment attracting an additional fee of HKD350.

For travel agents the application fee is HKD630 and the license fee is HKD485 per month. Licenses for travel agents are HKD2,000 on application and for each renewal.

As mentioned before, restaurant licenses vary widely and depend on the type of food the restaurant will be selling, whether alcohol will be served and whether outside seating is available.

 

Introductory Guides

Brief, clearly written summaries with links to relevant sections of the Fact-File. The Fact-File itself is linked in full below.

 

Fact-File

Part 1: Hong Kong Business Formation for Individuals

  1. Hong Kong Individual Business Structures
  2. Hong Kong Individual Business Registration
  3. Hong Kong Individual Business Registration Cost
  4. Hong Kong Individual Business Licensing
  5. Hong Kong Foreigners in Business
  6. Hong Kong Business Organisations
  7. Hong Kong Business Accounting
  8. Hong Kong Family Business Ownership
  9. Hong Kong Venture Capital
  10. Hong Kong Individual Business Franchises

Part 2: Hong Kong Individual Business Domestic Taxation

  1. Hong Kong Individual Business Tax Residence Rules
  2. Hong Kong Permanent Establishment
  3. Hong Kong Individual Income Tax Rates and Bands
  4. Hong Kong Personal Allowances and Business Deductions
  5. Hong Kong Husband and Wife Partnerships
  6. Hong Kong Partnership Income Taxation
  7. Hong Kong Limited Companies Income Taxation
  8. Hong Kong Business Profit Retention
  9. Hong Kong Business Losses
  10. Hong Kong Value Added Tax (VAT)
  11. Hong Kong Individual Business Capital Gains Tax (CGT)
  12. Hong Kong Individual Business Other Taxes
  13. Hong Kong Individual Artists Royalties
  14. Hong Kong Individual Business Tax-Efficient Profit Distribution

Part 3: Hong Kong Individual Business International Taxation

  1. Hong Kong Individual Business International Tax Liability
  2. Hong Kong Individual Business Withholding Taxes
  3. Hong Kong Double Tax Treaties

Part 4: Hong Kong Individual Business Tax-Efficient Structures

  1. Hong Kong Individual Business Trusts and Foundations
  2. Hong Kong Individual Business for Non-Residents
  3. Hong Kong Individual Business use of Offshore
  4. Hong Kong Controlled Foreign Corporation (CFC) Rules
  5. Hong Kong Personal Estate and Inheritance Planning

Part 5: Hong Kong Small Business Incentive Programs

  1. Hong Kong Small Business Support Schemes
  2. Hong Kong Training Incentive Schemes
  3. Hong Kong R&D Tax Credits
  4. Hong Kong Individual Business Tax Holidays

Part 6: Hong Kong Individual Business Employment Issues

  1. Hong Kong Individual Business Employer Responsibilities
  2. Hong Kong Employment vs Self-Employment Tax Issues
  3. Hong Kong Apprenticeship and Work Experience Schemes
  4. Hong Kong Employee Dismissal Rules
  5. Hong Kong Business Owner Employment and Invoicing Rules

Part 7: Hong Kong Business Owner Welfare and Lifestyle

  1. Hong Kong Business Social Security
  2. Hong Kong Business Domestic Pensions
  3. Hong Kong Offshore and International Pensions
  4. Hong Kong Individual Business Healthcare
  5. Hong Kong Individual Business Banking Services
  6. Hong Kong Education
  7. Hong Kong Individual or Business Leaving Hong Kong
  8. Hong Kong Domestic Real Estate
  9. Hong Kong International Real Estate