What is a sole proprietorship in Hong Kong?

Sole Proprietorship Hong Kong

A sole proprietorship is Hong Kong's simplest unincorporated business structure. The business and its single owner are one legal entity, making the proprietor personally liable for all business debts and obligations. Register a sole proprietorship hong kong with the of the Inland Revenue Department (IRD), not the Companies Registry.

Hong Kong Sole Trader

"Sole proprietor" and "Hong Kong sole trader" mean the same thing. The individual owns and controls the entire business, receiving all profits and bearing all losses. Because there is no separate legal entity, personal assets like the proprietor's home or savings can be seized to settle business debts.

Business Registration Sole Propriet

A business registration sole proprietor must apply for a Business Registration Certificate under the Business Registration Ordinance (Cap. 310). Submit Form IRBR1 to the . The Inland Revenue Department issues the certificate, not the Companies Registry. Renew it annually or every three years. The Business Registration Certificate is not a trade licence.

Starting a Sole Proprietorship Hong Kong

Starting a sole proprietorship Hong Kong requires completing Form IRBR1 and paying the prescribed fee to the IRD. No incorporation documents are needed; the business is unincorporated. The proprietor must open a separate business bank account. If they employ staff, they must register for the Mandatory Provident Fund.

Unincorporated Business Hong Kong

As an unincorporated business Hong Kong, a sole proprietorship has no requirement to file annual returns with the Companies Registry, file audited financial statements, or appoint a company secretary. For profits tax, the proprietor files Form BIR52 (Profits Tax Return, Persons Other Than Corporations). Profits tax is charged at two-tiered rates for unincorporated businesses: 7.5% on the first HK$2,000,000 of assessable profits and 15% on the remainder. The proprietor reports business income as self-employed income on their individual tax return.