Are you thinking about starting a business in Hong Kong? Do you already have a business in Hong Kong? If so, you’ll need to register your business or update your business registration with the government. Since 1 April 2023, the Revenue Order 2022 which covered the “Reduction of Business Registration Fees and Branch Registration Fees” has expired.
In other words, companies no longer receive a HK$2000 discount on their business registration fees. They are required to pay the full price of HK$2150 instead of HK$150.
This may be a bit of a leap but the government says the increase is necessary to recover the cost of providing business registration services.
What is the business registration fee?
The business registration fee is an annual renewal fee collected by the Inland Revenue Department. This registration certificate is one of the four compulsory documents (along with the Annual Return, Profits Tax Return, and Employer’s Return) which must be submitted to the government each year.
I read on the internet that there’s a 3-year certificate. It seems cheaper than renewing yearly.
Truly, it seems a 3-year certificate which costs HK$5650 is more of a bargain than paying $2150 for 3 years. However, if you refer to the below table, the tax department is not always consistent with the business registration certificate cost each year. They may occasionally offer subsidies. If you paid for a 3-year certificate prior to March 2019, that means you paid a total of HK$5950 instead of HK$2750 for the same period. In the past decade, the registration fee was only required in full for 4 years. Therefore, it may seem like a 3-year certificate is cheaper at first glance, however you are gambling with whether or not the fee may be discounted for the upcoming 3 years.
The change in business registration fee for the financial year 2023/24 is not an increase, it is just a return back to normal standard. Although a 3-year certificate may appear cheaper, it is also important to note that there is no guarantee the business registration fee will remain the same for the next three years. If the fee increases, businesses that have opted for a three-year certificate will be locked into a higher price. Businesses that are expecting to grow should opt for a 1-year certificate so that they can take advantage of any discounts that may be offered in the future.If you are still unsure which option is right for, please feel free to contact us at firstname.lastname@example.org or visit the IRD website for more information