Complete guide to doing business in Hong Kong in 2026, for growing startups and entrepreneurs

Hong Kong's reputation has taken some hits lately. Political tensions, security laws, companies packing up and leaving. The headlines write themselves. But here's the thing: thousands of businesses are still launching there, and for good reason.

This guide walks you through what's working, what isn't, and whether Hong Kong makes sense for your business. Plus, you’ll learn how Wise Business can keep your international payments running smoothly while you figure it all out.

Go global with Wise Business🚀

Hong Kong expansion overview

Smart expansion starts with understanding what you're getting into. You need a clear picture of the advantages, the challenges, and how the numbers actually stack up. Before we go into details, here's a glance at what Hong Kong offers.

Consideration	Description
Opportunities/benefits	World's freest economy, simple two-tier tax system, gateway to mainland China and Asia, strong fintech and tech ecosystem, fast company setup
Challenges	Political uncertainty, strict national security laws, high cost of living and office space, aging population, increased competition from mainland cities
Most attractive areas for foreign entrepreneurs	Central, Cyberport and Hong Kong Science Park
Ease of doing business	Ranked 76th in TMF Group's Global Business Complexity Index¹

Why expand business to Hong Kong?

Hong Kong's appeal goes beyond the headlines. Yes, there's political uncertainty, but the fundamentals that made it Asia's financial center haven't disappeared. Here's what actually matters for growing businesses.

A major financial hub with infrastructure that works

Hong Kong ranks third globally as a financial center.² What does that mean for you? Deep capital markets when you need funding. Banks that understand international business. A currency pegged to the dollar that doesn't swing wildly.

The physical setup is world-class too. The airport moves more cargo than anywhere else on the planet.³ High-speed rail gets you to Shenzhen in 14 minutes. You can be in Guangzhou for meetings and back in Hong Kong for dinner. This is good for business especially when you need to move fast across Asia.

Low taxes and a territorial system

Most places tax your worldwide income regardless of where you make profit but it’s different in Hong Kong. Hong Kong runs a territorial tax system and only taxes what you earn there. This means business operations in other countries are generally not taxed there.⁴

The corporate tax rate is 8.25% on your first 2 million HKD in profits, then 16.5% on anything above that.⁵ Hong Kong also has no capital gains tax, no VAT and no dividend withholding which reduces your overall tax burden.

Will the tax office scrutinize your offshore claims? Absolutely. You'll need proper documentation, but if you're legitimately operating elsewhere, you get to keep what you earn.

Gateway to the Greater Bay Area market

The GBA connects Hong Kong with nine mainland cities including Shenzhen and Guangzhou, and it has a total population of 87 million people. Combined GDP is over 1.95 trillion USD.⁶

What matters is how this plays out for a growing business. You can base yourself in Hong Kong with common law and English contracts, then sell into mainland China without the full complexity of setting up there. Need manufacturing? Shenzhen’s right there. Want to test products before scaling? Do it in Hong Kong first.

This setup works even better as cross-border infrastructure improves. Payments are getting easier and customs are less stressful than they used to be. It’s still China, so nothing is simple, but Hong Kong gives you a foot in both worlds.

Growing tech and fintech ecosystem

Hong Kong has 4,694 startups and the ecosystem jumped 20 spots to rank 27th globally.⁷ Companies are getting funded and exiting at higher valuations than before.

The fintech sector in Hong Kong is especially strong. WeLab, Bowtie, and OneDegree all raised money and built real businesses there. The government put 10 billion HKD into an innovation fund for technology and strategic indutries of importance.⁸

Moreover, talent isn't the problem people think it is. Five local universities rank in the global top 100.⁹ Most business gets done in English. You can hire people who understand both Western and Chinese markets.

Fast and simple company registration

A week to incorporate if you have your paperwork ready. File with the Companies Registry, get your business registration certificate, open a bank account. Done.

Hong Kong ranked 76th globally for ease of doing business.¹ The legal system runs on common law, so contracts work how UK founders expect. English is a working language. You can find accountants and lawyers who won't need everything explained from scratch.

Compliance is manageable and annual returns aren't complicated. So, the system is designed to make business easier, not harder.

💡 Read our international expansion checklist

Challenges of doing business in Hong Kong

The benefits of doing business in Hong Kong are real, but so are the challenges. Here are some realities to note before you expand to Hong Kong.

Political uncertainty

The National Security Law has changed how business works in Hong Kong. Since 2020, more than 300 people have been arrested for alleged national security offences.¹⁰ That creates real uncertainty about what crosses a line.

The vague definitions of terms like "state secrets" and "external interference" worry foreign businesses. If you're doing normal due diligence or competitive analysis, where's the boundary? Lawmakers in Hong Kong itself have raised concerns about auditors handling confidential corporate information that could potentially fall under these laws.¹¹

This has caused some companies to leave. In fact, the US State Department updated its advisory in 2024 specifically warning businesses about risks following the National Security Law.¹² That reflects genuine concerns about operating in an environment where rules can shift quickly.

Expensive office space and living costs

Hong Kong consistently ranks as one of the most expensive cities globally for both housing and office space. Grade A office rent in Central averages around 109HKD per square foot monthly.¹³ Smaller startups might find cheaper options in Kowloon or New Territories, but you're still looking at significant costs.

Living expenses hit hard too. Rental for a flat in expat areas runs around 133 HKD per square foot monthly.¹³ If you're bringing in talent from the UK, those numbers matter. Your salary expectations need to account for people needing 30,000HKD minimum just to live modestly as a single person.

Competition with Singapore and mainland cities

Hong Kong isn't the only option anymore. Singapore has been aggressively positioning itself as Asia's business hub, and for some companies, it's winning. Talent can choose between Hong Kong and Singapore, and many are picking Singapore for its political stability.

Mainland Chinese cities are catching up fast too. Shenzhen's right next door with lower costs and direct access to China's market. Shanghai's pushing to become the financial center increasing the level of competition.

Strict banking and compliance regulations

Opening a business bank account in Hong Kong used to be straightforward. Not anymore. Banks have ramped up their know-your-customer (KYC) requirements and due diligence. Some foreign startups report waiting months or getting rejected entirely, especially if your business model looks unfamiliar or involves cross-border transactions.

The scrutiny makes sense from a compliance perspective, but it slows everything down. You might incorporate your company in a week, then spend three months trying to get banking sorted. Fortunately, Wise Business covers the gap by giving you access to local account details. More on this later.

💡 Learn more about navigating risks of international expansion

How to set up a business in Hong Kong

Starting a business in Hong Kong is relatively easy. Most foreign founders go with a private limited company. It protects your personal assets and there are no restrictions on foreign ownership.

Here's what you need:¹⁴

• At least one director and one shareholder (same person works fine)
• A company secretary who's either a Hong Kong resident or a licensed service provider
• A physical address in Hong Kong

Follow this process to setup and verify a business in Hong Kong:¹⁵

• Check if your company name is available on the Companies Registry website
• Prepare the incorporation forms and your Articles of Association
• File everything online through the e-Registry portal
• Pay 1,720 HKD for incorporation and 2,200 HKD for your business registration certificate
• Wait one to five days for approval

That's it. You get your Certificate of Incorporation and Business Registration Certificate, and you're legal.

There's ongoing compliance too. Annual returns, audits, tax filings. These aren’t complicated, but are essential. If you want the full legal breakdown, see our guide on Hong Kong corporate tax rate.

What areas in Hong Kong are best for businesses?

Hong Kong is small enough so you're choosing districts, not cities. Each has different costs and different crowds. Here are three worth considering.

Central

Central is Hong Kong's financial heart, packed with banks, law firms and corporate headquarters. Although the office space is expensive at an average of 109 HKD per square foot monthly,¹³ Central works well if you need to:

• Meet regularly with investors or corporate clients
• Get to government offices quickly
• Look established from day one
• Use the MTR hub to reach the rest of Hong Kong fast

Cyberport

Cyberport is a government-backed tech park on the southern side of Hong Kong Island with over 1650 tech companies and startups.¹⁶ Six unicorns came from Cyberport including Klook, Animoca Brands and WeLab.

Cyberport offers:

• Incubation programme with up to 500,000HKD plus office space¹⁷
• Lots of digital entertainment and cybersecurity firms
• Government support and regular networking events

The catch is location. Getting to Central or Kowloon for meetings takes longer. But if you're building software and want to be around other tech founders instead of bankers, that might not matter.

Hong Kong Science Park

Science Park focuses on biotech, AI, robotics and green tech. Around 2,400 companies work from a 400,000-square-meter campus and six unicorns have come out of there.¹⁸

Science Park makes sense if you need:

• Actual R&D facilities - labs, clean rooms, specialised equipment
• Cheaper office space than Central
• Room for equipment and prototypes

It's 30-40 minutes from Central, so you're not in the thick of things. But for deep tech startups working on hardware or life sciences, its facilities beat convenience.

Business etiquette and culture in Hong Kong

You'll find Hong Kong's business culture pretty straightforward if you're used to working internationally. Punctuality matters so if you turn up late, you're starting on the wrong foot.

Business cards are still a thing here. Hand them over with both hands, ideally with the Chinese side facing up. It's a small gesture but people notice. Take a moment to look at cards you receive rather than just pocketing them immediately.

Hierarchy gets more attention than you might expect. In meetings, address the senior person first and let them lead the conversation. People rarely say "no" outright - if someone's being vague or talking around an issue, that's usually your answer.

Building relationships takes time. Don't expect to close deals on the first meeting. That said, once you've established trust, business moves fast. Keep your cool in negotiations - getting visibly frustrated or pushy won't help.

Tips for doing business in Hong Kong

Once you've decided Hong Kong is right for your business, there are some practical steps that'll make the setup process smoother. Here's what you need to focus on.

• Open a business account early: Every company operating in Hong Kong needs a local business account. Banks take weeks or months to approve applications, and they'll want detailed information about your operations, where your funding comes from, and who your customers are. Many businesses use Wise Business to handle international payments and manage multiple currencies. It's faster to set up and better for cross-border transactions.
• Hire a company secretary: You can't skip this because it's a legal requirement.¹⁵ They handle your annual filings and keep your statutory records in order. Most people use a corporate services provider rather than hiring someone directly.
• Know your tax deadlines: Your first Profits Tax Return is due 18 months after incorporation. The financial year doesn't have to run January to December, but pick your dates early and stick to them. Late filing means penalties.
• Sort visas before you book flights: Moving to Hong Kong yourself? You'll need an Employment Visa or Investment Visa. Applications take 4-6 weeks and require proof your business benefits the local economy - they want to see job creation or new skills coming into Hong Kong.

💡 You may also like our guides to doing business in Asia, the US, LATAM and Europe✈️

Grow your business in Hong Kong with Wise Business

Setting up a local bank account in Hong Kong can take months, but you'll need a way to handle payments from day one. That's where Wise Business comes in.

Open a Wise Business account and manage your finances in 40+ currencies including HKD, GBP, USD and EUR. You can hold 8+ currency balances and receive payments in Hong Kong as if you were a local business.

Send money to over 140+ countries at the mid-market rate with low, transparent fees. Issue Wise Business cards that work in 160+ countries so your team can cover Hong Kong expenses without waiting for reimbursements, and you'll earn cashback on eligible spending.

You'll also get batch payments for multiple suppliers, invoicing tools, accounting integrations with Xero and QuickBooks, and Wise Interest on GBP, USD and EUR balances (investments can fluctuate and your capital is at risk).

The account costs £50 (Advanced plan) or for free (Essentials plan) to open and the application is fully digital. You can start transacting in minutes while you're still waiting for your Hong Kong bank account approval.

Register with Wise Business🚀

*Disclaimer: The UK Wise Business pricing structure is changing with effect from 26/11/2025 date. Receiving money, direct debits and getting paid features are not available with the Essential Plan which you can open for free. Pay a one-time set up fee of £50 to unlock Advanced features including account details to receive payments in 22+ currencies or 8+ currencies for non-swift payments. You’ll also get access to our invoice generating tool, payment links, QuickPay QR codes and the ability to set up direct debits all within one account. Please check our website for the latest pricing information.

---

Source useds

1. Global Business Complexity Index 2025 — TMF Group
2. Hong Kong ranks third globally in Global Financial Centres Index – The Government of the Hong Kong Special Administrative Region
3. Hong Kong International Airport – Monocle
4. Territorial Source Principle of Taxation – Hong Kong Inland Revenue Department
5. Hong Kong SAR Tax Administration – PWC
6. Greater Bay Area – HKETO Berlin
7. Hong Kong ranks 27th globally amongst top startup ecosystems – Hong Kong Business
8. Hong Kong 2025-2026 Innovation and Technology Budget – Budget Speech
9. Five HK universities rank in top 100 – Hong Kong GOV News
10. Hong Kong security law informers – BBC
11. Hong Kong’s Article 23 law – MyNEWS
12. Updated Hong Kong Business Advisory – The U.S. Department of State
13. Hong Kong Monthly – Knight Frank
14. HK company FAQ – Mayer Brown
15. Hong Kong Company Registration Guide – China Briefing
16. Cyberport – Startmeup HK
17. Cyberport incubation programme – Cyberport
18. Hong Kong Science Park – Grokipedia

Sources last checked: 08-Dec-2025