How To Set Up Your E-commerce Company In Hong Kong | Article – HSBC VisionGo

Find out how you can successfully enter the booming eCommerce sector in Hong Kong.

Finance  ·    ·  3 mins read


According to the Worldpay FIS 2020 Global Payments Report, Hong Kong’s e-commerce market is expected to grow by 40% to reach $25 billion by 2023. Changing consumer buying patterns as well as higher adoption of digital payment options are the two main drivers attracting consumers online. 

And where consumers go, businesses must follow. So if you are one of the wise ones looking to start an eCommerce company in Hong Kong, this article is for you. 

The first order of the day is to choose an eCommerce business model

The online economy in Hong Kong covers a broad spectrum of products, comprising an exhaustive list that includes products ranging from accessories and books to diamonds and shoes. In this massive range, you have to first decide the business structure of your company. Here is a quick look at the 4 most popular online models you can choose from depending on the products and users you are dealing with – 

Drop-shipping – the easiest and cheapest to start; this model doesn’t require you to manufacture any product or even keep a standing inventory. You just have to tie up with a seller and market the product – production and shipping are managed entirely by the supplier. 

White label – in this model, you buy generic products and retail them under your brand. You don’t have to manufacture the base product, but the packaging, marketing, etc. are your responsibilities. 

Subscription – mostly used by services, this online business structure brings in customers by offering them a monthly or annual service for a recurring payment model. 

Wholesale - With this model, an eCommerce company ships large quantities of products and distributes them to smaller stores at discounted rates.

The next big decisions are about building your eStore  

Here you have 3 main options – self-hosting, SaaS-based hosting, and creating a storefront on another platform.  

Self-hosting – A self-hosted platform is the one where you are the one responsible for building, hosting, and data storage of your eComm site. You are required to set up your own server, which is more technical to start and operate but gives your business more flexibility, features, and control over the portal. 

Hosting - A hosted e-commerce platform is a software as a service (SaaS) solution that hosts online stores for a fee. The business can get cost benefits that come from economies of scale and also access superior expertise in related fields such as backend maintenance and cybersecurity. It also saves you from putting together an expensive team to manage the technicalities of running an eStore. Of course, all this comes at a cost – less control and a templated functionality.  

Third-party platform – the third no-fuss option is to piggyback off an established platform. You don’t have your own portal; instead, put your product or business on an existing one. The advantage is that you get access to a large established user base of targeted customers without getting into any set-up nitty-gritties. The downside is that you have no control and will have to pay a substantial fee to become a part of the platform. However, if the platform matches well with your product line, then this is a simpler way to get to your customers. 

Finally, it is time to sew up the legalities  

Once you have a better grasp of your company’s structure and operational flow, it is time to incorporate your business. For this, you will need: 

  1. A registered business name that is unique and falls under the guidelines set by the government. Your brand/store name doesn’t have to be the same as your legal business name. 
  2. To pick a legal company structure - In Hong Kong, the most common type of business entities are sole proprietorships, partnerships, a limited liability company (LLC), or a foreign company office. While registering, you will have to pick one specific structure.
  3. To get a registered business address for your legal correspondence  
  4. To appoint a corporate secretary to handle your business reporting and compliance needs. 
  5. To check with the relevant licensing authority to understand if you need a permit/licence to operate and how to apply for it.  
  6. A business registration certificate to prove that your business is valid and registered with the Inland Revenue Department 

Open a business bank account

With your incorporation complete, it is now time to move on to the next step – opening a bank account for your company. For this, you will documents such as the Certificate of Incorporation, a registered address, shareholder information, your business plan and your Business Registration Certificate.

Bookkeeping and annual financial compliance  You will get a breather from all business reporting for the first 18 months of your incorporation. However, after your initial 18 months, you will need to submit yearly accounting reports and get them audited before filing your tax returns – all this takes time and professional expertise. So, it is best to have the right systems in place right from the start. 

Our Hong Kong certified accountants will make sure none of the deadlines are missing.

To make sure that the accounting and other tax-related work hums along smoothly, we recommend you outsource the whole compliance activity to a reputable agency with 360-degree experience across all financial and legal regulations of Hong Kong.

Key Takeaways 

  • Decide on your business model
  • Choose your eStore platform with an eye on your resources and your product
  • Fix on the legal structure of your business
  • Register your company name 
  • Get a registered business address, a company secretary and fulfil all incorporation requirements before applying  
  • Get the relevant business licences 
  • Open a business bank account
  • Hire accounting and tax professionals to manage your financials 
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