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Different forms of Business Entities are available in Hong Kong to run your businesses. The appropriate form of business entity to be set up depends on the nature of the business, the function of the entity, the liability and tax implications involved, ...etc.
A Hong Kong Limited Company could be set up as a standalone entity or a subsidiary of an overseas company. You can utilise it as a Standalone Branch (of an overseas company) with its own limited liability restricted to Hong Kong.
An Overseas Company or Overseas Branch Office is for a company incorporated overseas to have an extension of its presence in Hong Kong. Since there is no incorporation required in Hong Kong (only registration as an overseas office), any liability will go to the parent company outside Hong Kong. However, an overseas company or branch can leverage off the credit of the parent company as there is only one corporation in existence.
A Representative Office of an overseas company is only allowed to perform very limited functions. As there is no incorporation in Hong Kong, any liability will go to the overseas Head Office. A representative office cannot enter into contracts or generate any income. Its main function is for promotional and liaison work only.
A Sole Proprietorship or Partnership does not have a separate legal entity. Any liability will go to the sole proprietor or partners. Though they are relatively easy to set up and maintain, it is not advisable for businesses with high expected risk or liability.
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