Branch Office

A Branch Office in Hong Kong is an extension of a foreign company that wants to operate locally without establishing a separate legal entity. Unlike a subsidiary, which is a Hong Kong-incorporated company, a branch office is legally part of the foreign parent company. It must carry the same name as the overseas entity, unless translated into Chinese or English.

Since a branch office is not a separate entity, the foreign company is directly liable for all obligations and debts incurred in Hong Kong. This setup allows companies to engage in commercial transactions while maintaining full control from their overseas headquarters. You can visit the Hong Kong Companies Registry for more information on the legal status of non-Hong Kong companies.

While both structures allow a foreign business to operate in Hong Kong, the legal and operational differences are substantial.

A subsidiary is a locally incorporated private limited company under Hong Kong law, offering limited liability to shareholders. This shields the parent company from financial and legal risks. Subsidiaries can also adopt a different name and business scope than their parent.
A Branch Office, on the other hand, is simply an extension of the parent company. It is not a separate legal entity and must adhere to the same name and activities as the head office. Any liability incurred by the branch in Hong Kong directly affects the foreign company.

Setting up a Branch Office in Hong Kong involves registering as a Non-Hong Kong Company under the Companies Ordinance (Cap. 622).

All submitted documents must be in English or Chinese, or accompanied by certified translations. Once completed, the company receives a Certificate of Registration and may begin legal operations.

Yes. A Hong Kong Branch Office is permitted to carry out full-scale commercial activities, unlike a Representative Office which is limited to non-trading activities like market research and liaison functions.

– Sign contracts and issue invoices
– Receive income and make profits
– Open a corporate bank account
– Hire staff and rent office space
However, the branch’s operations must fall within the scope of the parent company’s approved business activities in its country of incorporation. This makes branch offices a practical choice for companies that want to start revenue-generating operations in Hong Kong without forming a separate entity.

The Companies Registry requires several documents when registering a Branch Office in Hong Kong:

– Certified copy of the foreign company’s Certificate of Incorporation
– Certified copy of its Memorandum and Articles of Association (or equivalent)
– A copy of the company’s latest audited financial statements
– Completed Form NN1
– Proof of a registered business address in Hong Kong
– Details of the Hong Kong resident representative

The process to register a Branch Office in Hong Kong generally takes 10 to 14 business days. This timeframe includes:
– Document verification
– Application submission and review
– Issuance of the Certificate of Registration and Business Registration Certificate
If documents require legalization or translation, the process may be extended by an additional 5-7 working days. Working with professionals can help streamline the process and avoid unnecessary delays. You can check registration status through the e-Registry platform provided by the Companies Registry.

A Branch Office is taxed in Hong Kong on profits sourced within Hong Kong, similar to local companies. The current corporate tax rates are:
– 8.25% on the first HKD 2 million of assessable profits
– 16.5% on profits exceeding HKD 2 million

Only profits derived from Hong Kong activities are taxable, in line with Hong Kong’s territorial tax system. Profits earned outside Hong Kong may be exempt, but the branch must prove the income’s offshore nature. Supporting documentation and proper record-keeping are critical. The branch must also:
– File an annual Profits Tax Return with the IRD
– Register as an employer and submit Employer’s Return forms
– Enroll staff in the Mandatory Provident Fund (MPF) if they are eligible
For more information on tax obligations, visit the IRD Corporate Tax.

Yes. While the branch itself is not required to conduct a separate local audit, it must submit the audited financial statements of the parent company to the Companies Registry each year.

If the parent company operates in a jurisdiction where audits are not mandatory, it may still need to prepare financial statements that meet Hong Kong’s standards. These statements must be filed annually along with Form NAR1 (Annual Return) and are subject to review by the Inland Revenue Department.

Yes, a Branch Office can hire local employees, subject to compliance with Hong Kong’s Employment Ordinance and labor regulations.

Hiring local employees requires the branch to:
– Register as an employer with the IRD
– Enroll employees in the MPF scheme
– Provide compliant employment contracts
If the branch hires foreign staff, it must apply for employment visas under the General Employment Policy (GEP). The Immigration Department evaluates these applications based on the candidate’s qualifications and the position’s relevance. For guidance on hiring employees, visit the Hong Kong Labour Department.

Opening a Branch Office in Hong Kong offers direct market access, tax advantages, and a robust legal framework for foreign companies. Unlike a Representative Office, a branch office enables full-scale commercial operations, making it ideal for companies that want to generate revenue while maintaining control from the head office.

Themis Partner provides full-service legal assistance for branch office registration in Hong Kong from certified translations to compliance filing and business registration. Our experts ensure your setup is fast, legally sound, and fully compliant with all regulatory requirements.

Contact us today to begin your Hong Kong expansion and establish your Branch Office in just two weeks.