One: Why Business Registration Is Necessary
Under Hong Kong’s Business Registration Ordinance, profit-making activities conducted in Hong Kong through any channel, including social media, a standalone website or messaging software, are treated as business activities.
Points to note:
A new dedicated e-commerce operator classification explicitly covers different types of online stores
Practical advice: even if you only accept orders through WhatsApp, register within 1 month of starting business if the activity is profit-making. Recent cases indicate that the tax authorities have begun examining business content in Instagram Stories as evidence.
Two: Key Tax Details
Online stores should pay particular attention to:
Profits Tax Calculation
The standard tax rate remains 16.5%
The first HK$2,000,000 of profits may qualify for the preferential 8.25% rate, subject to conditions
Keep local and overseas transaction evidence separate
Filing Documentation
Retain complete records for seven years: ✓ electronic transaction records showing the buyer’s IP address ✓ cross-border shipping documents ✓ platform commission receipts
From 2025, supplementary forms must be submitted electronically through eTAX
A common misconception: many store owners assume PayPal income is automatically exempt from tax. In fact, they must apply for proof of non-Hong Kong-sourced income.
Three: Practical Bank Account Management
Three key considerations when opening a business account:
Regulatory Requirements
A business account is required when monthly business transaction turnover exceeds HK$50,000
Using a personal account for business may trigger an investigation under anti-money laundering legislation
Account Options Compared
Virtual banks: quick opening, in 1 working day, and suitable for start-ups. Traditional banks: comprehensive cross-border services and an established reputation. Digital wallets: low costs for small transactions and support for multiple currencies.
Required Documents
A certified copy of the Business Registration Certificate
Memorandum and articles of association
Original identification documents for directors and shareholders
Proof of address from the past three months; mobile phone bills are not accepted
Four: Options Without a Physical Business Address
Registering a Residential Address
Required: proof of rates payment and the owner’s consent, certified by a lawyer
Restriction: cannot be used to register an import/export business
Provided by a Licensed Company Secretarial Firm
Includes a business address, mail forwarding and basic legal advice
You can also ask Wecorp for assistance
What happens if you do not apply for business registration on time?
Businesses regularly need to provide proof of business registration during their daily operations. If you plan to run an online store, remember to register on time. Failing to submit an application by the deadline can also have legal consequences:
An offender may be fined $5,000 and imprisoned for 1 year.
Anyone applying more than 12 months after starting business must pay:
(a) The current year’s business registration fee and levy
(b) Business registration fees and levies for previous years under section 7 (3) of the Business Registration Ordinance.
Do I need to register if I take orders through social media, such as Instagram or Xiaohongshu?
If the activity meets the definition of ongoing profit-making activity—more than 5 orders or income above $8,000 per month—registration is required regardless of the platform
used. From 2025, live streamers must also display their BR number in their profile.
How are purchasing-agent and resale activities classified?
Professional purchasing services with a regular supply chain and marked-up resale prices = business activity
Occasional purchases for friends charged at actual cost = non-profit activity
Note: advertising yourself as a purchasing agent is treated as operating a business
Can a PO box be used as the registration address?
New rules in 2025 prohibit a PO box alone, but allow:
✓ A licensed virtual office, with a service agreement
✓ A residential address, with a notarised copy of the owner’s consent
References:
- Companies Registry — Registry for Trust and Company Service Providers
https://www.tcsp.cr.gov.hk/tcspls/search/public-search?k=ALL
