In 2024, Hong Kong’s international market’s total merchandise trade was valued at HK$9,465 billion and in 2023, its offshore trade at HK$4,987 billion. These margins estimate the high transaction range a typical Hong Kong trading company operates in annually.

This guide covers everything you need to know about starting your own Hong Kong trading company, from registration requirements to documentation and the step-by-step operational process.

Key Takeaways

• Hong Kong is a popular location for trading companies because of low taxes, relaxed trade policies, and fast company incorporations.
• Although there are sole proprietorships and partnership businesses, most Hong Kong trading companies are created as private limited companies. 
• To start a Hong Kong trading company, business owners must go through the necessary steps, like selecting a company name, preparing the right documents, opening a business account, and completing all the other appropriate steps.
• Hong Kong trading companies can use DSGPay virtual accounts to manage cross-border payments more efficiently, especially when dealing with multiple markets.

What is a Trading Company?

In simple terms, a trading company refers to a company that buys and sells goods while gaining its own profit. The company acts as a middleman between a supplier and a customer without manufacturing its own products to sell. These types of companies are good at sourcing and distributing products and handling logistics sectors for imports and exports.

What is a Hong Kong Trading Company?

A Hong Kong trading company is a business entity set up to source, buy, and sell goods across different markets. It does not need to manufacture products; instead, it acts as a bridge between suppliers and buyers worldwide.

These companies participate in Hong Kong’s vibrant trading ecosystem, allowing entrepreneurs to take advantage of the city’s streamlined regulations, efficient logistics, and international banking network.

Why Hong Kong is Popular for Trading Businesses

Hong Kong offers unmatched advantages for trading companies. Some of the basic benefits of opening a Hong Kong trading company:

• Strategic Locations: It has multiple gateways into China and other locations through its ports and airports. This helps in connecting to global markets easily and efficiently.
• Offshore Profit Exemption: Profits obtained outside of Hong Kong can be exempted from tax if they can be proven to the Inland Revenue Department (IRD).
• Tax Benefits: Profits earned within Hong Kong are taxed under a two-tiered tax system, 8.25% for up to HKD 2M and 16.5% for above HKD 2M.
• No Capital Requirements: There is no minimum paid-up capital needed to start a Hong Kong trading company.
• Relaxed Trade Policies: Most imports and exports face zero tariffs or quotas.
• Fast Incorporation: Companies can be registered online within 1 to 4 hours.
• Global Banking Access: Businesses can access a variety of multi-currency account options through traditional banks and licensed fintech platforms like DSGPay.
• Capable Ports: Hong Kong’s ports are built to handle millions of TEUs annually, making them perfect for import/export operations.

The combination of all these factors and its vast trade networks provides a suitable place and a strong foundation for any Hong Kong trading company.

A Step-by-Step Guide on How to Start Your Hong Kong Trading Company

Here are the steps an entrepreneur can follow to open their Hong Kong trading company. 

Step 1 – Choose Your Business Structure

Most trading companies register as Private Limited Companies (Ltd) for liability protection, credibility with international buyers and ease of banking.

Alternative options like Sole Proprietorship or Partnerships are suitable for smaller or family-owned businesses.

Step 2 – Select and Reserve a Company Name

The name must be unique and must end with “Limited”, NOT “Ltd”, or “Incorporated”.

• Check the availability of a company name through the Companies Registry eSearch. This is a free service.
• Avoid restricted terms such as “Bank”, “Insurance”, or “Trust”.
• Prepare 2 to 3 backup options.

If you’re submitting online, the name approval is instant.

Step 3 – Prepare Required Documents and Details

The essential documents you will need are:

• Company name and business structure documents.
• Registered office address in Hong Kong. A virtual office address is also allowed.
• At least one director. Can be from any nationality, above 18 years, and no residency is required.
• At least one shareholder. This can be the same as the director.
• Identification documents for a company secretary. Can be an HK resident or a corporate service provider.
• Articles of Association
• Director/shareholder IDs in copies. This could be their passports.

Each of these documents can be submitted in person or digitally to the appropriate websites.

Step 4 – Register Your Company With Companies Registry (CR)

Online Registration is recommended via the e-Registry website of the companies registry platform.

• Submit NNC1 Incorporation Forms and Articles of Association.
• Pay fees: HKD 1,720 for Incorporation + HKD 2,250-7,110 for 1-3 years of Business Registration.
• Receive the certificate of incorporation and business registration certificate within 1 hour.
• Physical submission takes about 4 working days to process.

Step 5 – Open a Business Account

A business account is essential for receiving international payments. Some popular options entrepreneurs can consider are:

• Traditional Banks: HSBC, Standard Chartered, DBS, Bank of China
• Virtual Banks: Ant Bank, Airstar Bank Limited, Fusion Bank Limited
• Fintech Providers: DSGPay

The required documents that may be demanded by the banks or platforms include: Certificate of Incorporation, Business Registration Certificate, Director’s Passport, Proof of Business Activity (contract or website), and Company Profile/Trading Plan.

💡Tip:

Due to stringent KYC requirements, business owners and non-residents might find faster success in opening a multi-currency business account.

Step 6 – Register for Import/Export Licences.

Most goods do not require special licences, but registering with Hong Kong Customs is necessary. The reasons for them include:

• When you’re submitting commodity details and an importer/exporter declaration.
• It gets you free registration with instant approval.
• It is required for customs declaration and trade statistics.
• Moving controlled goods, such as pharmaceuticals and strategic commodities, requires specific licences.

Step 7 – Set Up Accounting and Compliance

Mandatory compliance includes:

• Appointing a Hong Kong Certified Public Accountant (CPA) for annual statutory audits and submission to the IRD.
• Filing the annual returns (HKD 105) with the Companies Registry.
• Submit profit tax returns if applicable, even if there is no activity or no profit, unless the IRD grants an exemption.
• Maintaining a significant controller register (SCR).
• Tracking import/export declarations and trade records for compliance.

Step 8 – Launch Trading Operations

After incorporation and compliance setups, businesses can start full operations in:

1. Payment Solutions: Set up your business accounts and payment solutions to receive and send funds, pay suppliers, and manage cross-border transactions.
2. Connecting and Outsourcing: Locate the best places for customers and the best suppliers in Hong Kong and other markets you’d be operating in.
3. Warehouse and Logistics: Use Hong Kong’s bonded warehouses or logistics providers.
4. E-Commerce Platforms: Establish online sales channels on Shopify, Amazon, or other regional marketplaces and link them with appropriate payment outlets.
5. Hiring Employees: As operations scale, hire local or overseas staff in compliance with Hong Kong’s Employment Ordinance.

By following each of these steps, an entrepreneur can start their Hong Kong trading company easily and be fully operational within a month, barring any complications or challenges.

How Hong Kong Trading Company Works

A Hong Kong trading company typically operates by sourcing products from suppliers, negotiating the rules, managing logistics, and selling to international clients.

The key operational aspects of how a Hong Kong trading company works include:

• Sourcing Products: Identify a reliable supplier in Hong Kong, mainland China, or other regions, considering quality, prices, and production capacity.
• Negotiating Terms: Set pricing, qualities, and delivery schedules with suppliers to optimise profitability.
• Logistics and Shipping: Coordinate shipments via sea, air, or courier, leveraging Hong Kong’s advanced logistics infrastructure.
• Receiving Payments:  Accept payments in multiple currencies via business accounts or virtual accounts.
• Compliance and Documentation: Maintain records of invoices, purchase orders, customs declarations, and financial statements to ensure regulatory compliance.

Common Challenges Hong Kong Trading Company Might Face

When setting up a Hong Kong trading company, complications can arise due to various reasons. Some of the more common challenges business owners face when starting their Hong Kong trading companies are:

• Issues in Remote Setup: If you’re opening a company remotely, you can use corporate service providers for a registered address, the company secretary, and compliance filing. 
• Audit Compliance: Engage a Hong Kong CPA early and maintain accurate records. This way, audits become a process you aren’t afraid of.
• Banking Approval: Opening a business account requires submitting a detailed trading business plan, contracts, and your website. As an alternative, business owners can use a virtual payment account to resolve this challenge.

Payment Solutions for Hong Kong Trading Companies

Managing payments is a critical part of running a Hong Kong trading company, especially when dealing with overseas suppliers, international buyers, and multiple currencies.

DSGPay is a licensed payment service provider operating under a Hong Kong Money Service Operator (MSO) license, offering payment solutions designed to support the practical needs of Hong Kong trading companies.

How DSGPay Supports Hong Kong Trading Companies

• Global Named Accounts: With DSGPay, your clients can trust each virtual account they are paying into because it carries your unique business tag or brand name.
• Collect and Payout HKD Like a Local: Accept and make HKD payments locally in Hong Kong for faster settlement and lower transaction costs.
• Hold and manage 30+ currencies: Operate in HKD, USD, EUR, GBP, AUD, CNY, and more.
• Low FX Spreads: Seamlessly convert between currencies at the best and lowest available rates on the DSGPay app.
• 100% Online Onboarding: Seamless onboarding experience without in-person visits.
• Seamless API Integration: Easily automate or integrate payment portals and channels with DSGPay’s developer-friendly single-faced API settings.

This setup allows Hong Kong trading companies to manage cross-border payment flows more efficiently while supporting growth across multiple markets.