How many types of companies are available in Hong Kong? Which type of company is the most common in Hong Kong?

There are several types of companies in Hong Kong that are suitable for different needs of foreign business owners, entrepreneurs, and investors. However, foreign investors normally choose three types of companies including Limited Liability, Sole Proprietorship, and Partnership to set up a business in Hong Kong.

• Limited Liability: Most people prefer to choose a Limited Liability Company to start their business because of its advantages for the owner. The company is the legal entity and separate from the owner means personal assets are protected by law from the liabilities and businesses’ risks.
• Sole Proprietorship: This type of company is suitable for low risk and small scale businesses. The process to set up a sole proprietorship is simple and fast. However, the company is not a separate legal entity and personal assets are not protected from the liabilities and businesses’ risks.
• Partnership: In this type of company, two and more people can join and share the ownership of one single company and the ability to raise funds needed by the business. Partner also shares the responsibility of the liability and the risk for the deeds of the other partners.

Read more: Hong Kong company limited by guarantee

In Hong Kong, Limited Liability Company categorizes further into Company Limited by Shares and Company Limited by Guarantee. Between these three types of companies, business owners, entrepreneurs, and investors usually would decide to set up their companies as Limited Liability Company as this type of company offers more advantages compared to other two companies types which make Limited Liability Company as the most common type of company in Hong Kong.