Policy Analysis and Practical Guide for Hong Kong Residents Setting Up Companies on the Mainland

In recent years, with the accelerated construction of the Guangdong-Hong Kong-Macao Greater Bay Area and the deepening economic and financial cooperation between the mainland and Hong Kong, an increasing number of Hong Kong residents have chosen to set up companies in the mainland to seek broader market opportunities and development space. This trend not only reflects the increasingly close trade and economic relations between the two places but also demonstrates the recognition and confidence of Hong Kong residents in the business environment on the mainland.

Policy Support and Opportunities

Since the release of the outline plan for the development of the Guangdong-Hong Kong-Macao Greater Bay Area in 2025, the central government has introduced a series of policies aimed at facilitating entrepreneurship and employment for people from Hong Kong, Macao, and Taiwan. For instance, the notice regarding further facilitation of the development of Hong Kong and Macao residents in the mainland clearly states that the approval process for setting up businesses by Hong Kong and Macao residents will be simplified, along with providing tax incentives. The Foreign Investment Law and its implementation regulations also provide legal protection and equal treatment for foreign enterprises, including those from Hong Kong.

For Hong Kong residents who wish to establish companies in the mainland, the most significant changes at present lie in the reduction of entry barriers and improvement in service efficiency. For example, the pilot program of separation of licenses and permits implemented in cities like Beijing and Shanghai has greatly reduced the amount of materials required to apply for a business license; meanwhile, the multiple certificates into one system allows various certificates that were previously handled separately to be registered all at once. These reform measures significantly enhance efficiency and reduce startup costs.

Basic Procedures for Setting Up a Company

Capital Requirements

According to the latest regulations, both limited liability companies and joint-stock companies no longer have rigid minimum capital requirements. Instead, shareholders can freely agree on their investment ratios and timeframes. This means that Hong Kong investors can flexibly arrange their funding plans based on their actual situations. However, it is important to ensure sufficient working capital to meet daily operational needs during actual operations.

Type of Enterprise Selection

Hong Kong residents can choose from various forms of enterprise structures such as sole proprietorships, partnerships, or limited liability companies. Among these, limited liability companies are most commonly selected due to their independent legal status. Such types of companies not only effectively isolate personal property risks but also facilitate the introduction of external investors or equity financing activities in the future.

Name Approval

Before formally submitting the industrial and commercial registration, the first step is to pass the pre-approval procedure for the company name. Applicants can submit the proposed business name through an online platform and wait for approval from relevant departments. Typically, this process takes a short time. However, if the selected name is too similar to existing ones, it may be rejected.

Obtaining Business Licenses

After obtaining name approval, applicants can prepare relevant documents and submit registration applications to the local market supervision department. Key documents include but are not limited to the draft articles of association, copies of shareholder identity proofs, and lease contracts for office premises. It should be noted that specific requirements may vary across regions, so it is advisable to consult the local administration for industry and commerce for detailed guidance beforehand.

Tax Registration and Other Permits

After completing the industrial and commercial registration, timely tax registration procedures must be carried out with the tax authorities, and tax obligations should be declared according to regulations. Additionally, if the industry falls under special regulatory categories such as food processing or pharmaceutical manufacturing, additional qualification certifications or permit certificates may be required.

Case Studies

To better understand the practical application of the aforementioned theoretical knowledge, let us consider some case studies

Case One Mr. Zhang is a Hong Kong businessman with many years of international trade experience. He decided to expand his business to Shenzhen in early 2025 and established his own trading company. Thanks to the favorable policies provided locally, his registration process was completed in just three days. Today, this company has become one of the key import-export agency service providers in the region.

Case Two Ms. Li is a young designer who utilized her design resources accumulated in Hong Kong to establish a small studio in Guangzhou specializing in home decor product development. Despite facing initial financial pressures, her business gradually stabilized thanks to good product innovation capabilities and marketing strategies, successfully attracting attention from several venture capital firms.

Conclusion

In summary, for Hong Kong residents who intend to develop on the mainland, as long as they fully understand relevant policy regulations and formulate reasonable plans based on their own characteristics, they can smoothly embark on new career chapters. Of course, during this process, they also need to constantly pay attention to market dynamics and maintain keen insight to seize every potential opportunity. Hopefully, the information provided in this article will help more aspiring individuals realize their dreams!