Is It Legal to Run a Business in a Hong Kong Residential Complex? Don’t Hesitate Anymore!

Is It Legal to Run a Business in a Residential Complex in Hong Kong?

In a highly developed commercial city like Hong Kong, the legality of operating a business from within a residential complex has long been a concern for many entrepreneurs and small business owners. With recent changes in Hong Kong's entrepreneurial environment and policy adjustments, more people are considering working from home or setting up small offices in residential areas. So, is running a company in a residential building legal? If you're still hesitating over this question, it may be time to take a closer look at the relevant regulations and real-world practices.

1. Regulations Under the Legal Framework

According to Hong Kong’s Building Management Ordinance and Town Planning Ordinance, residential properties are primarily intended for habitation and, in principle, should not be used for commercial purposes. This means that operating a business in a residential unit without proper authorization could potentially breach lease agreements or violate relevant laws.

However, reality often allows for more flexibility. In recent years, with the rise of remote work and the growing trend of Work from Home, it has become common for residents to carry out work-related tasks at home. Such activities - especially those with minimal disruption, such as freelancing, online sales, or design consultancy - usually do not attract special attention from property management companies.

2. Recent Cases and Policy Developments

At the beginning of 2025, some media outlets reported that certain private residential buildings in Kowloon Tong and Quarry Bay had started offering small office units under the guise of co-working spaces. These units, located inside residential towers, were converted into office spaces featuring meeting rooms and reception areas, and were rented out to startups and self-employed individuals.

The Buildings Department stated that it was investigating whether these operations violated the approved use of the buildings and reminded both landlords and tenants to comply with relevant regulations.

On the other hand, the Special Administrative Region has been actively promoting innovation, technology development, and support policies for small and medium enterprises SMEs. The 2025 Budget introduced further tax incentives and support measures for startups, reflecting an overall pro-entrepreneurship stance. However, this does not mean property usage restrictions can be ignored. The key issue remains how to pursue entrepreneurial goals while staying compliant with the law.

3. The Grey Area in Practice

Although the law prohibits converting residential properties for commercial use without permission, enforcement often leaves room for flexibility. For example, some property owners apply to the building management office for a change in usage classification or register their space as a Home Office, thereby gaining a degree of official recognition.

Some developers also specify during property sales that certain units can be used for both residential and commercial purposes, allowing limited commercial activity within those premises.

Another emerging phenomenon is the expansion of co-working brands into residential neighborhoods. By leasing multiple residential units, these providers create compact office spaces tailored for freelancers and remote workers. While the legality of such arrangements remains unclear, they have yet to face significant regulatory action due to their positive impact on local economies.

4. Risks and Recommendations

If you are considering starting a business in a residential complex, here are some practical suggestions

1. Review Your Lease Agreement Carefully check your property contract to see if there are clauses prohibiting commercial use.

2. Seek Approval from Management Even if no such clause exists, it is advisable to communicate with the building management to avoid future disputes.

3. Register Properly If formal company registration is required, submit the address information to the Companies Registry. Using a residential address for company registration may be acceptable under certain conditions, provided it complies with regulations.

4. Control Noise and Foot Traffic Ensure that your business operations do not disturb neighbors, thus avoiding complaints.

5. Secure Insurance Coverage Obtain appropriate commercial insurance for your workspace to protect against unexpected incidents.

5. Outlook on Future Trends

As digital economies evolve and work patterns shift, the boundaries between residential and commercial spaces are likely to become increasingly blurred. Indeed, several countries and regions have already begun exploring new mixed-use architectural models that allow both living and working functions within the same building.

As an international financial center, Hong Kong may also adapt its policies accordingly to meet the demands of the new era.

In conclusion, operating a business from a residential complex is not entirely impossible, but it requires careful risk assessment and adherence to legal frameworks. If your business is quiet, generates minimal traffic, and does not disrupt neighbors - and if you can gain the understanding and support of building management - this model might offer a cost-effective and efficient solution.

So why hesitate any longer? As long as you are well-prepared and ensure full compliance, your home can indeed be the launching point of your successful career.