A possible option for simple, lower-risk small businesses. Consider personal liability, tax and future funding needs before deciding.
A sole proprietorship or partnership may suit a small business with a simple structure. LMY helps you arrange business registration and understand your ongoing responsibilities.
Unlimited liability: Owners or partners are personally responsible for business debts.
View formation packages ↓
Starting on your own or with partners? Tell us about your plans and request a quotation tailored to your business.
PACKAGE 01
Unlimited business set-up
HK$2,000
Excludes government fees, levies and taxes.
PACKAGE 02
Set-up + business registration address
HK$3,000
Excludes government fees, levies and taxes.
| Item | HK Unlimited (sole proprietor / partnership) | HK Limited Company | Offshore Company* |
|---|---|---|---|
| Separate legal entity | ✕ | ✓ | ✓ usually |
| Limited liability | ✕ unlimited liability | ✓ generally limited to unpaid share capital | ✓ subject to incorporation law |
| Keep sufficient HK business records for at least 7 years | ✓ | ✓ | ✓ where carrying on business in HK |
| HK statutory audit (general position) | ✕records still required | ✓ generally required (see exceptions below) | Depends on incorporation law and HK filing requirements |
| HK profits tax: first HK$2m of eligible assessable profits | 7.5% | 8.25% | Depends on source and entity type |
| HK profits tax: eligible assessable profits above HK$2m | 15% | 16.5% | Depends on source and entity type |
| Automatic HK tax exemption merely because it is “offshore” | ✕ | ✕ | ✕ |
| Generally suitable for | Low-risk, simple small businesses | Businesses needing limited liability, shareholders or stronger corporate standing | Cross-border structures requiring case-specific advice |
| Effective period: The Hong Kong two-tiered profits tax rates shown above apply from the year of assessment 2018/19 onwards (effective 1 April 2018). Rates apply to assessable profits, not turnover. Eligibility and connected-entity restrictions apply; where the two-tiered regime does not apply, the standard rates are 15% for unincorporated businesses and 16.5% for corporations. These standard rates apply from the year of assessment 2008/09 onwards (years of assessment commencing on or after 1 April 2008). Offshore tax treatment requires separate assessment. IRD: profits tax rates · Two-tiered regime and eligibility. | |||
The Hong Kong limited company column concerns private companies limited by shares; unlimited businesses mean sole proprietorships or general partnerships. The offshore column assumes a foreign limited-liability company, subject to its incorporation law.
Two-tiered rates apply to assessable profits, not turnover. Normally only one connected entity can elect for them. Corporate partners' shares of partnership profits attract the applicable corporate rates. The table excludes special concessions, personal assessment and minimum top-up taxes applicable to large multinational groups.
Statutorily dormant companies may qualify for audit exemption. Having no transactions or qualifying for simplified reporting does not itself remove the audit requirement. Hong Kong business records generally require at least seven years' retention.
References: IRD: two-tiered rates · Record keeping · CR: accounts and audit. Reviewed 14 September 2026; apply the rules to the relevant facts and assessment year.
*“Offshore company” is not a separate Hong Kong company type. Hong Kong tax treatment depends on the facts and the profit-producing operations, not solely on the place of incorporation.
Tell us your business activity, whether you are starting alone or with partners, and your planned start date.
Confirm the service scope, documents needed and separately charged items before agreeing on the engagement.
Provide the documents on the agreed checklist and complete the necessary checks and signatures.
Application follow-up and document delivery depend on the agreed scope. Timing depends on complete information and the relevant authority's processing.
No. HK$2,000 is the Essential package service fee. Government fees, levies and taxes, including applicable business registration charges, are additional. The final written quotation sets out the scope and fees.
Tell us your business activity, whether it will be a sole proprietorship or partnership, the number of partners if applicable, whether you have a business address, and your planned start date.
Timing depends on complete documentation, your circumstances and the relevant authority's processing. Share your planned start date so we can discuss a feasible schedule.
Please mention these additional service needs when you enquire. Any included services and their fees will be specified in the final written quotation.
Yes. Tell us who will be involved, their roles and your business plans. We can then discuss your needs and the appropriate service arrangements.
Office Address: Unit A11, 5th Floor, Por Mee Factory Building, No. 500 Castle Peak Road, Cheung Sha Wan, Kln
Office Hours: 9:00 am – 6:00 pm (Monday to Saturday)