Hong Kong offers various types of companies to cater to the diverse needs of foreign entrepreneurs, business owners, and investors. Nonetheless, foreign investors primarily opt for three company types, namely Limited Liability, Sole Proprietorship, and Partnership when establishing their business in Hong Kong.
- Limited Liability Company is a popular choice among business owners due to its owner-friendly benefits. As a separate legal entity, the company offers protection to personal assets from business risks and liabilities.
- Partnership allows two or more individuals to share ownership of a single company and raise funds as needed. However, partners also share the responsibility for the liabilities and risks associated with the actions of other partners.
- Sole Proprietorship is suitable for small-scale businesses with low risks. The setup process is fast and straightforward. However, this type of company does not provide separate legal entity status, and personal assets are not protected from business risks and liabilities.
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A non-profit organization in Hong Kong structured as a company limited by guarantee.
Limited Liability Companies in Hong Kong are further classified into Company Limited by Shares and Company Limited by Guarantee. However, most business owners, entrepreneurs, and investors prefer to set up their companies as Limited Liability Companies due to their numerous advantages over the other types. Consequently, a Limited Liability Company is the most common type of company in Hong Kong.