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How to do business in Hong Kong and Macau

Legal considerations

The legal framework in Hong Kong is based on that of the UK, and many of the lawyers operating in Hong Kong trained in the UK and almost all are fluent in English.

The Law Society of Hong Kong website at: http://www.hklawsoc.org.hk/pub_e/lawfirmdirectory/ has a full list of lawyers operating in Hong Kong and the areas they cover.

Intellectual Property (IP)

IP rights are territorial, which means that they only give protection within the countries where they are registered. You should therefore consider registering your IP rights (if necessary) in all your export markets.

Hong Kong has a separate IP system from that of Mainland China and the importance and need for IP protection has long been recognised in Hong Kong, which has been crucial in its development as an international trading centre.

As a result its system is comprehensive and generally considered to be one of the most effective in Asia. Hong Kong is ranked 9th in the world for IP protection in the World Economic Forum’s Global Competitiveness Report 2018. See: http://reports.weforum.org/global-competitiveness-report-2018/country-economy-profiles/#economy=HKG.

The Hong Kong Intellectual Property Department (IPD) has responsibility for registration of trademarks, patents and designs, and has an electronic filing system. Visit: https://www.ipd.gov.hk/eng/home.htm for further details.

The EU has published a guide for SMEs about protecting IP in Hong Kong, at: http://www.china-iprhelpdesk.eu/content/hong-kong. Information on IP in Mainland China is available at: https://www.gov.uk/government/case-studies/uk-china-cooperation-on-intellectual-property.

[Source – FCO Overseas Business Risk: Hong Kong, DIT Trade and Investment guide: Hong Kong, gov.uk]

Standards and technical regulations

The Hong Kong Customs and Excise Department is responsible for consumer protection for weights and measures, consumer goods, toys and children’s products safety and trade descriptions. For further details visit: https://www.customs.gov.hk/en/consumer_protection/index.html. For Macau, visit the Macao SAR Government Portal at: https://www.gov.mo/en/.

Labelling your products

The Hong Kong Centre for Food Safety (CFS) at: https://www.cfs.gov.hk/english/food_leg/food_leg_nl_guidance.html provides details of regulations relating to food and drugs labelling.

Mandatory nutritional information must be shown on all pre-packaged foods, and nutritional claims about the contents must comply with regulations. However, food for special dietary uses, and food and formula consumed by children under the age of 36 months are exempt.

Contact the Department for International Trade (DIT) team in Hong Kong at: https://www.gov.uk/world/organisations/department-for-international-trade-hong-kong for further detailed information and advice on labelling requirements.

[Source – DIT Trade and Investment guide: Hong Kong, gov.uk, Macao SAR Government Portal]

 

Taxation

With one of the simplest tax structures and lowest tax rates in the world, Hong Kong imposes only three direct taxes, on profits, salaries and property.

None of these exceed 17%, and there are multiple and generous allowances and deductions too. There is no sales tax, VAT, withholding tax, capital gains tax, tax on dividends or estate tax.

For further information visit the Hong Kong Inland Revenue Department at: https://www.ird.gov.hk/eng/welcome.htm.

[Source – DIT Trade and Investment guide: Hong Kong, gov.uk, InvestHK]

Macau is a free port and most imported goods are tariff-free. Taxes are levied by the Macau Government’s Financial Services Bureau (DSF). For information on the Government’s fiscal incentives to encourage investment in Macau, visit the Macao Trade and Investment Promotion Institute (IPIM) at: https://www.ipim.gov.mo/en.

[Source – Macao Trade and Investment Promotion Institute (IPIM)]

 

Customs and documentation

The Hong Kong Customs and Excise Department at: https://www.customs.gov.hk/en/home/index.html is responsible for customs procedures and revenue collection in Hong Kong. For Macau contact the Macao SAR Government Portal at: https://www.gov.mo/en/ and the Macao Trade and Investment Promotion Institute (IPIM) at: https://www.ipim.gov.mo/en.

As Hong Kong is a free port, most goods are not subject to import duty. However, if you are importing liquors (30% and above alcohol by volume), tobacco, hydrocarbon oil or methyl alcohol you will need to obtain an import and export licence from the Hong Kong Customs and Excise Department, and a removal permit to re-export them.

Some goods – although not subject to duty - cannot be imported without a licence, such as pharmaceutical products and certain foodstuffs. A full list of these items is available on the Hong Kong Customs and Excise Department website at: https://www.customs.gov.hk/en/trade_facilitation/prohibited_articles/index.html.

For a full list of required permits and licences for Macau, visit the Macao SAR Government Portal at: https://www.gov.mo/en/browse/entrepreneurship-and-business/.

[Source – DIT Trade and Investment guide: Hong Kong, gov.uk, Macao SAR Government, Macao Trade and Investment Promotion Institute (IPIM)]

Complying with HMRC regulations to export

To export your goods to Hong Kong you must make export declarations to HMRC through the National Export System (NES). Visit: https://www.gov.uk/guidance/export-declarations-and-the-national-export-system-export-procedures for further details.

You can find out how to declare your exports to Hong Kong through the NES at: https://www.gov.uk/guidance/export-declarations-and-the-national-export-system-export-procedures. You must classify your goods as part of the declaration, including a Commodity Code and a Customs Procedure Code (CPC).

Commodity Codes and other details applying to exports in the UK Trade Tariff can be found at: https://www.gov.uk/trade-tariff.

Contact the HMRC Tariff Classification Service at: https://www.gov.uk/guidance/finding-commodity-codes-for-imports-or-exports for more help.

The EU’s Market Access Database (MADB) also has details about import tariffs. Visit: http://madb.europa.eu/madb/indexPubli.htm.

You must declare any goods that you take with you in your luggage to sell outside the EU. See: https://www.gov.uk/take-goods-sell-abroad for further information.

Temporary export of goods

You can use an ATA (Admission Temporaire/Temporary Admission) Carnet to simplify the customs procedures needed to temporarily take goods into Hong Kong. Visit: https://www.gov.uk/taking-goods-out-uk-temporarily for further information.

To apply for a temporary export licence, you will need to use the SPIRE system at: https://www.spire.trade.gov.uk/spire/fox/espire/LOGIN/login.

[Source – gov.uk]

Import requirements/documentation

Details of trade-related documents needed to import goods into Hong Kong are available on the Hong Kong Customs and Excise Department website at: https://www.customs.gov.hk/en/home/index.html. For Macau visit the Macao SAR Government Portal at: https://www.gov.mo/en/ and the Macao Trade and Investment Promotion Institute (IPIM) at: https://www.ipim.gov.mo/en.

Businesses in Hong Kong need to be registered within one month of operation, and some require additional licences. A complete list of the licences required is available on the Business Licence Information Service of the Hong Kong Trade and Industry Department website, at: https://www.success.tid.gov.hk/tid/eng/blics/index.jsp.

You may choose to work with a Hong Kong customs agent. Contact the DIT in Hong Kong at: https://www.gov.uk/world/organisations/department-for-international-trade-hong-kong#contact-us for further advice and lists of agents.

[Source – DIT, gov.uk, tid.gov.hk, Macao SAR Government, Macao Trade and Investment Promotion Institute (IPIM)]

 

Shipping your goods

You can use a freight forwarder to move your goods if you are not knowledgeable about international shipping procedures. A freight forwarder will have vast expertise and familiarity with local documentation requirements, regulations, transportation costs and banking practices in Hong Kong and Macau.

The British International Freight Association (BIFA) at: http://www.bifa.org/home and the Freight Transport Association (FTA) at: http://www.fta.co.uk/ can assist in locating freight forwarders to transport your goods to Hong Kong and Macau.

Posting goods

For information about sending goods by post to Hong Kong visit Royal Mail at: http://www.royalmail.com/hong-kong, and for Macau visit: https://www.royalmail.com/macao.

[Source – Royal Mail]

Shipping restricted, banned and dangerous goods

Certain goods are classed as restricted or dangerous. If you wish to import any of these goods into Hong Kong or Macau they are subject to special rules. For more information visit: https://www.gov.uk/shipping-dangerous-goods/what-are-dangerous-goods.

You can employ a local agent who will have knowledge of the latest import licensing requirements. For information and assistance contact the Department for International Trade (DIT) team in Hong Kong at: https://www.gov.uk/world/organisations/department-for-international-trade-hong-kong#contact-us.

Terms of delivery

You should ensure your contract includes agreement on terms of delivery using incoterms. Visit: https://www.gov.uk/guidance/international-trade-paperwork-the-basics#international-trade-contracts-and-incoterms for more information.

UK Export Finance

The UK Government can provide finance or credit insurance specifically to support UK exports through UK Export Finance (UKEF) – the UK’s export credit agency. See: https://www.gov.uk/government/organisations/uk-export-finance.

For up-to-date country-specific information on the support available see UKEF’s cover policy and indicators for Hong Kong at: https://www.gov.uk/guidance/country-cover-policy-and-indicators#hong-kong, and for Macau at: https://www.gov.uk/guidance/country-cover-policy-and-indicators#macao.

[Source – UKEF, gov.uk]


 

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