OCTIS vs sole proprietorship or limited company in Hong Kong
Set-up cost, tax rate, audit duty and personal liability compared.
Last checked · 7 sources
Otty's short answer
A sole proprietorship costs only the business registration certificate (HK$2,350 for one year) and files profits tax at 7.5% on the first HK$2 million. A limited company costs HK$1,545 more to incorporate, pays 8.25% on that band, needs an audit, but separates your personal assets from business debts. Choose a company once you hire, borrow, sign large contracts or take outside investors.
Side by side
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| What matters | OCTISHong Kong company + OCTIS global plan | Sole proprietorship | Limited company |
|---|---|---|---|
| Registration with Companies Registry | Yes, included in the package | No | Yes, HK$1,545 online |
| Business registration certificate | First year included in the package | HK$2,350 for 1 year | HK$2,350 for 1 year |
| Annual return to Registry | Filed on time; OCTIS prepares it | None | HK$105 if on time |
| Profits tax, first HK$2 million | 8.25% | 7.5% | 8.25% |
| Profits tax above HK$2 million | 16.5% | 15% | 16.5% |
| Separate legal entity | Yes | No | Yes |
| Personal liability for debts | Limited to unpaid shares | Unlimited | Limited to unpaid shares |
| Audited accounts required | Yes; independent HK CPA firm, coordinated by OCTIS | Not under Companies Ordinance | Yes, unless dormant |
| Needs a company secretary | Yes, OCTIS's licensed partner, first year included | No | Yes, in Hong Kong |
| Needs a Hong Kong registered office | Yes, in Hong Kong | No | Yes |
| Can issue shares to investors | Yes | No | Yes |
| Time to start | Online filing, then register | Register within 1 month of starting | Online filing, then register |
Data sources & disclaimer: Comparison data was compiled from publicly available sources — including the competitors' own published pricing and feature pages — captured on 9 November 2026. Figures reflect the typical or advertised pricing at that time and may have changed since; plans, inclusions and prices vary by provider, region and promotion. OCTIS is independent and not affiliated with the named companies; all trademarks belong to their respective owners. This comparison is provided in good faith for general information only and is not professional, legal or financial advice — please verify current details with each provider before deciding.
Which one fits you
OCTIS · Hong Kong company + OCTIS global plan
Choose OCTIS if you want a limited company from day one, with the secretary, accounts and filings run for you.
Sole proprietorship
Choose a sole proprietorship if you work alone, test an idea, have low risk and want the lowest cost and paperwork.
Limited company
Choose a limited company if you hire staff, sign large contracts, borrow, take investors, or want business debts kept apart from your home and savings.
What the table does not show
Tax: the gap is small
Profits tax has two tiers. For the first HK$2 million of assessable profit, a corporation pays 8.25% and an unincorporated business pays 7.5%. Above that, rates are 16.5% and 15%. The rate gap is one percentage point at most. If you own several sole proprietorships, or several connected companies, the lower tier applies to only one of them, so splitting a business to use it twice does not work.
Liability is the real difference
A sole proprietor and the business are the same person in law. If the business cannot pay a supplier, a landlord or a lender, the creditor can pursue your personal assets. A limited company is a separate legal person, so shareholders are generally liable only for unpaid share capital. Banks and landlords often still ask directors for personal guarantees, so check what you sign. Ask a lawyer for advice on your own situation.
Compliance cost after day one
A company must keep a company secretary and registered office in Hong Kong, file an annual return, keep statutory registers and have its accounts audited by a practising CPA, unless it is dormant. The Inland Revenue Department generally expects audited financial statements with a company's profits tax return. A sole proprietor files a tax return with accounts but has no Companies Ordinance audit. Both owe the business registration fee each year they trade.
Where OCTIS fits
If you decide to incorporate, OCTIS registers the Hong Kong company, acts as company secretary through a licensed partner, keeps your books, files profits tax and arranges the audit with a Hong Kong CPA practice. Already paying another provider? Send us your current bill and we come in 10–30% off it.
Frequently asked questions
How much does it cost to register a sole proprietorship in Hong Kong?
You register with the Inland Revenue Department, not the Companies Registry. A one-year business registration certificate costs HK$2,200 plus a HK$150 levy, HK$2,350 in total for 2026-27. Apply within one month of starting business.
Is a limited company or sole proprietorship better in Hong Kong?
Sole proprietorship is cheaper and simpler. A limited company protects personal assets and lets you issue shares. Many owners start as a sole proprietor and incorporate once revenue, staff or contract risk grows.
What is the profits tax rate for a sole proprietor?
7.5% on the first HK$2 million of assessable profits and 15% on the rest. Corporations pay 8.25% and 16.5%. The IRD publishes both rates on its profits tax page.
Do I need to pay MPF as a sole proprietor?
If you hire employees aged 18 to 64, you must enrol them in an MPF scheme within 60 days and contribute 5% of relevant income up to HK$1,500 per month for each employee, on both sides.
Can I convert a sole proprietorship into a company later?
Yes. You incorporate a new company and transfer the business, assets and contracts to it. Contracts, licences and bank accounts need to be moved or re-signed, so plan the date with your accountant.
Sources
Checked on the date above. Links open the provider's or regulator's own page.