Sole proprietorship or limited company for an online store in Hong Kong?

Sole proprietorship: no separate legal entity. The owner is personally responsible for debts and contracts. Profits are taxed under profits tax at the unincorporated rates (7.5% on the first HK$2 million of assessable profits, 15% on the rest). There is no statutory audit requirement, though proper records are still needed.

Limited company: a separate legal entity. Shareholders' liability is generally limited to unpaid share capital. Profits tax is 8.25% on the first HK$2 million and 16.5% on the remainder (two-tiered rates; only one entity in a group of connected entities can use the lower tier). The company must have a company secretary, a registered office in Hong Kong, keep accounting records, file an annual return and have its accounts audited by a certified public accountant.

Other points: owners of a company can be paid salary or dividends, while a sole proprietor's drawings are not a deductible expense. Platforms, banks and suppliers sometimes prefer a company. Which fits depends on risk, size and plans, and a licensed professional can advise on your case.