What You Need to Know Before Starting an Import/Export Business in Hong Kong

Hong Kong's status as a free port means that, unlike most jurisdictions, there is no general import or export licence required to start a trading business. However, this does not mean the process is unregulated. Before you incorporate a company and begin shipping goods, you must understand the specific licensing requirements for controlled items, the correct HSIC code classification, tax registration obligations, and the customs documentation that applies to your trade.

This post explains the legal and regulatory framework under the Import and Export Ordinance (Cap. 60), the Companies Ordinance (Cap. 622), and the Inland Revenue Ordinance (Cap. 112), so you can avoid penalties, delays, or enforcement action.

Do You Need a Licence to Import or Export Goods in Hong Kong?

No general licence is required for most goods, but specific products — including pharmaceuticals, strategic commodities, radioactive substances, ozone-depleting substances, and certain foodstuffs — require a permit from the Trade and Industry Department (TID) or other designated authorities.

The Import and Export Ordinance (Cap. 60) establishes the basic principle that all imports and exports are unrestricted unless a specific regulation imposes a licensing requirement. The Trade and Industry Department (TID) administers the licensing system, and the relevant subsidiary legislation — such as the Import and Export (Strategic Commodities) Regulations (Cap. 60G) and the Import and Export (General) Regulations (Cap. 60A) — lists the controlled categories.

"Any person who imports or exports any article without a licence, where a licence is required, commits an offence and is liable on conviction to a fine of $500,000 and to imprisonment for 2 years." — Section 6A, Import and Export Ordinance (Cap. 60)

The key controlled categories include:

• Strategic commodities: Arms, ammunition, military equipment, dual-use goods (e.g., advanced electronics, chemicals, software), and items listed under the Wassenaar Arrangement. Apply to TID's Strategic Commodities Control Branch.
• Pharmaceuticals and medicines: Import/export licences from the Department of Health under the Pharmacy and Poisons Ordinance (Cap. 138).
• Radioactive substances and irradiating apparatus: Licence from the Radiation Board under the Radiation Ordinance (Cap. 303).
• Ozone-depleting substances: Permit from the Environmental Protection Department under the Ozone Layer Protection Ordinance (Cap. 403).
• Pesticides: Licence from the Agriculture, Fisheries and Conservation Department under the Pesticides Ordinance (Cap. 133).
• Endangered species: Permit from the Agriculture, Fisheries and Conservation Department under the Protection of Endangered Species of Animals and Plants Ordinance (Cap. 586).
• Food, meat, poultry, and milk products: Import licences from the Centre for Food Safety under the Public Health and Municipal Services Ordinance (Cap. 132).

If your goods fall into none of these categories, you do not need a pre-import or pre-export licence. However, you must still comply with customs declaration requirements.

What HSIC Code Should You Use for an Import/Export Business?

The correct HSIC code for a general import/export trading company is HSIC 4510 — Import and export trade. If your business also involves wholesale distribution, warehousing, or retail, you may need additional codes.

The Hong Kong Standard Industrial Classification (HSIC) Version 2.0, published by the Census and Statistics Department, is the official system for classifying business activities in Hong Kong. It is used by the Companies Registry, the Inland Revenue Department, and the Trade and Industry Department for statistical and regulatory purposes.

For a pure import/export trading company — one that buys goods from overseas suppliers and sells them to overseas buyers without physically handling the goods in Hong Kong — the primary code is:

• HSIC 4510 — Import and export trade

This code covers "wholesale trade on own account, i.e. buying and selling goods on own account, including the import and export of goods for resale." It does not include retail or wholesale activities where the goods are physically stored or sold from a Hong Kong premises.

If your business model includes any of the following, you must register additional HSIC codes:

• Wholesale of specific goods from a Hong Kong warehouse: Use the relevant 46xxx code (e.g., HSIC 4610 — Wholesale on a fee or contract basis; HSIC 4630 — Wholesale of food, beverages and tobacco; HSIC 4640 — Wholesale of household goods).
• Retail sales to Hong Kong consumers: Use the relevant 47xxx code (e.g., HSIC 4710 — Retail sale in non-specialised stores).
• Warehousing and storage: Use HSIC 5210 — Warehousing and storage.
• Freight forwarding or logistics: Use HSIC 5229 — Other transportation support activities.

Selecting the wrong HSIC code can lead to incorrect tax filings, missed licence requirements, and potential penalties. The Companies Registry and IRD cross-reference HSIC codes with business registration records, so accuracy matters from day one.

What Are the Company Registration Steps for an Import/Export Business?

You must incorporate a company under the Companies Ordinance (Cap. 622), obtain a Business Registration Certificate from the Inland Revenue Department, and register for the relevant licences before you begin trading.

The process involves three distinct legal steps:

1. Company Incorporation

Under the Companies Ordinance (Cap. 622), you must file the following documents with the Companies Registry:

• Incorporation Form (NNC1) — includes the company name, registered office address, details of directors and company secretary, and share capital information.
• Articles of Association (if not using the default model articles).
• A fee of HK$1,545 (as of 2025) for standard incorporation.

The Companies Registry typically issues the Certificate of Incorporation within 4 working days for paper filings, or within 1 hour for the e-Registry service.

2. Business Registration

Within one month of incorporation, you must apply for a Business Registration Certificate from the Inland Revenue Department (IRD). The fee is HK$2,150 per year (as of 2025) for a one-year certificate, or HK$3,950 for a three-year certificate.

The Business Registration Ordinance (Cap. 310) requires every person carrying on a business in Hong Kong to register. Import/export trading is considered a business activity, so this step is mandatory.

3. Licence Applications

If your goods fall into any controlled category listed above, you must apply for the relevant licence from the appropriate government department before the first shipment. Processing times vary:

• Strategic commodities licence: 2–4 weeks for standard applications; longer for complex items.
• Pharmaceutical import/export licence: 4–6 weeks.
• Food import licence: 2–3 weeks.

Do not begin trading until all licences are in hand. The penalties for unlicensed import/export are severe.

What Tax Obligations Apply to Import/Export Businesses?

Hong Kong operates a territorial tax system: only profits arising in or derived from Hong Kong are subject to profits tax at the standard rate of 16.5% (for corporations) or 15% (for unincorporated businesses). Import/export businesses must carefully document the source of their profits.

The Inland Revenue Ordinance (Cap. 112) imposes profits tax only on profits that have a Hong Kong source. For an import/export business, the key question is: where are the contracts of sale concluded, and where are the profits earned?

The IRD's Departmental Interpretation and Practice Notes (DIPN) No. 21 provides detailed guidance. In general:

• If you buy goods from overseas and sell them to overseas buyers, and the contracts are concluded outside Hong Kong, the profits are considered offshore and are not subject to Hong Kong profits tax.
• If you buy goods from Hong Kong suppliers or sell goods to Hong Kong customers, the profits are considered onshore and are taxable.

To claim offshore treatment, you must maintain robust documentation:

• Contracts of sale and purchase.
• Correspondence with suppliers and customers.
• Bills of lading, airway bills, and shipping documents.
• Evidence of where negotiations took place and where contracts were signed.

The IRD actively audits import/export businesses. If you claim offshore profits, you must file a tax return with a detailed explanation and supporting evidence. Incorrect claims can result in back taxes, penalties, and interest.

Ongoing Compliance Execution

Ongoing statutory obligations are handled seamlessly through Captime's dedicated Hong Kong company secretary service, providing a licensed local representative and automated annual return management.

What Customs Declarations Are Required?

Every import and export shipment must be declared to the Customs and Excise Department using the Trade Declaration System, unless the goods are exempt under the Import and Export (Registration) Regulations (Cap. 60E).

Under the Import and Export (Registration) Regulations (Cap. 60E), importers and exporters must lodge a trade declaration with the Census and Statistics Department within 14 days of importation or exportation. The declaration is submitted electronically through the Government's DTI (Digital Trade and Customs) system.

Key requirements:

• Import declarations: Required for all imports except exempted items (e.g., personal effects, samples of no commercial value, goods valued under HK$4,600).
• Export declarations: Required for all exports except exempted items.
• Declaration fee: HK$0.50 per HK$1,000 of the value of the goods, subject to a minimum of HK$20 and a maximum of HK$200.

Failure to lodge a declaration within the 14-day period attracts a penalty of up to HK$50,000 and imprisonment for up to 2 years.

What Are the Common Compliance Pitfalls for New Import/Export Businesses?

The most frequent compliance failures involve incorrect HSIC code selection, failure to obtain licences for controlled goods, inadequate record-keeping for offshore profit claims, and late trade declarations.

Based on enforcement data from the Customs and Excise Department and the IRD, the following issues arise most often:

1. Incorrect HSIC code: Many new businesses register under HSIC 4510 but also engage in wholesale or retail without adding the correct secondary codes. This can trigger IRD audits and incorrect tax assessments.

2. Missing licences: Businesses trading in dual-use goods (e.g., laboratory chemicals, industrial machinery with military applications) often assume no licence is needed. The TID's Strategic Commodities Control Branch publishes a detailed checklist — consult it before any shipment.

3. Inadequate offshore profit documentation: The IRD requires contemporaneous evidence. If you cannot produce contracts, correspondence, and shipping documents for the relevant period, your offshore claim will likely be rejected.

4. Late trade declarations: The 14-day window is strict. Set up an automated reminder system or use a customs broker to ensure compliance.

5. Failure to renew business registration: The Business Registration Certificate must be renewed annually or triennially. Late renewal attracts a penalty of up to HK$3,000.

Practical Takeaway

Before you incorporate your import/export company in Hong Kong, confirm that your goods do not require a licence under the Import and Export Ordinance (Cap. 60). If they do, apply to the TID or the relevant department early — processing times can delay your first shipment by weeks. Select the correct HSIC code — HSIC 4510 for pure trading, with additional codes if you handle goods in Hong Kong. Maintain meticulous records of all contracts, correspondence, and shipping documents to support any offshore profit claims. And never miss a trade declaration deadline.

For a complete list of HSIC codes relevant to your business activities, use the HSIC Code Finder at /hsic-finder. It cross-references your business description with the official V2.0 classification and helps you avoid the most common compliance error.