How to Start a Retail Business in Hong Kong: Licences, Codes, and Compliance

Retail in Hong Kong: An Overview

Hong Kong's retail sector falls under HSIC Section G: Import/Export, Wholesale and Retail Trades. The retail-specific codes are in Division 47, with sub-classes covering everything from supermarkets (471001) to watches and jewellery (477201) to duty-free shops (477901).

Step 1: Choose the Right HSIC Code for Your Retail Business

Before you register, identify the most accurate HSIC code for your shop. Here are the most common retail sub-classes:

Step 2: Incorporate Your Company

For most retail businesses, incorporating a Private Limited Company is recommended for liability protection. Key considerations:

• Company name: Must be unique and not misleading
• Registered address: Must be a physical address in Hong Kong
• Director: At least one, can be of any nationality
• Share capital: Minimum HK$1 (but consider practical amounts)
• Business Nature: Use your HSIC sub-class title as a guide

Typical cost: HK$1,700–2,500 for DIY; HK$4,000–8,000 with a formation agent.

Step 3: Business Registration

All businesses operating in Hong Kong must register with the Inland Revenue Department (IRD) and obtain a Business Registration Certificate (BRC). This is separate from company incorporation.

• Cost: HK$2,150 per year (as of 2024)
• Timeline: Can be done same day as incorporation
• Renewal: Annual

Step 4: Required Licences for Retail

Depending on what you sell, additional licences may be required:

Food Retail

• Food Business Licence (Food and Environmental Hygiene Department, FEHD)
• For restaurants/takeaways: Separate food premises licence
• For alcohol: Liquor Licence

Pharmaceutical and Medical Products

• Pharmaceutical products retail requires a Pharmacy Registration and licensed pharmacist

Tobacco

• Tobacco Retailer's Licence (Tobacco Control Office)

Firearms and Ammunition

• Strict licensing under the Firearms and Ammunition Ordinance — most retail not permitted

Jewellery with Precious Stones

• Anti-money laundering registration with Customs and Excise Department if turnover exceeds HK$120,000/month

Step 5: Open a Corporate Bank Account

This is often the most challenging step for new retail businesses. Tips:

1. Declare your Business Nature precisely (e.g. "Retail sale of fashion apparel in non-specialised stores" rather than "retail business")
2. Prepare a lease agreement for your shop premises
3. Have supplier invoices or purchase orders ready to show your supply chain
4. Some banks will ask for a business plan — prepare one

Step 6: MPF Enrolment

As soon as you hire your first employee, you must enrol in the Mandatory Provident Fund (MPF) scheme within 60 days. Employer contribution: 5% of relevant income (up to HK$1,500 per month).

Common Compliance Pitfalls for Retailers

• Not renewing BRC: Failure to renew your Business Registration Certificate is a criminal offence
• No display of prices: Price tags are required under the Weights and Measures Ordinance for many goods
• Operating without a licence: For food, tobacco, pharmaceutical retail — operating unlicensed can result in prosecution
• Not collecting MPF: Heavy penalties apply

Useful Resources

• HSIC Code Finder — Find the exact code for your retail category
• FEHD Food Business Licence Application
• Companies Registry e-Registration
• IRD Business Registration

Ready to identify your exact HSIC code? Search the finder now →