How to set up an unlimited company in Hong Kong

An unlimited company is the simplest and lowest-cost form of company in Hong Kong. This article explains the full process, costs and FAQs for setting up an unlimited company.

An unlimited company (sole proprietorship / partnership) only needs to apply for a Business Registration Certificate and does not need to file documents with the Companies Registry, so the process is simpler than for a limited company.
From April 2026 the business registration fee is HK$2,350 (one year) / HK$6,170 (three years).
The owner of an unlimited company is personally liable for the company's debts, so it suits low-risk small businesses.
An unlimited company cannot be converted directly into a limited company. If needed, a separate limited company must be formed.

You first need to choose a company type before forming a company. If you are weighing up the difference between a limited and an unlimited company, see: “Limited or unlimited company? 3 angles to help you decide quickly”

This article focuses on the registration process, costs and FAQs for unlimited companies.

Definition of an unlimited company

An unlimited company is the lowest-cost, simplest form of company, suitable for small businesses or individuals testing the waters.

An unlimited company is a business with unlimited liability, whether a sole proprietorship or a partnership. If the business does not have enough funds to repay its debts, the owner and partners must bear unlimited liability and repay the business's debts from their personal assets.

Benefits of registering an unlimited company

The advantages of an unlimited company are lower start-up and running costs, quick set-up, and tax filing that the owner can handle personally, which reduces audit costs. Even where assessable profits exceed HK$2 million, the tax rate is only 15%, which is lower than for a limited company. Relatively speaking, an unlimited company is well suited to small businesses.

Process for setting up an unlimited company

Setting up an unlimited company is relatively simpler than setting up a limited company. You apply for business registration within one month of starting to operate the business, Business Registration Certificate and that is enough. If you have not yet started operating, business registration will not be granted, so there is no need to apply early. The application methods and process are as follows.

Step 1: Choose how to submit

There are three ways to submit a BR application: online, by post or in person. The fastest is to submit in person at the Business Registration Office.

Points to note for each application method:

Online application: the whole process can be completed online, but you need to enter a digital certificate or use iAM Smart+ with account verification to verify your identity and sign digitally. If you do not have a digital certificate and need to apply for one, your business registration application will be delayed.

By post: the business registration application form must be requested by email (taxbro@ird.gov.hk), by post or by fax to 2824 1482. Each form has its own serial number, so applicants cannot download it directly online.

In person: Submitting the application in person at the Business Registration Office is the fastest way, and application forms can also be obtained at the Business Registration Office. To submit in person, go to the Business Registration Office, 2/F, Inland Revenue Centre, 5 Concorde Road, Kai Tak, Kowloon, Hong Kong

Step 2: Prepare the registration documents for the unlimited company

The documents required to set up an unlimited company are as follows:

Business registration application form

A sample of the application form is shown below, but it cannot be used for an actual application:

Form 1(a) - Application for business registration by an individual carrying on business in Hong Kong

Form 1(C) – Application for business registration of a partnership carrying on business in Hong Kong

Copies of identity documents of the owner and partners
Proof of address of the owner and partners
If the owner or partners (all of the shareholders) are not Hong Kong residents, a letter of appointment of a business agent must be submitted Form IRBR177

Step 3: Submit and pay the business registration fee

A Business Registration Certificate is valid for either one year or three years. Except for local companies incorporated through the One-Stop Company Incorporation and Business Registration Service, the commencement date may vary depending on the circumstances of the application. For companies incorporated locally in Hong Kong, the commencement date is generally the date on which the registration application is successful.

Latest business registration fees and levy

The cost of registering an unlimited company includes the business registration fee and the levy, and the fees for the latest year have been increased to:

One-year certificate: registration fee HK$2,350
Three-year certificate: registration fee HK$6,170 (comprising registration fee HK$5,720 and levy HK$450)

Source of the above fees: Inland Revenue Department's schedule of business registration fees and levies, effective from April 2026.

Business registration fee exemption

If an unlimited company meets the following conditions, it may apply for exemption from the business registration fee (not applicable to limited companies):

Service businesses: average monthly turnover not exceeding HK$10,000
Other businesses: average monthly turnover not exceeding HK$30,000

The application must be made one month before the certificate expires, by completing Form IRBR61C and submitting it to the Business Registration Office.

FAQ

Tax filing for unlimited companies

A newly established unlimited company will receive its first tax return from the IRD within 18 months, with a filing deadline of 3 months. After that, for each tax year, the IRD issues tax returns on the first working day of April, and the business must complete and submit the return within 1 month.

There is no restriction on who may prepare the financial statements of an unlimited company. In other words, if you have the relevant knowledge and ability, you can save the cost of hiring an accountant and auditor by preparing the profit and loss account and balance sheet yourself.

Whether you handle tax yourself or hire an accountant, you must keep all documents relating to the business safe, to make later preparation and checking easier. They include:

Receipts received by the business
Records of invoices issued by the business
Monthly statements of the business account
Asset register

Applying for licences for an unlimited company

Some industries, such as education and catering, need to apply for additional licences. Once the Business Registration Certificate has been issued, go straight to the government website to check whether your business needs a licence and how to apply.

Does an unlimited company need to open a bank account?

After setting up a limited company, you must open a corporate bank account. Although an unlimited company is by nature applied for in an individual's name and the business has no separate legal personality, we still recommend opening a business account. It gives a clearer picture of operating expenses financially, and it also avoids unnecessary misunderstandings with the bank over large or frequent transfers of funds.

Can an unlimited company be converted into a limited company?

An unlimited company cannot apply to be converted directly into a limited company. If needed, the correct approach is to form a separate limited company and then have it acquire the unlimited company's business assets. If you expect the business to grow from the start, forming a limited company directly is easier, and avoids the time and cost of restructuring later.

Summary

An unlimited company has simple procedures and low costs, and is a good entry point for small businesses or individuals trying out a business. Once you have settled on the type you can start applying, and the whole process can be completed in as little as one working day.

If you have any questions about setting up an unlimited company, or want to know whether it suits your business, please contact the SetupHK advisory team. We offer a one-stop company formation service to help you get started easily. Click the WhatsApp button at the bottom right to contact us now!