
<p>Starting a business is easy, but sustaining it is tough. This age-old saying remains relevant today. Whether you&#8217;re a startup or an SME that has been operating for a while, when it comes to expanding or upgrading the business, financial challenges are inevitable. What channels are available in the market to provide financial support for SMEs in Hong Kong? What should one be aware of when applying for a SME Loan in Hong Kong?</p>



<h2 class="wp-block-heading"><strong>Bank SME Loans</strong></h2>



<p>Many banks and lending companies offer SME Loans in Hong Kong services. These are primarily secured and unsecured loans, with loan amounts reaching up to tens of millions. The annual interest rate usually ranges from 7% to 20%. Borrowers should consider if the loan interest and period meet their needs.</p>



<p>However, SME loan amounts can be substantial. Applicants might need to provide numerous documents, such as company registration proof, invoices, inventory records, and bank statements from the past six months. The approval process is intricate, typically taking 1 to 2 months. For urgent financial needs, traditional bank SME loans might not be the quickest solution.</p>



<p>Virtual banks like ZA Bank and PAOB offer business loans. Their application processes are simpler than traditional banks, and approval times are faster. For instance, PAOB&#8217;s loan service offers amounts from HK$100,000 to HK$2,000,000 with loan periods of up to 24 months. PAOB claims that from application to loan disbursement, it only takes five days, allowing quicker access to funds.</p>



<h2 class="wp-block-heading"><strong>Personal Loans</strong></h2>



<p>To apply for government-guaranteed loans or subsidy programs, certain qualifications are required. These loans and subsidies also come with usage restrictions, making them less flexible for corporate financial management. If you&#8217;re looking to infuse extra funds into your company, consider approaching banks and financial institutions for <a href="https://www.planto.hk/en/blog/category/loans/">personal loans</a>. Since they&#8217;re taken out in an individual&#8217;s name, the bank will assess the loan amount based on your income and credit history. The approved loan is often 10 to 20 times your monthly salary. The review process can be as quick as one day, but the amount might not be sufficient for company needs.</p>



<h2 class="wp-block-heading"><strong>Government Business Loans/Subsidy Programs in Hong Kong</strong></h2>



<h3 class="wp-block-heading"><strong>Technology Voucher Program (TVP)</strong></h3>



<p>Launched in November 2016, the TVP aims to support local businesses in utilizing technology services and solutions to enhance productivity or streamline business operations. Eligible companies can get up to HK$600,000 in subsidies.</p>



<p>To qualify, one must be:</p>



<ul>
<li>Registered under the Business Registration Ordinance or Companies Ordinance or a legal entity established in Hong Kong.</li>



<li>Not a listed company in Hong Kong nor a government-funded organization or its subsidiary.</li>



<li>Operating a business in Hong Kong relevant to the applied project.</li>
</ul>



<p>SMEs in Hong Kong can apply for the technology voucher if they meet the above criteria. The subsidy covers technology consultancy services, equipment and software purchases, and technology service solutions and audits.</p>



<h3 class="wp-block-heading"><strong>SME Export Marketing Fund</strong></h3>



<p>This fund encourages SMEs to participate in export promotion activities, helping them expand overseas markets. Eligible businesses can receive up to HK$1,000,000 in fund support.</p>



<h3 class="wp-block-heading"><strong>SME Financing Guarantee Scheme</strong></h3>



<p>Promoted by the Hong Kong Monetary Authority and implemented by the Hong Kong Mortgage Corporation Insurance Limited, this lending scheme assists cash-strapped SMEs. The insurance company provides credit guarantees of 50%, 60%, 70%, 80%, or 90%, enabling businesses to benefit from lower loan interests and higher loan amounts.</p>



<h2 class="wp-block-heading">Find the Best Loans in Hong Kong</h2>



<loan-table> language=&#8221;en&#8221; </loan-table>


SME Loans Hong Kong: Comprehensive guide on loan channels for businesses. Explore bank, private, and government loan options for your SME's financial needs.

SME Loans Hong Kong: How Can Companies Borrow Money?


<p>Starting a company is the first step in entrepreneurship. While registering a company in Hong Kong has been simplified significantly, first-time entrepreneurs might still find the procedures daunting. Even if you outsource the registration process to accounting and secretarial firms, founders must be familiar with the process and crucial details to ensure a smooth start to their business journey.</p>



<h2 class="wp-block-heading"><strong>Limited Company vs. Unlimited Company: What&#8217;s the Difference?</strong></h2>



<p>When considering starting a small or medium-sized enterprise, the two most commonly known types of companies are limited and unlimited companies. They differ in terms of their legal status, debt, and tax liabilities. The main differences include:</p>



<h3 class="wp-block-heading"><strong>Limited Company in Hong Kong</strong></h3>



<ul>
<li>A limited company is a legal entity with its own legal status. Shareholders can enter into contracts or borrow money in the company&#8217;s name. Limited companies must appoint a registered accountant annually for auditing and submit an annual return for tax assessments.</li>



<li>As limited companies are separate from their shareholders, in most cases, shareholders aren&#8217;t personally liable for the company&#8217;s debts unless they&#8217;ve signed specific collateral agreements.</li>



<li>Limited companies can further be classified into:
<ul>
<li><strong>Company Limited by Shares:</strong> Most companies in Hong Kong are registered under this type. The legal responsibility of company members is determined by their articles of association and is limited to the unpaid amount on the shares they hold.</li>



<li><strong>Company Limited by Guarantee:</strong> This type doesn&#8217;t have share capital. The legal liability of its members is limited to the amount they have pledged to contribute to the company&#8217;s assets upon liquidation. Typically, non-profit organizations (NGOs) register as companies limited by guarantee.</li>
</ul>
</li>
</ul>



<h2 class="wp-block-heading"><strong>Unlimited Company in Hong Kong</strong></h2>



<ul>
<li>Unlimited companies operate under individual or partnership names. In simple terms, once a business registration is obtained, it&#8217;s equivalent to owning an unlimited company. Since they don&#8217;t have separate legal status, shareholders have unlimited liability. If the company incurs debts, shareholders might have to use their assets to settle them.</li>



<li>There are advantages to operating an unlimited company. For instance, there&#8217;s no need to submit audited financial reports annually. Instead, you only need to keep accounts and offer tax returns on time, saving at least HK$10,000 in auditing expenses annually.</li>



<li>Tax rates for unlimited companies are also generally lower. Currently, the profits tax rate for the first HK$2 million for limited companies is 8.25%, and 16.5% for profits beyond that. For unlimited companies, the tax rates are 7.5% and 15%, respectively.</li>
</ul>



<h2 class="wp-block-heading"><strong>Procedure to Establish a Limited Company</strong></h2>



<h3 class="wp-block-heading"><strong>Step 1: Decide on a Company Name</strong></h3>



<ul>
<li>You can use English or Traditional Chinese for the company&#8217;s registered name. Simplified Chinese or mixed language (Chinese-English) names aren&#8217;t accepted. Ensure that your chosen name doesn&#8217;t clash with existing entities. You can check for name availability through the Companies Registry&#8217;s online search center, mobile service, or in person at the public search center located at Queensway Government Offices.</li>
</ul>



<h3 class="wp-block-heading"><strong>Step 2: Submit the Application and Pay the Fees</strong></h3>



<ul>
<li>Submit your application electronically (through the &#8220;e-Registry&#8221; website or the &#8220;CR eFiling&#8221; mobile app) or in physical form to the Companies Registry. Required documents and fees include:
<ul>
<li>Incorporation Form (NNC1 or NNC1G form)</li>



<li>Articles of Association</li>



<li>Notification to the Business Registration Office (IRBR1 form)</li>



<li>Business Registration Fee: HK$2,150 for one year; HK$5,650 for three years</li>



<li>Company Registration Fee: Currently HK$1,720</li>
</ul>
</li>
</ul>



<h3 class="wp-block-heading"><strong>Step 3: Receive Company Registration Certificate</strong></h3>



<ul>
<li>You will receive the Company Registration Certificate and Business Registration Certificate upon successful application. Depending on your submission method, they can be issued electronically or in a physical format, both having the same legal validity.</li>



<li>Electronic Certificate: Notification will be sent via email, allowing the applicant to download the certificate.</li>



<li>Physical Certificate: Notification is sent via fax. When collecting the certificate, you must present the &#8220;Certificate Collection Notice&#8221; and the ID proof/company stamp mentioned in the notice.</li>
</ul>



<p>After successfully establishing a limited company, you can use your business registration and company registration certificates to open a company bank account to manage daily operations. Additionally, if hiring employees, ensure you purchase worker&#8217;s insurance and set up Mandatory Provident Fund (MPF) accounts for them.</p>



<h2 class="wp-block-heading">Find the Best Loans in Hong Kong</h2>



<loan-table> language=&#8221;en&#8221; </loan-table>


Hong Kong Business Registration 2023 Guide: Dive into the differences between limited and unlimited Companies. Navigate the startup process efficiently with this detailed overview.

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SME founders work hard every day for their businesses while also managing the company’s finances. We share insights on company financing, taxation, accounting, and employee management to ease your entrepreneurial journey.

SME

SME founders work hard every day for their businesses while also managing the company’s finances. We share insights on company financing, taxation, accounting, and employee management to ease your entrepreneurial journey.

SME Loans Hong Kong: How Can Companies Borrow Money?

HK Business Registration 2023: Limited vs. Unlimited Company Guide

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