Company Limited by Guarantee in Hong Kong

Company Limited by Guarantee · Formation from $321

Last verified: June 13, 2026

Corporate Tax

16.5%

State Tax

0.0%

Formation Cost

$321

Annual Fee

$315

Comparison Scores

Privacy, remote setup, banking, and tax efficiency

Privacy4/10

Remote Setup8/10

Banking6/10

Tax Efficiency9/10

Overall Score7/10

Calculate full formation cost

Break down one-time filing fees and recurring costs for any supported entity type.

Who Should Choose This?

Profiles that typically benefit from this entity

Founders establishing a non-profit organization (NPO) or non-governmental organization (NGO).
Charities seeking official tax-exempt status under Section 88 in Hong Kong.
Professional associations, trade unions, and industry bodies.
Social clubs, religious organizations, and educational institutions.

Who Should Avoid This?

Scenarios where another structure may be better

Entrepreneurs looking to build a profitable, commercial business.
Startups planning to raise venture capital or issue equity to investors.
Founders who want to distribute dividends or retain personal profits from the business.

Advantages

+Ideal structure for non-profits, charities, clubs, and professional associations.
+Members have limited liability, capped at their guaranteed amount (usually HKD 100).
+Eligible to apply for full tax exemption under Section 88 of the Inland Revenue Ordinance.
+Enhances public trust and credibility, making it easier to secure funding and grants.
+Separate legal entity status allows the company to own property, enter contracts, and sue or be sued.
+No share capital requirement, simplifying the initial financial setup.

Disadvantages

-Profits cannot be distributed to members as dividends; all income must be reinvested into the organization's objectives.
-Requires at least two individual directors, unlike private companies limited by shares which only need one.
-Obtaining Section 88 charitable tax exemption is a separate, lengthy process taking 4 to 6 months or more.
-Stricter compliance and reporting requirements, including mandatory audited financial statements.
-Unsuitable for commercial, profit-driven business ventures.

Formation Steps

Choose a unique company name and verify its availability with the Hong Kong Companies Registry.

Draft the Articles of Association, clearly stating the non-profit objectives and the guaranteed amount by members.

Appoint at least two individual directors, one company secretary, and secure a registered office address in Hong Kong.

Submit the incorporation form (NNC1G) and Articles of Association to the Companies Registry, paying the HKD 155 fee (for up to 25 members).

Apply for the Business Registration Certificate (BRC) from the Inland Revenue Department and pay the HKD 2,350 fee (2026 rate).

Receive the Certificate of Incorporation and Business Registration Certificate, officially establishing the entity.

Open a corporate bank account, which may require detailed business plans and proof of non-profit activities.

Apply for charitable status under Section 88 of the Inland Revenue Ordinance for tax exemption (Optional).

Cost Breakdown

Detailed breakdown of formation and ongoing costs

Item	Type	Amount
Companies Registry Fee (Up to 25 members)	One-time	$20
Business Registration Certificate (1-year)	Annual	$301
Registered Office & Company Secretary	Annual	$600
Annual Return Fee (NAR1)	Annual	$13
First year total		$921
Annual ongoing		$914

Real-World Examples

Typical use cases for this entity type

Amnesty International (Hong Kong): Operates as a Company Limited by Guarantee to manage its human rights advocacy and fundraising activities locally.
Hong Kong Management Association (HKMA): A professional body established as a CLG to advance management excellence without distributing profits to its members.
Local International Schools: Many international schools and educational foundations in Hong Kong are structured as CLGs to reinvest all tuition fees back into educational facilities.

Common Mistakes

Pitfalls to avoid during setup and operations

Assuming the company is automatically tax-exempt upon incorporation without applying for Section 88 status.
Appointing only one director, failing to meet the statutory requirement of at least two individual directors.
Drafting generic Articles of Association that do not meet the strict requirements of the Inland Revenue Department for charitable status.
Attempting to distribute profits or pay excessive remuneration to directors, which violates the non-profit nature of the entity.
Neglecting the mandatory annual audit requirement, assuming non-profits are exempt from financial audits.

Other entity types

Other formation options in Hong Kong

Private Company Limited by Shares

Primary

Tax: 16.5%
Formation: $499

Public Company Limited by Shares

Tax: 16.5%
Formation: $499

Branch Office

Tax: 16.5%
Formation: $500

Representative Office

Tax: 16.5%
Formation: $300

Sole Proprietorship

Tax: 15.0%
Formation: $301

General Partnership

Tax: 15.0%
Formation: $300

Limited Partnership

Tax: 15.0%
Formation: $345

Limited Partnership Fund

Tax: 16.5%
Formation: $389

Compare with Other Countries

Country / Type	Tax	Formation	Annual
🇭🇰 Company Limited by Guarantee(Company Limited by Guarantee)	16.5%	$321	$315

🇭🇰 vs 🇺🇸 United States 🇭🇰 vs 🇪🇪 Estonia 🇭🇰 vs 🇬🇧 United Kingdom 🇭🇰 vs 🇮🇪 Ireland All comparisons →

FAQ

What is the minimum guaranteed amount for a member?

There is no statutory minimum, but it is typically set at a nominal amount like HKD 100.

Can a foreigner be a director of a Hong Kong CLG?

Yes, there are no nationality or residency restrictions for directors, but the company secretary must be a Hong Kong resident or a local company.

How long does it take to incorporate a CLG?

The incorporation process typically takes 4 to 6 weeks, which is longer than a standard private company limited by shares.

Is a CLG automatically exempt from taxes?

No. To be tax-exempt, the CLG must successfully apply for charitable status under Section 88 of the Inland Revenue Ordinance.

Can a CLG distribute profits to its members?

No, a CLG is strictly for non-profit purposes. All income must be reinvested into the organization's objectives.

How many directors are required?

A Company Limited by Guarantee must have at least two individual directors (natural persons). Corporate directors are not allowed.

What are the annual compliance requirements?

The company must file an Annual Return (NAR1), renew its Business Registration Certificate, and submit audited financial statements to the Inland Revenue Department.

What is the government fee for incorporating a CLG in 2026?

For electronic filing with up to 25 members, the Companies Registry fee is HKD 155, plus the Business Registration Certificate fee of HKD 2,350.

Detailed Tax Rates

Corporate Income Tax

From	To	Rate
$0	$2,000,000	8.3%
$2,000,000	No limit	16.5%

Hong Kong operates a territorial tax system. A Company Limited by Guarantee is subject to standard profits tax unless it obtains approved charitable status under Section 88 of the Inland Revenue Ordinance, which grants full tax exemption. For the 2025/26 assessment year, a 100% tax reduction applies, capped at HKD 3,000.

Personal Income Tax (Top rate: 17.0%)

From	To	Rate
$0	$50,000	2.0%
$50,000	$100,000	6.0%
$100,000	$150,000	10.0%
$150,000	$200,000	14.0%
$200,000	No limit	17.0%

Salaries tax is calculated at progressive rates up to 17%, but the total tax payable is capped at the standard rate (15% on the first HKD 5 million of net income and 16% on the remainder).

Capital Gains Tax

0.0%

Hong Kong does not levy a capital gains tax. However, gains from the disposal of assets may be subject to profits tax if the Inland Revenue Department deems the transaction to be a trading or speculative activity.

VAT / GST

0.0%

Hong Kong does not impose Value Added Tax (VAT), Goods and Services Tax (GST), or any equivalent sales tax on physical goods or digital services.

Withholding Tax

Dividends0.0%

Royalties5.0%

Interest0.0%

Hong Kong does not levy withholding tax on dividends or interest. Royalties paid to non-residents are generally subject to a 4.95% withholding tax (or 2.475% if the two-tiered profits tax rate applies), which may be reduced under Double Taxation Agreements.

Payroll & Social Security

Employer5.0%

Employee5.0%

Both employers and employees must contribute 5% of the employee's relevant income to the Mandatory Provident Fund (MPF). As of 2026, mandatory contributions are capped at HKD 1,500 per month for each party, though proposals to increase this cap to HKD 2,000 are under review.

Other Taxes

Stamp Duty

Stamp duty is charged on the transfer of Hong Kong stock (0.1% payable by both buyer and seller) and on the transfer or lease of immovable property situated in Hong Kong.

Property Tax

Property tax is levied at a standard rate of 15% on the net assessable value of real estate situated in Hong Kong.

Banking & Payments

HSBC Hong Kong

A leading traditional bank in Hong Kong. Requires extensive documentation and often an in-person interview, but offers comprehensive services for non-profits and charities.

Bank of China (Hong Kong)

A major traditional bank that explicitly supports accounts for Companies Limited by Guarantee, though strict KYC and local presence requirements apply.

Airwallex

Remote-friendly

A popular Hong Kong-based fintech offering multi-currency accounts and corporate cards. Easier remote opening process compared to traditional banks.

Statrys

Remote-friendly

A fintech platform specifically designed for SMEs and entrepreneurs in Hong Kong and Singapore, offering multi-currency business accounts with remote onboarding.

Wise Business

Remote-friendly

Excellent for international transfers and holding multiple currencies. Supports Hong Kong incorporated entities with a fully digital application process.

Payment Gateways

Stripe, PayPal, Adyen, Checkout.com, Payoneer, 2Checkout

Currency

HKD

Multi-Currency: Supported

Account Opening

Opening a bank account for a Hong Kong Company Limited by Guarantee (CLG) is notoriously difficult and time-consuming, especially for non-resident founders. Banks enforce strict Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations, requiring detailed proof of the non-profit's objectives, source of funds, and a strong local operational footprint. While fintechs offer a slightly easier remote process, traditional banks often require an in-person interview and extensive documentation.

Practical Information

Timezone

UTC+8

Business Language

English and Chinese (Cantonese/Mandarin)

Legal System

Common law

Ease of Doing Business

IP Protection

Hong Kong has a robust, independent intellectual property regime based on common law, separate from mainland China. It is fully compliant with the WTO's TRIPS agreement, offering strong protection for trademarks, patents, and copyrights.

Double Tax Treaties

57 countries

Notable treaties: Mainland China, United Kingdom, Japan, Singapore, France, Canada

Visa & Residency Options

Employment (Investment as Entrepreneur) Visa

Designed for foreign entrepreneurs who wish to establish or join a business in Hong Kong. Applicants must prove their business will make a substantial contribution to the local economy.

New Capital Investment Entrant Scheme (New CIES)

Allows eligible foreign nationals to reside in Hong Kong by investing a minimum of HKD 30 million in permissible investment assets, such as equities, debt securities, and funds.

Top Talent Pass Scheme (TTPS)

Aimed at attracting high-income earners and graduates from the world's top universities to explore opportunities in Hong Kong without requiring a prior job offer.