Hong Kong Restaurant Setup: Licensing, Hiring, Bookkeeping

At a glance

Licence categories, application requirements, departmental requirements and timing are as most recently published by the Food and Environmental Hygiene Department, the Buildings Department, the Fire Services Department and other relevant departments.

Licensing: it shapes everything from the site onwards

This is the bottleneck for the whole thing.

A food business licence application engages requirements from several departments — building structure and permitted use, fire services installations, drainage and ventilation, hygiene facilities. And those requirements directly determine whether your premises can be used at all, and what has to change.

So the right order is:

One: at the site selection stage, confirm the permitted use and structure allow a food business. Some premises are ruled out from the start, and finding that out after signing is money gone.

Two: draw the plans and fit out to the licence requirements. Not fit out first and see what has to change afterwards.

Three: allow enough time. From application to full licence is generally measured in months, depending on the case.

Four: understand the provisional licence arrangement. In some cases you can trade under a provisional licence while the full licence is processed. Confirm the conditions and duration with the relevant department.

Honestly: this part is not something we can help with — licensing needs a professional or an authorised person familiar with food business licences. What we can do is the other two tracks.

Hiring: catering has one special rule

This is where owners most often fall short and get pursued.

Catering has an MPF industry scheme, designed for casual employees who move between workplaces. The difference: a casual employee under an industry scheme contributes even where employed for fewer than 60 days.

Which means “they only worked two days” is not a reason that holds in catering.

The same applies to employees’ compensation insurance: part-timers, casuals and trial shifts all need cover. Injury risk in catering is not low (burns, falls, cuts), which makes this the last item to economise on.

For the full rules see do part-timers and casuals need MPF.

Bookkeeping: cash takings are the core problem

Catering accounts are the most likely to run into trouble, for one reason — large volumes of cash takings with no corresponding external record.

The auditor’s view is simple: you say you took a million; how do you show it?

If you cannot, you get a qualified opinion — and a qualification affects later loan applications, opening a second site, and selling the business.

Three things to do in practice:

One: cash up daily and record it. Till reports and a daily takings record — split between dine-in, takeaway and platform orders.

Two: bank it regularly. Cash takings and bank deposits have to line up. Large cash takings over a long period with little going into the bank creates pressure to explain.

Three: record platform orders separately. Delivery platforms usually deduct commission before paying you. Record the gross figure before commission as income, with the commission as a separate expense. Recording only the net under-reports both income and expenditure — wrong on both sides.

Stock: it has to be counted at the year end

Ingredients, drinks, packaging — count them on the year end date, recording item, quantity and cost.

Once the date passes it cannot be reconstructed. It is one of the things the auditor will always ask for.

Catering stock turns over fast with high wastage, which makes the records more important, not less — not for the audit, but so you know where your costs are going.

How do the three tracks run together?

Roughly:

The row that most often goes wrong is the fourth — opening and then saying “we’ll deal with the books once things settle”. The result is no records for the first few months, and that becomes the source of a qualification at audit.

One very practical suggestion: record from day one

The first few months of a restaurant are the busiest, and the easiest time to put the bookkeeping off.

But those are precisely the months whose records matter most — because they determine whether your first audit report is clean, and that first report stays with you for a long time.

And a daily record is genuinely simple: one sheet, filled in once before closing with the day’s takings and banking. The difficulty is not technical; it is habit.

We do bookkeeping and company secretarial work, which includes setting up the daily record and month-end process, and handling MPF and employer filings. Licensing needs someone who specialises in food business licences.

Talk to us, or get started.

This is general information and does not constitute legal, licensing or accounting advice. Food business licence categories, requirements, procedure and timing are as most recently published by the Food and Environmental Hygiene Department and the relevant departments; MPF and employees’ compensation arrangements follow the MPFA and the Labour Department.