Following reports that three men were unaccounted for, two were subsequently pulled from the sea "unconscious", a police spokeswoman told AFP as a search and rescue operation continued.
"There was a wooden boat that sank. There were eight people on the boat," a government spokesman told AFP, citing information from the fire department.
The vessel, described by authorities only as "a work boat", sank in the waters of the Tsing Yi district at around 2:15 pm local time, the spokesman said, adding that the fire department had sent boats to search for the missing.
Maritime safety fears were exposed in Hong Kong when a collision between a passenger ferry and a pleasure boat carrying around 120 people to watch National Day fireworks claimed 39 lives in October last year. The accident was the city's worst boating disaster in decades.
An inquiry into the crash found a "litany of errors" and "systematic failings" in the marine department's safety standards.
Fatal boat accidents are rare in Hong Kong despite its crowded waters, which often see high-speed hydrofoils vying for space with tourist junks, luxury yachts and a century-old public ferry system.