Hong Kong is a jurisdiction whose reputation in the business world is very high. There are entrepreneurs who mistakenly think that company registration in Hong Kong is a complicated procedure, and success is next to impossible. Fortunately, it is not true: the rules are strict, but they are quite clear and transparent. Opening a corporate account is a more challenging task sometimes, but it simply requires a bit more effort. The benefits of setting up a company in Hong Kong are numerous, and we will discuss them later on. If you need more information about Hong Kong or other popular business destinations, please visit this site. Take advantage of a live chat where you can talk to an expert free of charge during office hours.
Hong Kong Company: Main Benefits
Hong Kong is a truly remarkable business hub which offers a lot of perks that appeal to offshore companies, small and medium-sized businesses, and even translational corporations with a lot of branches around the world. Let’s take a look at the reasons to opt for this Asian destination:
- Hong Kong ranks high in terms of the ease of doing business.
- The country has an advantageous geographical location.
- If you are going to operate in the Chinese market, company incorporation in Hong Kong is a kind of gold standard to follow.
- It will be much easier for you to set up a corporate account with a Hong Kong if you set up a local company.
- This is a stable country in political, economic, and financial terms.
- The tax legislation in Hong Kong is well-thought-out to be as convenient as possible.
- The local legal system is business-friendly, providing all the necessary protection and stimulation measures.
- You will be able to take advantage of top-notch infrastructure.
- A company in Hong Kong can be registered online, so you will not need to visit the jurisdiction unless you want to personally control every step.
- A company set up in the Asian country can be fully owned by a foreigner.
- You will find a lot of highly skilled workforce here.
- The scope of your business project will not be restricted in any way.
- The terms of company setup in Hong Kong are really short on the condition that you entrust the matter to a specialist (you can try and venture on your own, of course, but you will need some time to study all the nuances. If you engage a specialist, you actually pay for the proven way of company registration).
- Exchange controls are non-existent in Hong Kong.
- You will be able to enjoy multiple tax incentives and benefits.
- There are no limitations for investors in Hong Kong’s economy.
- Opening a corporate account with a Hong Kong bank is not difficult at all if you have a local company, while a company registered in another jurisdiction will find it really hard.
- You can control your corporate bank account online.
If you have any questions, do not hesitate to click on the above link and ask them.
Business Registration in Hong Kong
The most popular legal form in Hong Kong is a limited liability company. As soon as the registration formalities are over, you will obtain two important documents from the Companies Registry of Hong Kong: the Certificate of Business Registration and the Certificate of Incorporation. The whole process lasts for about two weeks. If you also decide to set up a bank account for your company locally, it will take more (6 weeks at the most).
Company Establishment: Main Requirements
- Licensing. This requirement is optional as it applies to certain activities only. Obtaining a license is usually an easy process.
- Annual General Meeting. You need to hold it on an annual basis. However, it can be easily replaced with a written resolution.
- Company Registration Certificate. Make sure to extend it one month before expiration (it can be done annually or once in three years).
- Compliance matters. You will need to fulfill some mandatory requirements for your Hong Kong business to operate properly, including the payment of the annual registration fee, submission of annual reports to the Companies Registry of Hong Kong, filing reports/tax returns to the Inland Revenue Department of Hong Kong, and proper keeping of accounting records, of course.
- Taxation. The corporate tax payable in Hong Kong equals 16.5%. The country has a territorial taxation system. You will not have to pay VAT, profit tax, dividends tax, or capital gains tax.
- Publicly available data. The information on Hong Kong company officials (a secretary, shareholders, and directors) is available to the public.
- Registered address. You will need to have a physical address in Hong Kong (no post-box solutions are available).
- Share capital. The lower or upper threshold is not set by local laws: one shareholder who owns one common share is enough to comply. There are no currency restrictions. Shares can be freely bought and sold. You cannot issue bearer shares.
- Secretary. This is a mandatory position filled by a Hong Kong resident only (an individual or a legal entity). Most entrepreneurs use the services of a professional (nominee) company secretary for this purpose, and this is allowed officially.
- Shareholders. You can have from 1 to 50 shareholders in your company, and these can be individuals or legal entities. The director’s and shareholder’s positions can be combined. You can use professional (nominee) shareholders if you want to. 100% of shares can be owned by non-residents.
- Directors. You will need to appoint at least one director who can be an individual only, while the maximum number of directors is not limited in any way. This position can be filled by a person who is older than 18 years and has no criminal history or bankruptcy status. You can hire a professional (nominee) director.
- Designated Representative. This is a mandatory position, and this official will maintain and supervise your reporting.
- The Significant Controllers Register. The requirement to keep the register took effect on March 1, 2018, and this is a prerequisite for company incorporation. It is not mandatory for companies registered on Hong Kong Stock Exchange, though.
- Company name. It has to be approved before your company is registered in Hong Kong.
Want to carry out your business activities in China or globally? Hong Kong is a solid jurisdiction that we highly recommend. Click on the above link to ask any questions you may have or discover other destinations.
