An increasing amount of foreign investors and entrepreneurs decide to register their companies in Hong Kong because the authorities in this city offer favourable conditions to businesses. The conditions include 100% foreign ownership, low taxes, preferential access to Mainland Chinese markets, etc. For businesses the most popular and preferred options are the wholly-owned subsidiary companies.
This article will guide you through the regulations and the process of registering a subsidiary company in Hong Kong.
A company which is subsidiary in Hong Kong is a private limited company incorporated in Hong Kong and the shareholder of such company is another local or foreign corporate entity. It’s regarded as a separate legal entity so a parent company is not liable to contribute more than the amount of share capital it has invested in the subsidiary. It enjoys all tax benefits that is available to the companies incorporated in the region.
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Basic Requirements And Facts About Hong Kong Subsidiary
- Subsidiary Company Name: The choice of the company name is subject to approval by the Companies Registry and it should also satisfy the Company Name Guidelines.
- Shareholding: Full ownership of the foreign company is allowed.
- Directors: The subsidiary of a Hong Kong company must have at least one director which is a person or body corporate; foreigner or local who is above 18 years old and must not be bankrupt or convicted of any malpractices.
- Shareholders: The minimum shareholders of a Hong Kong subsidiary should be one and can be up to 50 while the majority shareholders should be either a person aged above eighteen years, a corporate or a foreigner.
- Company Secretary: It is compulsory that a local company secretary who is either an individual or a body corporate is present in the case of a company that is registered and has its head office in the locality.
- Local Registered Address: The registered office must be a real office and cannot be a PO box. Whether it’s commercial offices or home offices, they are allowed.
- Auditor: An audit of a Hong Kong subsidiary requires an auditor that is a member of the Hong Kong Society of Accountants and possesses a practicing certificate.
- Share Capital: So, there is no minimum or maximum limit for share capital. The standard practice is having an authorized capital of HKD 10,000 represented by 10,000 ordinary shares of HKD 1.00 each and the issued/paid-up capital is usually 1 share of HKD 1.00.
- Taxes: Subsidiaries are taxed by the same tax regime, at the same rate of tax, as other locally incorporated limited companies in Hong Kong.
- Compliance: Apart from that, the audited accounts are to be submitted along with Tax Returns to the Inland Revenue Department on a yearly basis. The Annual Return should be submitted to the Companies Registry. An Annual General Meeting(AGM) has to be held once a year and that of obviously a calendar year.
Required Documents
The foreign companies will need to get the professional services of business entities to register their subsidiary companies in Hong Kong. The following documents are required for the registration of the Hong Kong subsidiary :
- A completely filled incorporation form
- Articles of association for the subsidiary
- Documents for parent company which are Certificate of Incorporation and Articles of Association.
- Documents for company officers:
- For non-residents: Scan of passport and proof of your newest overseas address (if there is any).
- For Hong Kong residents: Copy of identity card, issued by the Hong Kong Government.
Note: The certified translation of any non-English documents is required officially.
Registration Procedure and Timeline
The procedure of incorporation has two steps :
- The company name approval
- Company registration
The corresponding registration fee and the capital fee of HKD1 for every or part of HKD 1,000 of the nominal share capital (this capital fee is subject to a maximum of HKD 30,000 in each case), is payable to the Companies Registry.
The records of successfully processed applications usually take 4-7 working days. The Companies Registry will be assigned to give out the Certificate of Incorporation.
Post Registration Formalities
Apply for Registration Certificate of the Business
It is compulsory for all the companies in Hong Kong to register with the Business Registration Office of the Inland Revenue Department and get a Certificate of Business Registration. The time frame for business registration with the Inland Revenue Department following the incorporation with the Companies Registry, even if the company is not in business at that time, is one month When applying, the Business Registration Certificate is issued on the next working day if one has all the required documents and must be collected in person. Displaying the Business Registration Certificate on the company premises in a visible manner must be done all the time.
Open Bank Account
As soon as your company is registered with the Companies Registry and Inland Revenue Department Unit, you can open up a corporate bank account with one of the major banks in Hong Kong. Bank requirements and procedures for opening different accounts may vary. Whether you will be expected to pay the visit in person or not might be a difference from one bank to another. The company you have chosen as your consultant should be in a position to guide you about the bank policies.
Apply for Business Licences
If the subsidiary`s activity ought to have a license from a relevant regulatory authority, you must take proper measures before the activity commences. For the licensed business, more information can be gained from the Hong Kong Business License Guide.
How FastLane Group Can Help?
Ready to establish your subsidiary company in Hong Kong quickly and efficiently? FastLane Group is here to streamline the subsidiary company incorporation process for you. With our expert guidance and professional services, you can navigate the complexities of registration seamlessly. Contact us now to kickstart your business expansion journey in one of Asia’s most dynamic financial hubs!