Introduction To Company Incorporation In Hong Kong

Introduction To Company Incorporation In Hong Kong

Do you have plans to incorporate or register a company in Hong Kong? Here, this article will discuss comprehensively registering a private limited liability company in Hong Kong which shall include basic incorporation requirements, procedure and timeline, and post-incorporation procedures.

The Companies Ordinance of Hong Kong is the legal framework in which anyone (a foreigner or a local) who is above the age of 18 can set up a Hong Kong company. The most frequent form of business getting registered under the Companies Registry of Hong Kong is a private limited liability company.

The limited liability company possesses a separate legal personality, limited liability for the owners, strong public impression, and thriving structure that is resilient and adds a high intellectual value raising capital and transfer of ownership which is easier than other structures such as sole proprietorship and partnership. International entrepreneurs and professionals are fond of using this type of business in Hong Kong as an offshore entity.

Hence, what does it take to register a company in Hong Kong? There is no difference between a local or foreign entrepreneur, you are strongly suggested to get professional firms involved in the process because they understand the laws governing companies and have experience in the continuous regulatory and compliance requirements of the Hong Kong company formation.

How To Register A Company In Hong Kong?

Basic Requirements And Facts About Setting Up Hong Kong Companies

  • Company Name – Your company name must be approved before the company incorporation process proceeds for the Hong Kong company establishment. Click here to learn more about company registration in Hong Kong.
  • Companies Ordinance – The amendment, which became effective on 1 March 2018, says that all companies incorporated in Hong Kong, except those that are listed in the Hong Kong Stock Exchange (HKSE) need to create and maintain a register of people who have significant control of the company.
  • Hence all business establishments are supposed to have a Designated Representative responsible for reporting SCR by prescription to the particular local jurisdictions upon request.
  • Director – Appoint a minimum of one director and as many associates as possible. The director has to be a natural person regardless of citizenship and does not have to be a Hong Kong resident. Managers must be at least 18 years old, cannot be bankrupt, or have been convicted and sentenced for any kind of misconduct. There is no rule that the directors are also required to be the shareholders. Besides individual directors, nominee directors can also be appointed. Directors meetings can take place anywhere in the world.
  • Shareholders – In the case of Hong Kong Private Limited Company (Ltd.), there has to be at least one shareholder but no more than 50. For the shareholders, there will be no specific residency clause enforced. A director and a shareholder can be one and the same person or two individuals. The shareholder must be at least 18 years old and citizens of any nationality are eligible. A local or foreign shareholding of 100% is permitted. Shareholder nomination is allowed. Shareholder meetings could be done virtually through the internet means anywhere across the globe.
  • Company Secretary – The process of setting up a company in Hong Kong is easier with an appointed company secretary. The secretary, if an individual, must reside in Hong Kong, or if a body corporate, must have its registered office or a place of business in Hong Kong. It should be emphasized that when there is a single director or shareholder, the same person cannot act as the company’s secretary. The company secretary should be in charge of maintaining the statutory books and records of the company and ensuring the company’s compliance is in accordance with all the legislative requirements. A secretary nominee can be formally appointed.
  • Share Capital – While there is no minimum share capital requirement, the general corporate practice in Hong Kong is to have at least one shareholder with one ordinary share issued at the time of formation. The share capital is labeled as any major currency and will not have any limitations on the type of currency, in addition to the Hongkong Dollar. Shares can be transferred at a fee charged as a stamp duty. Bearer shares are forbidden.
  • Registered Address – For the purpose of registering a Hong Kong company, a specific Hong Kong address should be submitted as the official address of the registered company. A registered office is required by law, and it can’t be a Post Office Box, but a physical address.
  • Public information – The names of the authorities of company officers, directors, shareholders, and company secretary are public information according to the Hong Kong Company Laws.
  • The report of the company direction of the features in the Hong Kong Companies Registry is compulsory to be filed. If you want to keep your confidentiality, the option is to appoint a corporate shareholder and nominate an individual director through a professional services firm.
  • Taxation – The corporate tax (sometimes called profits tax), is 16.5% of assessable profits for companies based in Hong Kong. While Hong Kong adopts the territorial in the scope of taxation which mean only profits that arise or that are derived from Hong Kong are subject to taxation in Hong Kong. There is little to no income tax, and no withholding tax on the dividends, as well as no GST/VAT in Hong Kong. 
  • Ongoing Compliance  – It is required that businesses organize and keep accounts. Auditing by Certified Public Accountants is performed in Hong Kong on an annual basis. The financial statements and tax returns complied with the IRS must be filed annually to the Inland Revenue Department. Every company submits to the Companies Registry the annual return statement and proceeds to pay the annual fee for the registration.
  • The Business Registration Certificate should be renewed, one month before expiry on an annual basis or every three years according to the case.
  • The Annual General Meeting (AGM) should be held each year. In this AGM, executive positions will be introduced and function briefly. A general meeting (AGM) should be held within 18 months of the date of incorporation with other AGMs not to space more than 15 months apart. An alternative to holding an Annual General Meeting is a written resolution which is acceptable.

Hong Kong Company Formation: What Foreigners Need To Consider?

The following points are things you should consider if you are a foreigner who wants to create an offshore limited liability company in Hong Kong : 

  • There are no restrictions about foreign directors being the only ones, nor the shareholders can be solely from their country. There is no 100% resident local hire policy.
  • Even though you are not necessarily required to be physically present for company registration, you will most likely need to be physically present to open a bank account, based on the bank you choose.
  • Foreigners who don’t intend to reside in Hong Kong have the freedom to run their Hong Kong offshore company out of a foreign base.

How To Start A Business In Hong Kong: Which Documents Do I Need For Incorporating A Company?

The following list of the documents are typically required to start a limited liability company in Hong Kong : 

  • A copy of the Articles of Association of that company. A standard form of the document is usually prepared by the professional services firm that helps in the incorporation of the business company. 
  • A properly filled-out incorporation form with the following information:
    • Name of the company
    • Registered address
    • Brief description of the business operations
    • Information about the directors, company secretary, and shareholders 
    • Liability of members
    • Capital share registered at incorporation 
    • Number of shares that subscribers have taken up
  • For non-resident shareholders and directors:
    • A copy of passport and address proof of the overseas residential.
  • For resident shareholders and directors:
    • Copy of the Hong Kong identity card
    • Copy of residential address proof 
  • For corporate shareholders and directors :
    • Copy of the parent company’s registration documents e.g. Certificate of Incorporation, Articles of Association.

Note: It is important to provide the officially certified translations if the documents are not written in English.

Why Should You Hire A Professional Services Firm For Company Registration In Hong Kong?

Generally speaking, the professional services bureau which you have hired to complete the formation of your Hong Kong company will take care of all the required formalities starting at the beginning till the end. The term of the relational factor is long-term and ongoing; thus, the selection of a competent and service-oriented company is very important.

The service company you hire will be responsible for the following tasks: 

  • Gather detailed information for incorporation and identification documents from you.
  • Reserve the name of your company choice, and draft the incorporation documents (including Articles of Association) for submission to the Company Registrar. Then, you will have to sign those documents. 
  • Fill in the incorporation documents with the Company Registrar to obtain a Certificate of Incorporation.
  • Get the business registration certificate from the Inland Revenue Authority.
  • Help client with the bank account opening process
  • Prepare these documents for the new company :
  • Help to apply for relocation visas, acquire business licenses, statutory compliance, and annual filing as needed.

How FastLane Group Can Help?

At FastLane Group, our team of experts makes Hong Kong company incorporation simple by helping many companies from beginning to end. We take care of all procedural formalities, such as name reservation, document preparation, and submission to respective authorities, and make sure that your company meets all regulatory standards with ease. Contact us now!