Home >Company Formation - Hong Kong
Company Formation
Introduction
Hong Kong is based on British Common Law systems. Strong reputation and low tax policy attract foreign business companies. The tax rate is only 16.5% of the profits earned by your company. Moreover, the tax may be exempted if the income is earned outside Hong Kong. Private limited company is the most common type of companies in Hong Kong. Shareholders of that type of company are subject to limited liability.
The Reasons to Set Up a Company
Companies in Hong Kong can be used for a wide range of business purposes, such as trading, market entry, re-invoicing, investment, asset holding etc.
Many foreign business partners use Hong Kong companies to engage in trading activities. It is getting more popular to set up a Hong Kong company as the subsidiary of your company in China. To expand your business and explore a wider market, it is a good idea to set up a Hong Kong company through us. In addition, it can help in conducting market research, strategic planning and promotion.
Hong Kong companies can also be used for re-invoicing purpose. If all business transactions can be proven offshore, the income derived will be tax-free. For example, profit made on trading of goods from one country and reselling to another country will be wholly or partially exempt from tax, but you will have to provide sufficient documents to prove that the goods are shipped directly between two countries without going through Hong Kong, and the negotiation and signing of contracts are conducted outside Hong Kong.
Besides, Hong Kong companies can be used to hold oversea or local real estate, companies, stock etc. This can help owners to avoid estate tax, probate and divorce settlements. The estate can be changed easier and the cost of transferring the shares of the holding company would be cheaper. Moreover, Hong Kong companies can be used to open investment accounts for securities, bonds, options etc.
Advantages
- Hong Kong is renowned as an international city with free trade and free market, no barriers for trading and no discrimination against foreign investors.
- No restriction on capital flows into and out of Hong Kong.
- Business-friendly tax system, simple and low tax rate. The profit made in Hong Kong is subject to 16.5% tax only.
- Tax on a territorial basis. No taxes are levied on income earned outside Hong Kong.
- No double taxation of income due to the territorial basis of taxation. Double Taxation Agreements (DTAs) are concluded between Hong Kong and many countries such as Belgium, Luxembourg, Mainland China, Thailand, Czech Republic etc.
- Hong Kong is an international financial and commercial centre. There are more than 135 licensed banks with over 100 foreign banks in Hong Kong. Most of the banks welcome applications of account opening for Hong Kong companies.
- Hong Kong companies can be used for a wide range of business purposes such as trading, consultation, investment, asset holding.
- Each limited company is a separated legal entity, and the company’s shareholder is subject to limited liability.
Requirements
- A company name: a new company name (must end with the word “Limited”) or choose from our shelf companies list.
- At least one director who is a natural person of any nationality who have attained the age of 18 years. Additional director can be a body corporate or natural person.
- Number of shareholders: 1 to 50. The shareholder can be individual or corporation of any nationality.
- Director and shareholder can be the same person.
- The company secretary must be a Hong Kong resident or a company registered in Hong Kong. ( We will provide this.)
- Information of the director, the shareholder and the company secretary must be lodged to the Companies Registrar, which is available for public inspection.
- The company must provide a registered office address in Hong Kong for incorporation. (We will provide this.)
- The statutory record of the company must be maintained at the registered office address or at other places in Hong Kong given that a proper notice is submitted to the Registrar of Companies.
Required Documents from You for Incorporation
- Passport copy of each Director and Shareholder certified by either notary public or certified public accountant.
- Valid residential address proof of each Director and Shareholder certified by either notary public or certified public accountant. Valid residential address proof should be telephone bill, electricity bill or bank statement issued within the latest 3 months showing name and address in English.
- Completed Information Form with details of proposed company name, shareholders, and directors.
Procedures of Company Formation with Us
Bank Account Opening
Hong Kong is the financial centre of East Asia with no control on foreign exchange or transfer of funds. Its currency is freely convertible in international markets. It has one of the highest concentrations of banking institutions in the world. Most of the worldwide largest banks have presence in Hong Kong.
Many foreign business partners use offshore companies to engage in trading activities. To expand your business and explore a wider market, it is a good idea to set upan offshore company through us. In addition, it can help to expand research, promote planning and promote trading.
We can assist you with the opening of company account with banks in Hong Kong. Account types include multi-currencies savings account, Hong Kong dollar current account and trade account. Internet banking is available for most banks in Hong Kong.
All banks in Hong Kong now require the beneficial owners, directors & authorized signatories to be witnessed in front of their bank officers in Hong Kong when they submit the application. Different bank has different requirements and procedures to approve account opening application. Time required ranges from around 1 week to 1 month after all necessary documents are provided, depending on the bank and situation.
Generally, documents required include:
- Passport copy
- Residential address proof – such as telephone bill, electricity bill or bank statement issued within the latest 3 months showing name and address in English.
- Business strategy / business plan and business proofs, such as contracts, invoices & bill of lading etc.
- More documents may be required by the bank officer after meeting
Nominee Services
Information of the director, the shareholder and the company secretary must be lodged to the Companies Registrar, which is available for public inspection.
In our incorporation package, the provision of company secretary is included. In addition, we can also provide nominee director and nominee shareholder for your company.
If you use our nominee director service, our nominee will issue a General Power of Attorney to you so that you may act on behalf of the company; if you use our nominee shareholder service, we will issue a Declaration of Trust to show that you are the beneficial owner of the company.
Virtual Office Services
Our virtual office services include
- Provision of our address for the collection of mails for your company with our service to open & scan important incoming mails to you (included in our basic package)
- A local telephone number for your company with incoming calls answering service (additional services if needed)
- A local fax number for your company with our service to scan incoming faxed documents to you (additional services if needed)
Legalization of Company Documents
As your company secretary, the originals of the company documents should be kept in our office. Therefore, we will provide a set of copies of company documents to you that are certified by member of the Hong Kong Institute of Chartered Secretaries. The fee is included in our incorporation package.
In addition, if you need company documents to be certified by the Notary Public, Certified Public Accountant, the Chinese Attesting Officer or various consulates in Hong Kong, or apostilled by the Hong Kong High Court, we can arrange it for you.
