Hong Kong Company Registration in 2023-24
Hong Kong, which is geographically situated in the centre of Asia is an excellent location for business incorporation.
Being able to incorporate a company in Hong Kong with just one shareholder and one director makes doing business there simple. According to the most recent data from the World Bank, the country is
ranked third in the world for the ease of doing business index. Hong Kong is recognized as one of the most tax-friendly cities as it imposes no VAT, GST, Capital gains, or withholding taxes. Additionally, Hong Kong is a leading worldwide financial hub and as such, the nation’s financial system is highly developed and facilitates global trade, which is one of the primary reasons why business owners choose to establish their companies there.
You can read this article to learn more about the procedure for company registration in Hong Kong. Also, the benefits, costs, and requirements for Hong Kong company registration will also be explained.
Process of Company Registration in Hong Kong
The steps for Hong Kong company registration are as follows:
Choose a company name
The first step of registering a company in Hong Kong is to select a name for the organization. The Companies Registrar must give their approval after the name has been chosen.
Decide the business structure
The second step for Hong Kong company registration is to decide the type of company you wish to incorporate.
Collect the incorporation documents
To incorporate a business in Hong Kong, the entrepreneur must gather the necessary incorporation documents, such as the article of association, stockholder information, etc.
Apply for business registration
The business owner must fill out the business incorporation form and submit it to the Companies Registry with the other required documentation. A certificate of incorporation will be provided to the business owner after the documents and paperwork have been examined and approved.
Open a business bank account
It is necessary to open a bank account in the newly established firm’s name after finishing the corporate enrollment process.
Acquire the business licenses
Acquiring the necessary corporate permissions and licenses for the firm based on the sort of commercial operations the firm engages in is the final step for Hong Kong company registration.
Documents Required for Company Registration in Hong Kong
For Hong Kong company registration, the following documents must be provided:
- Articles of Association
- Company registration form
- Details of the stockholders and directors
- Details of the business account
- Shareholder’s passport copies
- Your firm’s official name
Eligibility Criteria for Hong Kong Company Registration
The following are the main prerequisites for forming a company in Hong Kong:
- Shareholders: For a Private Limited Company to be registered in Hong Kong, a minimum of one shareholder and a maximum of fifty shareholders are needed.
- Director: At least one director is required to register a company in Hong Kong. The director may be an organization or a natural person who must be at least 18 years old. The director could be a citizen or resident of any country.
- Business secretary: When a business registers, it should employ a minimum of one secretary. In Hong Kong, the position of business secretary cannot be held by a director or a single shareholder.
- Business address: A business address is essential for company registration in Hong Kong which cannot be a P.O. Box address..
- Auditor: Inland Revenue Department should receive the firm’s audited yearly financial statements.
- Share capital: For the objective of registering a corporation in Hong Kong, the legislation does not specify a minimum share capital. The standard procedure is to register a company with a minimum approved share capital of 10,000 Hong Kong dollars and a paid-up share capital of 1 Hong Kong dollar per share.
Types of companies for Hong Kong company registration
Several business entities can be established in Hong Kong.
Let’s dive into their details, and understand each one of them:
1. Company limited by guarantee
One of the business structures for Hong Kong company registration is a Company limited by guarantee and it is perfect for NGOs. That is because the firm’s articles of association limit the allocation of surplus to its associates. The interesting fact to learn about a company limited by guarantee is that the members’ liability is only restricted to their contribution amount, and there is no concept of share capital. The firm directors have to stand up to their responsibilities and legal duties.
2. Private limited company
This business structure is known as the most known corporate entity established in Hong Kong. A firm is said to be private when there are few restrictions present in its articles of association.
- Only 50 members are allowed to be incorporated
- The members can’t transfer their firm’s shares
- One cannot invite anyone to subscribe to shares of the firm
The Private limited company will have to hire a firm secretary and board of directors. But there isn’t any limitation on the director’s nationality or residence.
3. Public limited company
According to a simple concept, if a firm is not private, then it is a public firm. This means that there will be no limitations on them in their articles of association. It can either be a listed firm or a non-listed firm. As its important characteristic, this business structure is more prone to limitations put by the Companies Ordinance and disclosure needs than any private firm. A private company will only get listed if it is first transformed into a public company.
4. Limited partnership
This type of business entity comprises both, the limited as well as the general partners. You do not need to hire any local manager until all your general partners live in a city other than Hong Kong. The limited partner only has to take the liability of the amount he has submitted in the establishment of the firm, whereas the general partner takes up the unrestricted liability of the company’s debts.
Note: The general partners are included in the decisions making of the company, and also have a strong upper hand over the firm. The limited partners on the other hand do not have a strong say in the matters of the business and do not hold the power to make official decisions.
5. General partnership
This type of business structure is best for partners who seek the same corporate target and wish to grow together in the business field. This entity comprises 2 or more partners and is comparatively easy to form.
In a general partnership, every individual partner will be responsible for the firm’s debts and will also be liable for the business decisions taken by his/her co-partner. You do not need to follow any statutory requirements or compliances for a general partnership, that’s why it is easy to develop this entity in Hong Kong.
6. Sole proprietorship
Sole Proprietroship is a firm that is operated by a single individual. Sole proprietorship is the simplest and the easiest form of business, yet it is also quite risky to form such a business in Hong Kong.
This is because it does not offer to protect the personal properties of owners, and neither does it offer responsibility restrictions to the entrepreneur.
7. Branch Office
A branch office is an extension of the overseas firm, where the overseas firm is responsible for the obligations of the branch. For establishing a branch, the foreign corporation has to first obtain the Business Registration Certificate (BRC) from the Companies Registry. The tax and legal obligations that apply to any other Hong Kong-established firm also apply to the branch offices of overseas corporations. Performing a separate audit at a branch office is not necessary.
8. Representative Offices
A representative office is not a distinct legal organization; rather, the overseas parent corporation is responsible for all obligations of the representative office in Hong Kong. A representative office is not allowed to engage in commercial endeavors that are profitable. It is only permitted to carry out specific tasks like coordinating, marketing, doing research, etc.
Tax System in Hong Kong
Hong Kong offers the biggest global, straightforward, and affordable tax payment services. There are no value-added taxes, sales taxes, estate taxes, withholding taxes, dividend taxes, interest taxes, capital gains taxes, or inheritance taxes, making SAR (Special Administrative Region), a perfect retail hub and economic foundation for businesses and employees.
Types of Taxes under IRO
IRO is the Inland Revenue Ordinance, and 3 main taxes fall under it. Hong Kong continues to adhere to three primary categories of tax:
- Profit tax: Taxes on internal profits range from 8.25 to 16.5%. Outside profits are not subject to tax.
- Income tax: Salary taxes range from 2% to 17% of taxable earnings.
- Property tax: The overall assessable worth of the properties is subject to a 15% property tax.
Cost of Company Registration in Hong Kong
Any company that registers in Hong Kong is required to pay business incorporation fees.
Here are the fees that must be paid to register a company in hong kong:
- The cost of incorporating a firm might be between HKD1,545 and HKD1,720.
- The business registration fee is approximately HKD250. There is a $300 fine for renewing the company registrations beyond the deadline.
- The approximate fee for changing a corporation’s name is 295 Hong Kong dollars.
- The cost of registering fees and associated documentation might be around HK$610.
Why register a company in Hong Kong?
- The World Bank has Hong Kong in third place for its ease of doing business ranking.
- Hong Kong has a highly qualified, competent, and trained labour force.
- Hong Kong is among the cities with the lowest rates of taxation.
- Hong Kong is a significant international financial hub.
- Hong Kong’s sophisticated airport, metro, highways, and maritime links are available to businesses that establish there.
- Companies in Hong Kong can be easily registered and managed.
- One of the most modern and integrated transportation networks in the world is found in Hong Kong.
- If a Hong Kong corporation doesn’t conduct any business in the country, it is legally exempt from paying taxes there.
Advantages of Company Registration in Hong Kong
The following is a list of advantages of registering a business in Hong Kong:
Hong Kong is renowned for being a simple location to establish a business. Hong Kong has the advantage of allowing foreign business entrepreneurs to hold full ownership of the companies that register there. It is renowned for the top-notch infrastructural amenities that make it easier to conduct trade and commerce in Hong Kong.
Hong Kong has a population with a high level of education, training, and skill. The workforce mostly consists of local talented employees of seasoned business owners and experts who are familiar with the developing working culture.
Simple access to China
Hong Kong is situated at the centre of Asia as the entry point to China’s expanding economy. Hong Kong’s advantageous proximity to China makes it essential for gaining access to the Chinese marketplace.
Attractive tax structure
One of the countries that has the lowest tax rates around the world is Hong Kong. A business-friendly taxation and legal framework exist in Hong Kong as a result of the city’s strong corporate environment. Hong Kong has about 45 double taxation treaties with several nations of the world.
Book end-to-end experts consultation with Odint company formation experts
Hong Kong is one of the most ideal places for establishing companies. The country’s appealing infrastructure supports trade between the nation and the rest of the world. Additionally, the country offers corporations simple access to China’s markets. With a highly qualified workforce and English as the national business language, doing business in the nation is made simpler.
We at ODINT Consulting take it as our moral duty to treat and assist our clients as our own. Our skilled professionals know exactly what you need for successful company registration in Hong Kong. So, contact us for unlimited support and guidance from our experienced team.
- A Hong Kong corporation must have a minimum of one shareholder and one director in order to be registered.
- A corporate secretary is required for Hong Kong company registration.
- For the establishment of a corporation in Hong Kong, a registered business address is necessary.
- Hong Kong has the advantage of allowing foreign business entrepreneurs to hold full ownership of the companies that register there.
- Hong Kong has about 45 double taxation treaties with several nations of the world.
- Hong Kong’s advantageous proximity to China makes it essential for gaining access to the Chinese marketplace.
- Hong Kong is a leading international financial hub.
- Hong Kong’s sophisticated airport, metro, highways, and maritime links are available to businesses that establish there.
By completing the business incorporation form and submitting it to the Hong Kong Companies Registry with the necessary documentation, corporations in Hong Kong can be registered.
The cost of incorporating a firm might be between HKD1,545 and HKD1,720.
The business registration fee is approximately HKD250. There is a $300 fine for renewing the company registrations beyond the deadline.
Yes, Hong Kong permits corporations to be owned entirely by foreigners.
The corporate tax rate for resident companies is 16.5%.