Hong Kong Company Formation – FAQ
Keep on reading in order to get a better understanding of the requirements of company formation in Hong Kong.
If you are looking to incorporate a Hong Kong company, register a Hong Kong branch of an overseas company, or Hong Kong subsidiary of a foreign corporation, then you’re bound to have many questions.
Hong Kong Company Formation
A Private limited liability company is one of the most common forms of a business entity registered in Hong Kong because of the advantages associated with it.
To be precise, limited liability companies have a separate legal classification, strong public perception, an enduring structure, and transfer of ownership are more manageable compared to other business structures, such as sole proprietorship and partnership.
What are the minimum statutory requirements for company formation in Hong Kong?
The very first thing that all aspiring and successful entrepreneurs are required to know is the minimum statutory requirements for company formation in Hong Kong. Registration of a business is a straightforward process. To set up a Hong Kong limited liability company, the following requirements will be required:
- You need to have minimum one director who must be above 18 years of age irrespective of the residency of the directors.
- The business entity must have a local registered address (P.O Box not allowed).
- A Hong Kong company can have a minimum of 1 and maximum of 50 shareholders. The director and shareholder can be the same person.
- The business entity must have a company secretary. The secretary can be an individual, or a body corporate. If the secretary is an individual, then they must ordinarily reside in Hong Kong; or if a body corporate, then it must have a place of business in Hong Kong or its registered office. Sole director and shareholder cannot also act as company secretary.
- Any business entity or individual may incorporate a Hong Kong company.
- There is no minimum share capital requirement. However, the general norm is to have an authorized share capital of HKD 1,000.
What language can a business name be registered in?
Before you can proceed with the registration and incorporation of a company in Hong Kong, the company name must be approved with the Companies Registry (CR). The name of the company can be registered with a Chinese or English name. But the combination of English words/letters and Chinese characters is not allowed.
A Chinese business entity name must end with the equivalent of the Chinese character of the word “limited,” and an English company name must end with the word “Limited.” Moreover, the company name cannot be offensive or contrary to the public interest, and can’t infringe on trademarks and patents.
Do you need to be physically present during the company formation process in Hong Kong?
There is no need to be physically present in Hong Kong during the company formation. Although, depending upon the requirements of your bank you choose while registering your business entity, you may have to personally attend a meeting to open a bank account in Hong Kong.
What are the Documents Required for Hong Kong Company Formation?
In order to launch a limited liability company in Hong Kong, usually the following documents are required from all the entrepreneurs.
A duly completed incorporation form that includes:
- The registered address of the company
- A business description of all the activities
- Number of shares taken up by subscribers
- Approved Company Name
- Shareholders, directors and company secretary
- Liability, and share capital of the members registered on incorporation
- For resident directors and shareholders- Copy of residential address proof and Hong Kong identity card.
- A copy of parent registration documents such as Articles of Association and Certificate of Incorporation is required for corporate directors and shareholders.
- For non-resident shareholders and directors- a copy of a passport, and overseas residential address proof is required.
What are the Various forms of Business Ventures in Hong Kong for company formation?
The first and most pertinent step in setting up a company is to decide on an appropriate business structure in Hong Kong. There are different types of business entities in Hong Kong. It is essential to consider all the pros and cons of each business vehicle against your business goals, in order to choose the right structure.
Below are the business structures that you need to know before launching a company.
- Subsidiary company (it’s a private limited company with corporate shareholder)
- A sole proprietorship
- Representative office
- Private limited liability company
- Branch office
Are you required to hire a professional firm for Hong Kong company formation?
According to the Companies Ordinance of Hong Kong, any person(local or foreigner) above the age of 18 can set up a business venture in Hong Kong. If you are residing in Hong Kong, there is not obligation to engage a professional services firm. You can select any form of business entity to incorporate in the financial hub of Hong Kong.
However, there are some complexities for the procedure of ongoing statutory compliances and incorporation of your business, so it is highly advisable to use the services of a professional services firm. On the other hand, if you are non-resident of Hong Kong and willing to register your business in Hong Kong, then it is mandatory for you to engage a professional firm to act on your behalf.
To be precise, whether you are a local or foreign entrepreneur, you are strongly advised to hire the services of a professional firm who must be well experienced with the local legislation governing companies and in handling ongoing regulatory and compliance requirements.
Do you need to obtain any business license after the company formation in Hong Kong?
Once you understand the importance of hiring a professional firm for incorporation of your business entity, the next thing to know is the significance of obtaining a license for conducting business in Hong Kong. The Hong Kong’s Companies Registry governs the incorporation and registration of companies.
The government authorities of Hong Kong are subjected to control and regulate the nature of the actual business activity. Before you can begin business activities, you may require a business license or permit depending upon the nature of your business venture.
For example, some of the businesses that are required to obtain a permit to operate include restaurants, fund managers, travel agencies, insurance brokers, lawyers, employment agencies, liquor distributors, banks, childcare centers, and moneylenders.
Is the information regarding shareholders and directors of the business entity available publicly?
The answer to this question is yes. The company is required to have the information public about company officers, shareholders, company secretary, and directors as per Hong Kong company incorporation laws.
When you are incorporating your business entity in Hong Kong, it is pertinent to file the details of the company officers with the Companies Registry in order to avoid any legal problems. If you are willing to maintain confidentiality for your business, you can hire a nominee director and a nominee shareholder from your corporate service provider.
What are the Considerations for Foreigners for Company Formation in Hong Kong?
If you are a non-resident of Hong Kong and wish to set up a business venture in Hong Kong, then you must take into consideration the following points before conducting business.
- There is no requirement to be physically present at the time of company registration.
- Foreigners who do not plan to relocate to Hong Kong are free to operate their Hong Kong offshore company from overseas.
- There are no local resident requirements for foreigners to be the shareholders and sole directors of a Hong Kong company.
What are the annual filing requirements for Hong Kong Company Formation?
The next requirement for the registration and incorporation of your business entity is to file the annual filing with the Companies Registry. Whether you are forming the subsidiaries of a foreign company or setting up the private limited company, you are required to apply for yearly filing.
The annual returns are submitted to the Companies Registry. Under the Companies Registry, a private limited liability company is required to file an Annual Return signed by a manager, company secretary, director or authorized representative. On the other hand, for Hong Kong company formation, entrepreneurs need to submit a Tax Return which is also known as Profits Tax Return in Hong Kong along with its audited accounts on an annual basis with the Inland Revenue Department of Hong Kong.
Can you change the name of Hong Kong company after incorporation?
Some may wonder whether you can change the name of your company after registering with the Company Registry and Inland Revenue Department. It is possible to change the name of your business entity after its incorporation, by passing a special resolution.
All you need is to file a “Notification of Change of Company Name” within 15 days after the passing of the Special Resolution with the Companies Registry. Once the new name is approved, a Certificate of Change of Name will be issued to you.
By now, you must have a better idea about the requirements of company formation in Hong Kong, and how you can complete your registration process. If you are looking for an excellent business environment with no restrictions of business scope, world-class infrastructure, and a well-found internet banking system, look no further.
Being strategically located in south-eastern China and in the heart of Asia, Hong Kong is an excellent place to incorporate the business entity. The city has a simple tax system with no withholding tax, no VAT, and no capital gain tax. Are you ready to launch a business venture in Hong Kong?
If so, select the type of business entity that you want to incorporate, and hire the professionals like Startupr to complete all the procedures and set a dream business in the financial hub of Hong Kong.