Limited Company Formation Requirements
Here you would find out all about the requirements of a Hong Kong Limited Company.
Establishing a company within Asia is the easiest in Hong Kong, where the requirements of a Hong Kong Limited Company are comparatively less strict than other Asian countries. The reasons for this is due to the long British history and influence in Hong Kong; making it a business-friendly nation that has an open, internationally-minded environment. Also, due to the predominant use of the English language, Hong Kong has a much higher advantage for business over the other Asian countries.
The private limited company is the most traditional kind of business that is registered in Hong Kong. These types of organizations have an enduring structure, strong public perception, limited liability for its owners, and a discrete legal personality. Also for a limited company, the transfer of ownership and the raising capital is more convenient when compared to a sole proprietorship and partnership.
Here you would find out all about the requirements of a Hong Kong Limited Company, and it is strongly advised to take the help of a professional firm like Startupr. We are well versed with the local legislation governing for companies and also have years of experience to handle the ongoing compliance and regulatory obligations.
The other requirements for a Hong Kong limited company are mentioned below.
Director
Fulfilling the requirements for setting up a Hong Kong Limited Company are not too difficult, in terms of the company directors. A single person can be kept as the director of the company, where the company must have at least one director. There is no limit for the number of directors, but each director must be appointed and may need to sign official documents for the company. The director does not have to be a resident of Hong Kong, but has to be a natural person above the age of 18.
This person should not have any past records of being convicted for any malpractices or bankruptcy. Furthermore, there is no hard rule where a director has to be a shareholder of the company, and a selected company corporate director can also be a director along with the chief director. However, the company cannot appoint only one corporate director on incorporation, as there must be at least one natural person appointed.
The directors would be responsible for the company, and are able to make the important business decisions and sign documents under the company name. They would also be ultimately responsible for the company filings and other government matters. The board meetings for the directors can be held in any part of the world.
Shareholder
Another one of the requirements of Hong Kong Limited Company is that it needs to have at least one shareholder, with a maximum of 50 shareholders. Anything above 50 shareholders would be categorized as a public company, which would have a different set of rules and company regulations.
A shareholder is someone who owns a piece of the company’s stock and receives the benefits of the success of the business. They are the owners of the company, can receive the earnings of the company in the forms of dividends, and vote on important company matters such as the direction of the company and the number of company directors. The shareholder does not need to be a resident of Hong Kong, but has to be at least 18 years old. They can also be the director of the company if they choose to be.
An important aspect about this is that the shareholder can be a company or even just a person, where a 100% ownership of the shares is permitted to be of foreign or local shareholding. Therefore, a company can be owned entirely by another Hong Kong person or company, or by an international company or person from anywhere in the world. Also, a nominee can be designated as a shareholder for the Hong Kong company. The meetings of the shareholders can be held in any part of the world, but in general should be conducted annually.
Company secretary
Other than the shareholder and the director, each private limited company in Hong Kong is required to have a company secretary as well. This is not a secretary who does the clerical work in a company or answers the calls for the company. As per the rules of the Hong Kong incorporation, the company needs to hire a corporate secretary who would ensure the regulatory and legal compliance as well as represent the company in any legal documents. The secretary can be an incorporated company in Hong Kong or an individual who is a resident of Hong Kong.
Also, a person who is the director or the shareholder of the company cannot be the company secretary. Director’s of a Hong Kong company are responsible for maintaining the records and statutory books of the business. Along with this, the person would also ensure the compliance of the company with all the regulatory requirements, and sign any necessary documents for the company.
Startupr is a local Hong Kong company secretary, and along with the incorporation and company registration services, you can also hire Startupr to also act as your corporate secretary if you choose so. Startupr would handle all the company filings to the government, and ensure the entire process is smooth and documents properly filed on time.
Share capital
There is no minimum requirements for the share capital of a new Hong Kong Limited Company. A company in Hong Kong needs to have at least one shareholder and an ordinary share issued during the formation of the business. The share capital of the company does not need to be in the Hong Kong Dollar, and can be in any of the world’s major currencies, such as in USD or EURO.
The Hong Kong company regulation does not require that 1 share must be worth 1 HKD. It is the total share capital available and registered for the company. The founding members are not required to submit the initial share capital amount to the government nor into the company bank account. They may choose to deposit this amount into the company bank account later on, but are not required to by law when incorporating the company. However, this is still owed by the shareholders to the company, so be aware of this for companies with issuing a high value of share capital.
Shares can also be smoothly transferred, subjected to a government stamp duty fee. Further share capital for the company can also be added to new shareholders of the company, in the form of a share allotment. However, bearer shares are not allowed as per the Government Requirements of a Hong Kong Limited Company.
Limited liability
A limited liability company is one where the shareholders are lawfully liable for the debts of business, only to the extent of the total value of their shares. This means a person who holds a shares of a company is not personally liable for the total debts of the company in the case of a possible lawsuit or bankruptcy over the total value of the shares. This is the most common type of company in Hong Kong.
The document requirements of a Hong Kong Limited Company that you wish to open are:
- The copy of the company’s Articles of Association. (This is an official document provided by the firm assisting you with the incorporation of the company.)
- A completed incorporation form with the following details:
– Number of shares taken up by shareholders
– Share capital registered on incorporation
– Details of company secretary, directors, and shareholders
– Brief description of business activities
– Registered address
– Company name - For non-resident shareholders and directors: A copy of your passport and overseas residential address proof.
Moreover, any foreigner who wants to set up a company in Hong Kong has to consider the following things:
- A foreigner can easily be a sole shareholder or director of a Hong Kong company with no requirement to be a Hong Kong resident.
- Even though there is no need for the physical presence while registering and forming the company in Hong Kong, there is a physical presence needed for the bank account opening process, depending on the bank of choice.
- Those who do not want to move to Hong Kong can efficiently run their business remotely overseas.
Registered address in Hong Kong
The company would also need to provide a local Hong Kong address as the official registered address of the company to register in Hong Kong. This is a government requirement for all companies incorporated in Hong Kong. This address would be registered to the company, and would receive important government mail. Also, the registered address has to be a physical address in Hong Kong and cannot be a PO box. In case you do not have a registered address for the company, you can choose the that allows you to use Startupr’s registered address for the new Hong Kong company along with many other services.
This registered address differs from a business address for the company. A business address is the location used for a company in terms of invoicing, contracts and agreements, and receiving business mail, such as from business partners or from the bank. Startupr also provides this service for companies to have a business address located in the heart of downtown Hong Kong. Our location in downtown Hong Kong can be used for invoicing, and for receiving and sending mail to anywhere in the world, with signing up for these services.
With the information and details of a Hong Kong company, you are already on your way to starting a limited liability company in Hong Kong. Startupr offers a complete one-stop package for company incorporation and other company services. You can select the desired service as per your choice and needs from the customizable package of services by Startupr.