Company Registration in Hong Kong
For starting a business in Hong Kong, the first step is to start with the company registration process. There are a few steps that need to be taken care of for company registration in Hong Kong. Hong Kong is one of the most liberal economies for business purpose and company formation. There is a minimal bureaucratic restriction in the nation for foreign investment that allows the business to flourish.
Various Business Opportunities for Company Registration in Hong Kong
Hong Kong is one of the well-known business hubs in the world. So numerous companies are setting up fresh businesses in Hong Kong, and others are moving their branches in Hong Kong. The main reason behind the same is liberal tax policies and tax rates applicable for company registration in Hong Kong. There are many types of business entities available for setting up a business in Hong Kong, but one of the most common business entities in Hong Kong is the formation of a private limited company. Companies should do proper research and must have full knowledge of available options prior to taking any decision because in case of wrong decision restrictions can be raised on the business expansion by the government.
Options available for Company Registration in Hong Kong
There are mainly five types of entities available for company registration in Hong Kong, as mentioned below:
- Private company limited by shares.
- Public company limited by shares.
- A company limited by guarantee without share capital.
- A private unlimited company with share capital.
- A public company - unlimited with a share capital.
In Hong Kong, for small and medium-sized businesses, “Private Company Limited by Shares” is the most common form for setting up a business. This type of business entity is a separate legal entity. It also provides various types of tax benefits and concessions. For Company registration, the basic requirement is the situation of the registered office in Hong Kong.
What are the criteria for company registration in Hong Kong?
For company incorporation in Hong Kong, one must obtain a Certificate of Incorporation from the Companies Registry. Foreign companies have an option to either set up a new company or open a branch office for the purpose of company registration in Hong Kong. There is a requirement for all the businesses whether they are locally incorporated or not, to obtain Business Registration Certificate from the Inland Revenue Department (IRD) within a period of one month of commencement of the business.
Number of Directors-
Minimum 1 (at least one natural person)
Number of Shareholders:
Documents Required for Company Registration in Hong Kong?
Following documents are required for company registration in Hong Kong:
- Proposed names of the Company
- Certified copy of Article of association of the Company;
- Incorporation for of the Company
- Details proposed directors and shareholders.
- Scanned copy of the passport of every shareholder and director;
- Residential address proof of directors and members. (Must be in English or certified translation version)
- A brief description of the business activities
- Liability of members, if any
- Details of share capital registration
- Description of shareholding pattern of the Company
Note: In the case of non-English documents, officially certified translated versions must be provided.
Basic Requirement for Company Registration in Hong Kong:
There is a certain prerequisite for company registration in Hong Kong, as mentioned below:
- Company name
The first requirement for registering a company in Hong Kong is the availability of the name of the company. This company name needs to be approved with company ordinance. The availability of the name of the company can be checked on the official website of the authority. This is in order to avoid any infringement of trademark and to check the basic requirement for name selection in the nation. The company name can be a Chinese or English name or combination of both. Further, the word 'Limited' needs to be incorporated as the last word.
- Shareholders of the company
For company registration in Hong Kong, the private limited company requires to appoint a minimum one and maximum 50 numbers of shareholders. There is no restriction in context to the nationality or residency of the shareholder. The only requirement is that shareholder must have completed 18 years of age if an individual. A corporative body can also be appointed as a shareholder.
- Directors or Members of the company
The minimum number of directors in a private limited company is one, but there is no maximum limit prescribed. Any person who has completed 18 years of age can be appointed as a director of the company. He can be a Hong Kong national or foreigner. A shareholder of a company can also be a director of the company. The director of the company has liability for complying with all legal obligations of the company.
- Appointment of a Company Secretary
It is mandatory to appoint a company secretary for company registration in Hong Kong. An individual company secretary must be a resident of Hong Kong or in case of the corporative body must have a place of business in Hong Kong. Any director or shareholder cannot be appointed as a company secretary. Company Secretary is responsible for the maintenance and updation of statutory records of the company.
- Registered office
For company registration in Hong Kong, the company must have a registered office in Hong Kong. It should be a physical or virtual address for postal service of important government communication or verification purpose.
- Taxation aspect
Liberal taxation rate is one of the main reasons for company registration in Hong Kong. In Hong Kong, for companies profit tax is defined at the rate of 16.5% of assessable profits. The territorial basis of taxation is followed in Hong Kong. It implies profits derived in Hong Kong will only be subject to tax. There is no capital gain tax or GST/VAT.
- Other details and documents as required by the state for company registration in Hong Kong.
Important things that need to be considered by Foreigners before registering a Company in Hong Kong?
Following points must be considered by the foreigners who would like to register an offshore limited liability company in Hong Kong:
- In Hong Kong Company, foreigners are free to be the sole directors and shareholders.
- There is no requirement for a local resident to register a company in Hong Kong.
- At the time of company registration in Hong Kong, there is no requirement of being physically present.
- However, physical presence may be required at the time of the bank account opening.
- Foreigners are allowed to operate their Hong Kong offshore company from overseas who can’t relocate to Hong Kong.
Procedure of Company Registration in Hong Kong:
The process of registering a company in Hong Kong is as mentioned below:
- Step-1: Appointment of an authorized agent in Hong Kong
Although, there is an online procedure available for company registration in Hong Kong. However, only a licensed agent can apply for company formation procedure in Hong Kong. So it is always recommended to appoint a qualified agent to start your Hong Kong company registration. The agent is responsible for collection, documentation and further submission of documents with Hong ong authority. Further, he is responsible for receiving any communication or reports from the respective government body in this regards and do comply with all provisions as prescribed.
- Step-2: Picking company name
Next step in company registration in Hongkong is a selection of company name. That name needs to be unique and need not match with any preexisting company. The name availability can be checked by online mode with different Hongkong government authorities, including Trademark authority. After name approval complete, the agent needs to apply for name approval application before the authority.
- Step-3: Collection and submission of required documents
The agent is responsible for the collection of official records of all directors and shareholders. Further, an agent is responsible for the submitting of said documents with the respective authority.
- Step-4: Filing of application with respective authority
The application for company registration in Hongkong should be filed with respective authority through online mode. The application can be submitted at e-Registry portal or via “CR e-Filing” mobile application. The documents can also be submitted to department in hard form too with prescribed fee.
- Step-5: Opening of a bank account for company registration in Hongkong
It is essential to open a Hongkong based bank account for accepting payments. It is always advisable to take help of an agent to open a bank account in Hongkong for company incorporation.
Which documents should accompany Company Incorporation Application for Company Registration in Hong Kong?
Following documents need to be attached with company incorporation application for company registration in Hongkong:
- Company Incorporation Form
(Form NNC1 for a company limited by shares)
- One copy of the company’s Articles of Association
- A Notice to Business Registration Office (IRBR1)
How to Open Bank Account in Hong Kong?
One needs to open a Corporate Bank Account after the company incorporation in Hong Kong. A bank account offers multiple benefits to the incorporated company in Hong Kong.
For bank account opening, the following documents must be deposited:
- Complete bank account opening application signed by the authorized persons.
- Certified copy of Certificate of Incorporation.
- Certified copy of the Business Registration Certificate.
- Certified copy of the Memorandum of Association.
- Declaration by the manager.
- Copy of the id proof and residential proof, and the proof of business.
- List of specimen signatures.
Benefits for Company Registration in Hong Kong:
Following are the benefits of Company Incorporation in Hong Kong:
- Separate Legal Entity
Private Limited Companies may enter into any contract in its own name.
- Limited Liability
In Private Limited Company, shareholders liability is limited to the amount of their contribution.
- Raise Capital
In Private Limited Company, share capital can be raised either by introducing new shareholders to the Company or by issuing new shares to the existing shareholders of the Company.
- Perpetual Succession
The existence of the Private Limited Company is unaffected by the change in management.