Hong Kong Company Formation FAQs

If you’re considering forming a new company in Hong Kong, you’re bound to have questions. At Hawksford we’ll give you the answers and support your business growth.

Forming a company in Hong Kong

  • What are the minimum statutory requirements for forming a company in Hong Kong?

    This page is a continuation of the previous article titled Hong Kong Company Registration Guide which provided a detailed overview of company formation requirements, formation procedure, and post-formation formalities for Hong Kong companies. In the current article, we provide  answers to most frequently asked questions on Hong Kong company formation.

    What are the minimum statutory requirements for forming a company in Hong Kong?

    In Hong Kong most companies are incorporated as private limited companies (limited by shares). The following are the basic requirements for forming a company in Hong Kong:

    • Any individual or business entity may incorporate a Hong Kong company
    • Minimum one shareholder who can be a local or foreigner. A shareholder must be above 18 years of age.
    • Minimum one director who can be a local or a foreigner. A director must be above 18 years of age.
    • The shareholder and the director can be the same person.
    • There is no minimum share capital requirement. However, the general norm for is to have a authorized share capital of HKD 10,000 represented by 10,000 ordinary shares of HKD 1.00 each. The minimum issued/paid-up capital is usually 1 share of HKD 1.00.
    • Must have a local registered address (P.O.Box not allowed)
    • Must have a company secretary. The secretary, if an individual, must ordinarily reside in Hong Kong; or if a body corporate, must have its registered office or a place of business in Hong Kong. Sole shareholder and director cannot also act as company secretary.
    • A name approval is required prior to company registration. Names must not be:
      • same as or similar to a name appearing in the Companies Registry's 'Index of Company Names'
      • infringe on trademarks
      • be offensive or otherwise contrary to public interest
      • a combination of English words/letters and Chinese characters  
  • What language can a company name be registered in?

    A company may be registered with an English name, a Chinese name, or an English and a Chinese name. A company name with a combination of English words/letters and Chinese characters is not allowed. An English company name must end with the word "Limited" and a Chinese company name must end with the Chinese characters equivalent of the word"limited".

    Are bearer shares allowed in Hong Kong?

    No. Hong Kong company formation law does not permit bearer shares.

    Do we need to be present in Hong Kong during company formation process?

    No, you don't need to be physically present at the time of company incorporation. However, depending on the bank you choose, you may have to meet with the bankers personally in Hong Kong at the time of account opening. 

  • What documents do I need to send in order to incorporate a Hong Kong company?

    Assuming you are a foreign national, the service provider you hire to incorporate your company will normally require the following documents from you:

    • Copy of your passport
    • Copy of your residential address proof such as utility bill, cable bill, etc.
    • Completed incorporation details form listing information about the proposed company such as proposed company name, shareholders, directors, etc.
  • Is a Hong Kong company required to obtain any business license after incorporation?

    Incorporation of companies is governed by the Companies Registry of Hong Kong. However, the nature of the actual business activity could be subjected to control and regulation by other Government authorities and you may require a business licence or permit before you can actually begin business activities. Examples of some of the businesses that require a licence to operate include: travel agencies, restaurants, employment agencies, fund managers, insurance brokers, lawyers, liquor distributors, moneylenders, banks and childcare centres etc. You can apply for a business licence only after you have incorporated your Hong Kong company. For more information, see Business licenses in Hong Kong.

  • What are the different types of business entities in Hong Kong?

    For private enterprises, the various common types of business entities are:

    • Private limited company. This is the most preffered type of legal entity.
    • Branch office
    • Subsidiary company (it's a private limited company with corporate shareholder)
    • Representative office
    • Partnership
    • Sole proprietorship (not recommended due to unlimited legal liabilities on owners)

    For more details, refer to Hong Kong Business Entity Types.

  • How long does the Hong Kong company formation procedure take?

    In most cases, it takes about 5-7 working days to incorporate a company in Hong Kong. However, if you are located overseas, it may take longer owing to the logistics of signing and couriering the relevant company formation documents. 

    What language can a company name be registered in?

    A company may be registered with an English name, a Chinese name, or an English and a Chinese name. A company name with a combination of English words/letters and Chinese characters is not allowed. An English company name must end with the word "Limited" and a Chinese company name must end with the Chinese characters equivalent of the word"limited".

    Are bearer shares allowed in Hong Kong?

    No. Hong Kong company formation law does not permit bearer shares.

  • Do directors need to be present in Hong Kong during company formation process?

    No, you don't need to be physically present at the time of company incorporation. However, depending on the bank you choose, you may have to meet with the bankers personally in Hong Kong at the time of account opening.

  • Do we need to engage a professional firm to incorporate a Hong Kong company?

    If you are residing in Hong Kong, it is not mandatory to appoint a professional services firm to incorporate your Hong Kong company and you can choose to self-incorporate the company. However, given the complexities of incorporation procedures and ongoing statutory compliances, it is highly advisable to use the services of a professional services firm.

    If you are a non-resident and wish to incorporate a company in Hong Kong, you are required to engage a professional firm to act on your behalf.

  • Do companies need a Hong Kong partner to incorporate a company?

    No, Hong Kong companies do not require a local shareholder or a director. However, you will likely need the services of a corporate services provider for the company's ongoing statutory compliance purposes. Your corproate service provider will normally act as your company secretary and registered address agent. They will also handle the annual filing matters for your company as well as can provide nominee director and nominee shareholder services if required.

  • Is a local registered office required for a Hong Kong company? Can I use my home as the place of business of my company?

    Every Hong Kong incorporated company must have a registered office in Hong Kong from the date of its incorporation. This is the company's legal address for notices and proceedings and can be different from its business address.

    Yes. It is possible to use your Hong Kong based home address to conduct small scale businesses.

Shareholders and shareholdings in a Hong Kong company

Getting people in a new Hong Kong company

  • Can a Hong Kong company hire foreign employees?

    Yes, a Hong Kong company can hire foreign employees to work in Hong Kong. The company must file an employment visa for each such employee and it must be approved by authorities. There are different schemes under the employment visa category that cater to different groups of employees:

    • Those with a degree or higher qualification in a full-time and locally accredited programme in Hong Kong (referred to as non-local graduates)
    • Those with foreign education but possess special skills, knowledge or experience of value to and not readily available in Hong Kong
    • Chinese residents who possess special skills, knowledge or experience of value to and not readily available in Hong Kong.

    Note that the company must be incorporated first before an employment visa application can be filed. For further information, refer to Hong Kong Employment Visa Schemes.

  • Can I relocate to Hong Kong to operate my company?

    Foreign entrepreneurs who wish to relocate to Hong Kong in order to operate their company are required to apply for a so called Investment Visa. Applying for the Investment Visa is very similar to applying for the Employment Visa under the General Employability Policy, except that this visa is meant speciafically for company owners. Note that you can apply for Investment Visa only after company formation. For further details, refer to Hong Kong Investment Visa guide.

    What is the permitted currency of share capital for a Hong Kong company?

    Any major currency. Usually, the Hong Kong Dollar is the preferred currency of choice for convenience.

Filing of Hong Kong company accounts

  • Are Hong Kong companies required to file annual accounts?

    As per Hong Kong company formation laws, every company formed in Hong Kong, unless specifically exempted, must file its audited accounts with the Inland Revenue Department of Hong Kong along with its profits tax return on an annual basis. The auditor must be a member of the Hong Kong Society of Accountants and must hold a practicing certificate. There is no requirement to file accounts with the Companies Registry.

  • Are there any compliance exemptions that apply to dormant companies?

    Yes. A private limited company as deemed dormant under the Companies Ordinance in Hong Kong is exempt from filing annual returns with the Companies Registry, holding AGMs, appointing auditors and preparing audited accounts. However, it must file a profits tax return with the Inland Revenue Department.

  • What are the annual filing requirements for companies incorporated in Hong Kong?

    Annual filing requirements include:

    • Annual Return filing for Hong Kong company Registry
    • Annual Tax Return filing with Inland Revenue Authority of Hong Kong

    For more details, refer to Annual Filing Requirements for Hong Kong Companies.

  • Which companies are exempt from filing audited accounts with the Hong Kong Inland Revenue Department (IRD)?

    The following companies are exempt from submitting audited accounts together with their profits tax return:

    • Small corporations (defined as those corporations whose total gross income does not exceed HKD 500,000 for the basis period)
    • Dormant companies as per the Companies Ordinance definition (defined as having "no relevant accounting transactions" during a financial year)
    • Companies incorporated in a jurisdiction whose laws do not require accounts to be audited
    • Hong Kong branch of a foreign company, provided that the following information is supplied together with the return
    • the place of incorporation of the foreign company
    • whether the laws of that country require a statutory audit of the world-wide accounts of the company
    • whether that audit has been conducted and
    • a brief summary of the financial and accounting records maintained by the Hong Kong branch
  • What happens if the company has no relevant accounting transaction - is is a "dormant company"?

    A dormant limited company in Hong Kong is one that, in legal terms, has "no relevant accounting transactions" during a financial year. A "relevant accounting transaction" is defined by the Companies Ordinance as a transaction that is entered into the company’s books of account, such as the receipt and expenditure of money and the sale and purchase of goods, assets and liabilities etc. This does not include any transaction which arises from the payment of any fee which the company is required to pay by any Ordinance.

    Under the Companies Ordinance, a company may pass a special resolution authorizing its directors to make a statutory declaration that the company will become dormant and to deliver a copy of the statutory declaration to the Registrar. The company shall be deemed a dormant company effective the date of delivery. If the declaration specifies a later date for the company to become dormant, the company shall be deemed dormant as from that later date specified.

Hong Kong company financials and fees

  • How long does it take to open a corporate bank account in Hong Kong?

    Once the company has been registered with Company Registrar, you can proceed to opening the bank account. The time taken to open the bank account varies from bank to bank.

  • Is there a stamp duty for allotment or transfer of shares for a Hong Kong company?

    Stamp Duty on share capital is also known as capital duty on share capital in many other countries. Stamp Duty on share capital in Hong Kong is as follows: 

    • No Stamp Duty is payable on the allotment of shares.
    • Stamp Duty is payable on the transfer of shares as below.

    Stamp Duty is payable on: 

    • Transfer by way of sale or purchase of any Hong Kong stock
    • Transfer by way of gift of Hong Kong stock
    • Transfer of any other kind

    The rate of Stamp Duty and time limit for stamping is as follows:

    • For Contract Note for sale or purchase of any Hong Kong stock - 0.1% of the consideration or Net Asset Value, whichever is higher, on every sold note and every bought note.Stamp duty must be paid within 2 days after the sale or purchase, if effected in Hong Kong; within 30 days after the sale or purchase, if effected elsewhere.
    • For transfers by way of gift - HKD 5 + 0.2% of the value of the stock - Stamp duty must be paid within 7 days after the execution of the instrument of transfer, if executed in Hong Kong; within 30 days after the execution, if executed elsewhere.
    • For transfers of any other kind - HKD 5 - Stamp Duty must be paid before the date of execution, if executed in Hong Kong; within 30 days after the date of execution, if executed outside Hong Kong.

    Note: There are certain exemptions, to certain transfers in connection with a stock borrowing and lending arrangement.

  • Is a Hong Kong company required to have an annual turnover?

    No. There is no such requirement.

  • What are the applicable government incorporation fees?

    There are two fee payments to be made:

    • Incorporation Fee to the Companies Registry
    • Business Registration Fee to the Inland Revenue Department (tax authority in Hong Kong)

     

    The prevailing registration fee is payable to the Companies Registry for incorporating a private limited company having share capital. Additionally fees for obtaining a Business Registration Certificate from the Inland Revenue Authority are as follows: HKD2,250* for a 1 year Certificate and HKD5,950* for a 3-year Certificate.

    *fees care subject to change

Changing or closing a Hong Kong company

  • Can the name be changed after incorporation of the company?

    Yes. It is possible to change the company name anytime after its incorporation, by passing a special resolution. A "Notification of Change of Company Name" must be filed with the Companies Registry within 15 days after the passing of the Special Resolution. Once the new name is approved, a Certificate of Change of Name will be issued.

  • How difficult is it to close a Hong Kong company?

    Companies can be closed either by "Liquidation/Winding Up" or "De-Registration". Generally, de-registering a company is relatively simple, inexpensive and a quicker procedure when compared to winding-up or liquidation. However, there are certain conditions that the company has to satisfy if it wants to be de-registered. The process usually takes up to 5-7 months, depending on the complexities involved. Winding up a company is a lengthy, expensive and time consuming procedure. For more details, refer to Hong Kong Company Windup.

Ready to Incorporate?

If you are interested in setting up a Hong Kong company, Hawksford can help. Request a quote now to take the next step in your business.

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Forming a company in Hong Kong can be made easy

Hawksford provides professional company formation services ranging from the incorporation of Hong Kong companies, subsidiaries of foreign corporations, to the registration of branches of overseas companies.

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