Hong Kong Company Registration
The most common type of business entity registered in Hong Kong is a private limited liability company. Limited liability companies have a separate legal personality, limited liability for its owners, strong public perception and an enduring structure; raising capital and transfer of ownership is easier when compared to other business structures such as sole proprietorship and partnership. Foreign business professionals often refer to this type of entity as an offshore company in Hong Kong.
Basic Requirements and Facts for Hong Kong Companies
Company name – The company name must be approved before you can proceed with the incorporation of a Hong Kong company.
Companies Ordinance – With the amendment, effective 1 March 2018, every company incorporated in Hong Kong, except for those listed in the Hong Kong Stock Exchange (HKSE), will be required to create and maintain a register of all persons who have significant control of the company. All companies must also appoint a Designated Representative (DR) responsible for reporting in relation to the SCR to prescribed local authorities upon demand. For more details, refer to New Hong Kong Companies Ordinance guide.
Directors – A minimum of one individual director and unlimited maximum number of directors allowed. The director must be a natural person who can be of any nationality and need not be resident in Hong Kong. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractices. There is no requirement for the directors to also be shareholders. Nominee corporate directors can also be appointed in addition to the individual director. Directors Board meetings can be held anywhere in the world.
Shareholders – A Hong Kong private limited company can have a minimum of 1 and maximum of 50 shareholders. There is no residency requirement for shareholders. A director and shareholder can be the same or different person. The shareholder must be at least 18 years of age and can belong to any nationality. The shareholder can be a person or a company. 100% local or foreign shareholding is allowed. Appointment of nominee shareholders is permitted. Shareholders meetings can be held anywhere in the world.
Company Secretary – Appointing a company secretary is mandatory. 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. It has to be noted that in case of a sole director/shareholder, the same person cannot act as the company secretary. The company secretary is responsible for maintaining the statutory books and records of the company and must also ensure the company’s compliance with all statutory requirements. A nominee secretary can be appointed.
Share Capital – Although there is no minimum share capital requirement, the general norm for companies incorporated in Hong Kong is to have at least one shareholder with one ordinary share issued on their formation. Share capital can be expressed in any major currency and is not restricted to the Hong Kong Dollar alone. Shares can be freely transferred, subject to a stamp duty fee. Bearer shares are not allowed.
Registered Address – In order to register a Hong Kong company, you must provide a local Hong Kong address as the registered address of the company. The registered address must be a physical address and cannot be a PO Box.
Public Information – Information about company officers viz. directors, shareholders and company secretary is public information as per Hong Kong Company Laws. It is mandatory to file details of the company officers with the Hong Kong Registrar of Companies. If you wish to maintain confidentiality you can appoint a corporate shareholder and nominee individual director by utilizing the services of a professional services firm.
Taxation – Corporate tax, (or profits tax as it is called), is set at 16.5% of assessable profits for companies setup in Hong Kong. Hong Kong follows a territorial basis of taxation i.e. only profits which arise in or derived from Hong Kong are subject to tax in Hong Kong. There is no capital gains tax, withholding tax on dividends, or GST/VAT in Hong Kong. For more details on corporate taxes, refer to Hong Kong Corporate Tax guide.
Ongoing Compliance – It is mandatory for companies to prepare and maintain accounts. Accounts must be audited annually by Certified Public Accountants in Hong Kong. The audited accounts together with tax return must be filed annually with the Inland Revenue Department. Every company is required to file annual returns with the Companies Registry and pay the annual registration fee. The Business Registration Certificate should be renewed, one month before expiry on an annual basis or once every three years, as the case may be. An Annual General Meeting (AGM) should be held annually very calendar year. The AGM should be held within 18 months of the date of incorporation, after which no more than 15 months can elapse between one AGM and the next. A written resolution in lieu of Annual General Meeting is permissible. For more details, refer to Annual Compliance for Hong Kong Companies guide.
Usually, it takes about 5-7 working days to incorporate a company in Hong Kong.
Considerations for Foreigners
Foreigners who wish to register an offshore limited liability company in Hong Kong, must take into consideration the following points:
- Foreigners are free to be the sole directors and shareholders of a Hong Kong company. There are no local resident requirements.
- Although there is no requirement to be physically present at the time of company registration, physical presence may be required for the purpose of opening a bank account, depending on the bank chosen.
- Foreigners who do not plan to relocate to Hong Kong are free to operate their Hong Kong offshore company from overseas.
Documents Required for Company Registration
To setup a Hong Kong limited liability company, normally the following documents will be required:
- A copy of the Articles of Association for the company. A standard document is normally provided by the professional services firm who is assisting with incorporation of the company.
- A duly completed incorporation form that includes the following:
- Company name
- Registered address
- Brief description of business activities
- Particulars of shareholders, directors and company secretary
- Liability of members
- Share capital registered on incorporation
- Number of shares taken up by subscribers
- For non-resident shareholders and directors:
- Copy of passport, overseas residential address proof
- For resident shareholders and directors:
- Copy of Hong Kong identity card
- Copy of residential address proof
- For corporate shareholders and directors:
- Copy of parent company registration documents such as Certificate of Incorporation and Articles of Association
Note: Officially certified translated versions for any non-English documents must be provided.
Hiring a Professional Services Firm
The professional services firm you have engaged for your company formation will normally take care of all the necessary formalities from the beginning to the end. Hiring a competent and service oriented firm is very important as the relationship is a long-term and ongoing one. The firm you hire will:
- Collect the necessary incorporation details and identifications documents from you.
- Reserve the company name of your choice and prepare the necessary incorporation documents (including Articles of Association) that will need to be filed with Company Registrar. You will need to sign these documents.
- File the incorporation documents with the Company Registrar and obtain Certificate of Incorporation.
- Obtain Business Registration Certificate from Inland Revenue Authority.
- Assist the client with opening of bank account.
- Prepare the following for the new company:
- Common seal and stamp
- Share certificate and share register
- Statutory books
- Assist with filing for relocation visa, business licenses, ongoing statutory compliance, and annual filings as appropriate.