Why Engage a Professional Services Provider for Setting Up a Hong Kong Company?
More often than not, young entrepreneurs and small business owners are “cash strapped” when they start out. Given the tight circumstances, they switch to a ‘’penny pinching’’ mode and try to micro-manage all aspects of their business. Though it may appear an effective cost- cutting measure, this could actually be detrimental to the business growth and may hurt its’ revenue and profitability. In worst-case scenarios, it may even land the business owners in serious legal trouble. Therefore, when it comes to incorporation and the compliance matters of running a business, it would be prudent to engage a professional services firm.
Potential challengesSetting up and running a start-up business is certain to bring many challenges. The early stage of setting up will be more challenging than the subsequent course of running a business. For instance, you will need expert guidance on the type of entity that is most ideal for the nature of your business. Choosing the wrong entity type for your business may drive up your compliance costs, unduly escalate your personal liabilities, or even be inadequate to meet the vision and goals of your business. In addition, there are other legal formalities that should be appropriately addressed and adhered to during the incorporation phase.
Likewise there is no requirement on the minimum amount of a company’s paid-up capital for registering a company, but professional guidance may help you avoid potential setbacks in the instance that you need to apply for a business license.
If you are a foreigner setting up a business in Hong Kong, then you may not be familiar with all the legalities. The steps to incorporate a company in Hong Kong are actually quite simple and transparent, unlike other countries where the legalities may appear complex. However, any oversights you make will delay the process or land you in trouble. There are certain formalities, such as filing the “Consent to Act as Director” form (form NNC3), that have to be fulfilled immediately after incorporating the company, as well as some ongoing compliance requirements to be met. Failing to fulfil these obligations is an offence under Companies Ordinance and are liable to a fine. Therefore it is advisable to engage a professional corporate service provider such as Hawksford who provide a seamless and comprehensive service. Engaging a professional firm will add a service fee to the filing and registration fees, however, considering the challenges involved, it is well worth the spend.
4 Merits of engaging a professional service provider
1. Comprehensive one-stop serviceIt is mandatory to provide a registered office address and have a company secretary at the time of filing for company registration. A company secretary must be a natural person ordinarily resident in Hong Kong, or a corporate body registered in Hong Kong. The company secretary has to ensure that the company is in compliance with the regulatory requirements under the Company Ordinance and maintain statutory books and records. As a foreigner, sole director or for whatever reasons, if you are not in a position to do so yourself, a professional service firm could provide a company secretary and registered office address for you for a fee.
If you are a foreigner setting up a business in Hong Kong and would like to relocate, then a service provider who is able to process your immigration formalities along with the company incorporation process is an ideal choice. All your documentation will be handled in one place and there will be a single point of interaction, ensuring seamless information flow. Not only the founders and directors of new companies need such immigration assistance, but also larger companies engage such professional service providers to manage their employee relocation matters.
Besides incorporation, some companies also provide services that address the businesses operational issues. Service providers such as Hawksford also provide payroll services that handle the following: monthly salary computation, payment, statutory deductions, mandatory provident fund payments, reimbursements, payments on terminations and filing of tax returns. This will remove a bulk of workload from the limited resources of a start-up or a growing company.
Most of the time, in order to save costs, entrepreneurs will do their own information research and might engage a few different service providers for different compliance functions. More time might be wasted in order to coordinate and review the accuracy of these information. As a one stop solution provider, Hawksford prides ourselves in providing speedy, accurate and coordinated information to all our clients.
2. Time saverA professional service provider will provide you with the company kit comprising of the company seal, share certificates and statutory book,soon after successfully obtaining the incorporation certificate. By engaging a professional service provider such as Hawksford, you will also be introduced to a network of allied professionals and service providers such as banks, investors and lawyers. Opening a bank account, scouting for office space, setting up a website, registering a trademark, registering a property, will all be made easier with access to such a network. A well-established service provider can help you find potential investors and partners as well. This will save a lot of time for you in a foreign territory and it will be easier to get your business off the ground quickly.
3. Ongoing compliance mattersThere are many ongoing compliance formalities to be adhered to such as: maintenance of company records, updating changes in registered information, filing of financial statements and tax returns for example. Engaging a comprehensive service provider will lift a considerable amount of responsibility from your shoulders in this area, helping you to focus on core revenue-generating business activities.
4. Governance and reputation
Anti-money laundering and the prevention of terrorism financing is gaining significant importance among regulators and trade agencies. Companies are increasingly under pressure to maintain a clean image and upkeep corporate governance practices. As your business grows and expands beyond borders, its’ association with a service provider that is reputed for customer diligence will help it score well among creditors, investors and bankers. Engaging a professional firm like Hawksford that has an international presence, will not only reap you benefits in the form of the service network but also a solid image of credibility at home and abroad.