Hong Kong Ltd
Formation of a Hong Kong Private Limited Company (PLC)
A Hong Kong private limited company is an ideal vehicle for asset protection and international trade, investment and financial management, and yacht registration.
It is tax exempted if the income does not derive from Hong Kong. Usually, a Hong Kong company is used by holding and investment companies, as well as for regional headquarters.
FACTS & INFO
There is no ’offshore’ legislation in Hong Kong. All companies are incorporated under the same legislation - Hong Kong Company Ordinance - whether they are doing business locally or ’offshore’.
To do business in Hong Kong, one can set up a sole proprietorship, a partnership or register one’s own company incorporated elsewhere as an overseas company in Hong Kong. However, the most common form of business entity in Hong Kong is the private limited company, which limits the liability of the shareholders to the capital subscribed.
Hong Kong private limited companies must use the suffix "Limited" to denote limited liability. The following names require licensing to be used: "Bank", "Insurance", "Assurance", "Re-Insurance", "Trust", "Trustee", "Savings", "Royal", "Asset Management", "Fund Management", "Investment Fund", "Building Society", "Municipal", "Chartered", "Chamber of Commerce", "Tourist Association", "Kaifong", "Mass Transit", or "Underground Railway". Names denoting any connection to local, state or national governments are generally prohibited.
ARTICLES OF ASSOCIATION
A company is incorporated in Hong Kong by an application made to the Companies Registry. Articles of association and statement of the founding member in NNC1 must be logged with the Registry. The articles of association specify the activities in which the company may engage, and the rules governing the internal management of the company. A notice of situation of registered office is also required to be filed in NNC1 at the time of incorporation. A business registration fee has to be paid to the Inland Revenue Department within 30 days after the date of anniversary of incorporation, and then each year thereafter. The government fee is HK$2,250.
A minimum of one shareholder is required, which may be an individual or a corporate body. Details of the shareholders must be filed and appear on the public file, but anonymity can be preserved by the use of nominee shareholders.
Under the Companies Ordinance, Cap. 32, companies incorporated in Hong Kong and possessing share capital are required to have a par value ascribed to their shares. This represents the minimum amount at which a share can be issued.
Companies may also declare in their articles of association the maximum amount of share capital that may be issued by the company (the requirement for 'authorised share capital').
The amount of the excess of the issue price of the share over its par value is designated as 'share premium'. Under Cap. 32, there are restrictions on how a company can deal with share premium and how it must be accounted for.
As a result of migration to mandatory no-par, relevant concepts such as par value, share premium, and requirement for authorised share capital are no longer necessary.
A company will have greater flexibility to alter its share capital in a no-par environment. For example, a company will be able to capitalise its profits without issuing new shares and to allot and issue bonus shares without increasing its share capital (section 170 of the new CO).
DIRECTORS AND COMPANY SECRETARY
A Hong Kong limited company requires a minimum of one director who is a natural person. Details of the directors appear on the public file, but anonymity can be preserved by the use of nominee directors. There is no requirement to have resident directors.
All Hong Kong companies, apart from listed companies, are required to maintain a 'significant controllers register' that will include up-to-date beneficial ownership information.
Hong Kong registered companies must also have a secretary, who can be a corporate body or an individual resident in Hong Kong.
*Please contact us if you are interested in our nominee director services.
REGISTERED OFFICE AND SECRETARY
Every company registered in Hong Kong is required to have a registered office and address there, which should be notified to the Companies Registry.
Company meetings need not be held in Hong Kong. A general meeting can be held at more that one location by using any technology.
An annual general meeting (AGM) must be held once in every calendar year within 9 months after the end of the accounting reference period. However, a company need not hold its first AGM until 18 months after its incorporation. A company can dispense with the holding of an AGM if everything that is required or intended to be done at the meeting is done by resolutions.
Companies may dispense with the holding of AGMs by unanimous shareholder consent.
Incorporation time is usually between 7 to 14 working days.
RECURRING MAINTENANCE FEES
As from the second year, there are recurring maintenance fees of $1,750. These include:
- Provision of registered office/registered address
- Provision of company secretary
- Provision of annual aeturn
- Designated representative
- Business registration certificate
Hong Kong is one of the few countries in the world that taxes on a territorial basis. Many countries levy tax on a different basis and they tax the worldwide profits of a business, including profits derived from an offshore source. Hong Kong profit tax is only charged on profits derived from a trade, profession or business carried on in Hong Kong. Consequently, this means that a company which carries on a business in Hong Kong but derives profits from another jurisdiction is not required to pay tax in Hong Kong on those profits.
If a Hong Kong company has multiple streams of income, both from and out of Hong Kong sources, then these streams will need to be justified with evidence. To successfully claim tax exemption for offshore income:
- The company’s management must be located outside Hong Kong.
- The directors/managers/employees should not come to Hong Kong to negotiate and sign contracts for business dealings with Hong Kong buyers.
- The company should not maintain any operational office and warehouse in Hong Kong.
- The company should not employ any staff in Hong Kong to carry out the company’s job duties there.
Hong Kong sourced income is currently subject to a rate of taxation of 16.5%.
AUDIT AND ACCOUNTING
A Hong Kong company must keep accounting records, which may be kept at the registered office address or elsewhere at the discretion of the directors. Every company must appoint an auditor who must be a member of the HKIPA and hold a practicing certificate. Although there is no requirement to file accounts with the Companies Registry, there is a requirement to file accounts with the tax authorities. An annual return is required to be filed to the Companies Registry within 42 days after the date of anniversary of incorporation, and then each year thereafter. The government filing fee is HK$105.
Our Services and Requirements
OUR SERVICES INCLUDE:
- Name check and approval
- Filling of the incorporation documents with the Companies Registry
- A standard set of original corporate documents
- Payment of the government fee
- Provision of registered agent and address for one year
- Provision of company secretary for one year
- Designated representative
- Rubber stamp
Please note: If applying for a corporate bank account you will need to order a full set of apostilled company documents when the account is opened outside of Hong Kong.
Please provide the following documents for all directors, shareholders, beneficial owners, and authorised signatories:
- Notarized copy of valid passport.
- Original or Certified copy of utility bill / bank statement (as verification of residential address, dated within three months).
- Original or certified copy of Banker’s reference letter (dated within three months).
- In cases where shareholders and/or directors are corporate bodies, full apostilled set of corporate documents and certificate of good standing (for companies registered more than one year).
IMPORTANT NOTE: LICENSABLE BUSINESS ACTIVITIES
If you conduct any activity without the required license or authorisation granted by a relevant authority in any jurisdiction, Starting Business will not be able to assist you with the company formation or bank account opening related to such unlicensed activity.
Licensable activities include, but are not limited to: provision of financial services involving trading/brokerage in foreign exchange, financial and commodity-based derivative instruments and other securities; offering investment advice to public; insurance and banking; operation and administration of collective investment schemes and mutual funds; payment processing services; money exchange, money transmission or money brokering; asset management; safe custody services; gaming, gambling and lotteries.
Please contact us if you need assistance in the licensing of your financial, Forex brokerage or gambling company.
Shipping of corporate documents or banking kits to your destination requires an extra charge and will be automatically added to your order during checkout. Shipping costs for international courier services are set automatically depending on geographic zones.