This is a thought leadership article by Asia Pacific firm Sino Corporate on the requirements to set up a business in Hong Kong.
After Hong Kong returned her sovereignty to China in 1997, Hong Kong has signed over 40 double tax treaties with partnered countries. Treaties that HongKong has entered into generally offer the lowest withholding tax rates compared to other treaties with the respective countries. Therefore, a Hong Kong company is a preferred holding company for investment into Mainland China and other countries in Asia Pacific. Over 60% of the inbound and outbound investments of Mainland China are via Hong Kong.
Hong Kong is also the world’s freest economy in the Index of Economic Freedom for more than two consecutive decades. Hong Kong tax system is source-based territorial taxation. Only profits arising in or derived from Hong Kong are liable to Hong Kong profits tax (onshore profits). Profits arising in or derived outside Hong Kong are exempt from Hong Kong profits tax (offshore profits). Hong Kong companies are very often used by overseasinvestors for servicing and trading purposes.
Below are the requirements of setting up a private limited company for business purpose in Hong Kong:
To conduct business in Hong Kong one can operate as,a sole proprietor, a partnership,a company or a branch of an overseascompany. The most common form of business entity is a private limited company which can be incorporated in one working day.
2. Capital and Shareholders
A private limited company can be incorporated with as low as one shareof $1 in any currency. Every Hong Kong company must have at least one shareholder, who does not need to be a Hong Kong resident and can be either an individual or a corporation.
Every Hong Kong company must have at least one individual director who does not need to be a Hong Kong resident. Any additional director can be either an individual or a corporation.
4. Registered Office
A Hong Kong company must have a registered office in Hong Kong. No physical office is required.
5. Business Registration
Every company must register with the Business Registration Office and pay business registration fee on the anniversary date ofitsincorporation.
6. Company Secretary
A Hong Kong company must have a company secretary who is either an individual who ordinarily resides in Hong Kong or a body corporate with its registered office or place of business in Hong Kong.
7. Significant Controllers Register
Every company must maintain a SignificantControllers Register showing details of persons or entities who have a significant control over the company. The Company also needs to have at least one designated representative to provide assistance to law enforcement agencies in respect of the Register. The representative must be either a shareholder, a director or an employee resident in Hong Kong or a professional service provider.2 | P a g e
8. Statutory Records
The company must keep its statutory books (such as the registers of members and directors) together with the minute book at its registered office or a place in Hong Kong.
9. Annual General Meeting
A company must hold an annual general meeting unless it is dispensed with by consent of all members.
10. Annual Return
A company must file anAnnual Return with the Companies Registry of its company structure as at the anniversary date of its incorporation.
11. Accounting, Auditing and Tax Compliance
A Hong Kong company is required to prepare annual accounts which must be audited by a CPA. It is also required to attend to various tax filing matters including the profits tax return and employers return.
Sino Corporate Services Limited
Sino Group is a high-quality provider of fund, trust and corporate services located in Hong Kong, China and Singapore. Our expertise and focus is the Greater China market but our strong relationships in the other major financial centres of Asia enable us to provide a seamless service to clients operating throughout the region. Our team has over 30 years’ experience and has been advising clients on China business since the early 90’s. We are dedicated to meeting our client’s needs whilst maintaining the highest standard of corporate governance. All of our staff are professional and highly-trained to ensure that Sino always acts with integrity and in the best interests of our clients.Learn more