Hong Kong is an economic paradise where all entrepreneurial dreams can come true. Due to its ideal location and pro-business administration, Hong Kong is one of the fastest-growing economies around the world. The Chinese special administrative region has a free market economy and is ranked third worldwide in the World Bank’s ease of doing business index.
Every year, Hong Kong attracts a large number of investors and entrepreneurs from all over the world. While Hong Kong holds less pitfalls than other economic hubs in the world, setting up a business there can be challenging if you are not well-acquainted with the company registration process.
The process of business incorporation in Hong Kong is extremely simple, fast, and convenient. All you have to do is pick a name, provide the required documents to the Business & Trade department, and collect the registration certificate once your application is processed. Registration of foreign-owned companies comes with a few additional requirements. Nonetheless, incorporation is mandatory for companies owned by both locals and foreigners. Here’s what you need to know before you begin:
There are several documents that need to be prepared and submitted to the registry in order to incorporate your business. The two main documents that are required for incorporation include Articles of Association and company registration form. The former specifies your company’s operation regulations and the latter outlines basic information regarding your company.
Company registration form must include name of your company, company’s registered address, description of its activities, and details about directors and shareholders. If you are a non-resident, you will be required to provide copies of passports of all shareholders and proof of residence in their respective countries. While you can submit the document in a different language other than English, you will be required to submit translated copies in English. You can hire a company formation agent to handle the entire process for you.
All companies incorporated in Hong Kong must meet their tax obligation. Hong Kong has a two-tiered profit tax regime designed to make taxation simple and boost economic growth. Under this tax regime, the profits tax rate for the first $2 million is decreased to 8.5% for assessable revenue. The tax rate for assessable revenu above $2 million stays at 16.5%. As Hong Kong uses territory-based taxation, you will only have to pay corporate tax on sales done in the region.
You are not required to outline the entire corporate structure of your company in the registration documents. However, you must provide details about all shareholders, directors, and company secretaries. In Hong Kong, all companies are registered under the Companies Ordinance of Hong Kong which requires all private limited liability companies to have at least one shareholder to a maximum of 50. Both residents and non-residents can become shareholders.
Similarly, all companies are required to have at least one director. There is no maximum limit to the number of directors in the company. There are no residency or nationality requirements regarding the directors. All companies must also have a company secretary that is a resident of Hong Kong. Even if you are registering a company from overseas, you will need a resident as a company secretary. The company secretary has the responsibility to ensure the compliance of the company with Hong Kong laws.